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Directors Report of Nandan Denim Ltd.

Mar 31, 2023

The Directors have pleasure in submitting their 29th Annual Report of Nandan Denim Limited (‘the Company'') together with the Audited Financial Statements for the Financial Year (‘FY'') ended March 31, 2023.

OPERATIONAL & FINANCIAL HIGHLIGHTS

The Management Discussion & Analysis Report for financial year 2022-23 is part of the Annual Report and explains the operating and financial performance of the business for the year.

Summary of the financial results of the Company for the year under review is as under:

(Rs. in Crore)

Particulars

Year ended 31/03/2023

Year ended 31/03/2022

Revenue from Operations

2026.76

2175.57

Earnings Before Interest, Taxes, Depreciation and Amortisation

95.98

178.71

Less: Finance Cost

53.38

42.06

Less: Depreciation and Amortisation Cost

3719

44.51

Profit Before Tax

5.42

92.14

Less: Tax Expense

4.61

24.45

Profit After Tax

0.80

67.69

Other Comprehensive Income

0.69

0.15

Total Comprehensive Income

1.49

67.84

Earnings Per Share

0.06

4.70

Tax on Dividend

-

-

COMPANY’S PERFORMANCE REVIEW

Your Company has registered degrowth in Revenue and Profitability due to weak demand of cotton yarn and fabrics in domestic as well as export markets due to worldwide recession and after effect of Ukraine war, fluctuating raw materials prices, reduction in selling rate more than the reduction in yarn and cotton prices etc. During the year under review, the Total Income of your Company was Rs. '' 2026.76 Crores as compared to '' 2175.57 Crores in the previous year. The net profit for the year stood at '' 5.42 crores against '' 92.14 Crores in the previous year.

Cost of Goods sold as a percentage to revenue from operations increased to 81.79% as against 78.05% in the previous year.

Employee cost as a percentage to revenue from operations decreased to 3.66 % ('' 74.11 cr.) against 3.70 % ('' 80.57 cr.) in the previous year.

Other expense as a percentage to revenue from operations decreased to 10.39% ('' 210.56 cr.) against 10.89% ('' 236.91 cr.) in the previous year.

The Profit Before Tax (PBT) for the current year is '' 5.42 cr. against '' 92.14 cr. in the previous year. The Profit After

Tax (PAT) decreased to '' 0.80 cr. against '' 67.69 cr. in previous year.

The finance cost (interest) for the current year is '' 53.38 cr. as compared to '' 42.06 cr. in the previous year, there being no significant change.

DIVIDEND

Dividend Distribution Policy

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“Listing Regulations”), the Board has approved and adopted a Dividend Distribution Policy. The policy details various considerations based on which the Board may recommend or declare Dividend, your Company''s dividend track record, usage of retained earnings for corporate actions, etc. The policy can be accessed on the Company''s website at https:// nandandenim.com/wp-content/uploads/2018/03/Dividend-Distribution-Policy.pdf

Declaration and Payment of Dividend

In ordinary circumstances, the Board of Directors considers recommending dividend on interim / annual basis. Board

usually considers the Company''s profitability, cash needs for working capital, capital expenditure and other relevant factors while recommending dividend for any financial year. However, in the event where the Company''s profits are inadequate or the Company suffers losses, the Board may consider recommending a lower dividend rate or may not recommend dividend. Keeping in view the profit earned during the year, future outlook, investment plans, long term interest and working capital needs; the Company has not recommended any dividend for the year 2022-23. The decision has been taken mainly to provide financial flexibility for the future in the current circumstances.

TRANSFER TO RESERVES:

The Board of Directors has decided to retain the entire amount of profit for FY 2022-23 in the distributable retained earnings.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 124 and Section 125 of the Companies Act, 2013, unclaimed or unpaid Dividend (declared on Meetings dated 29.09.2015 and 12.02.2016) relating to the financial year 2015-16 has been transferred to Investor Education and Protection Fund (IEPF), Shareholders are required to lodge their claims with the Company''s RTA for unclaimed dividend. Pursuant to the provisions of Investor Education and Protection Fund, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company on the website of the Company https:// nandandenim.com/dividend, as also on the website of the Ministry of Corporate Affairs (www.mca.gov.in).

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

Nandan Denim Limited did not have any Subsidiary, Joint Venture or Associate Company for the year ended March 31, 2023.

FINANCIAL STATEMENTS

In line with the General Circulars No. 20/2020 dated May 5, 2020 and General Circular No. 02/2022 dated May 5, 2022 issued by the MCA and the SEBI Circulars, Notice of the AGM along with the Integrated Annual Report FY 2022-23 is being sent only through electronic mode to those Members whose e-mail addresses are registered with the Company/ Depositories/Registrar & Transfer Agent (‘RTA''), unless any Member has requested for a physical copy of the same. The Notice of AGM and Annual Report FY 2022-23 are available on the Company''s website at www.nandandenim. com and may also be accessed from the relevant section of the websites of the Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited at www.bseindia. com and www.nseindia.com respectively. The AGM Notice is also available on the website of Central Depository Services Limited at www.evotingindia.com.

COMPLIANCE WITH SECRETARIAL STANDARD

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

CREDIT RATING

The external credit rating from ICRA reaffirmed at ICRA triple B minus with a Negative outlook (ICRA BBB-) and ICRA A three (ICRA A3).

The outlook is negative towards weak quarterly financial performance during the year. However, there has been no impact on the company''s operations and over the availability of bank funding. With the sector recovering from the impact of the pandemic and demand for denim products improving, ICRA expects the improved performance to sustain over the medium term, with the revised rating more closely reflecting an updated view on the company''s credit profile.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on March 31,2023 was '' 144.14 crores divided into 14,41,47,168 Equity Shares of '' 10 each fully paid.

As on March 31, 2023, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

The Company''s equity shares are listed on the BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The shares are actively traded on BSE and NSE and have never been suspended from trading.

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

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

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Act, comprising of three Directors including Independent Director. The composition and report on CSR is set out in ‘Annexure B'' to this report.

Total spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%): The average net profit for the last three financial years was '' 34,83,691 calculated in accordance with the provisions of Section 198 of the Companies Act, 2013. During the financial year 2022-23, the Company has spent '' 35,00,000/- (Rupees Thirty Five Lakhs Only) in defined Activities mentioned in Schedule VII and CSR policy of the Company.

BUSINESS RESPONSIBILITY ANDSUSTAINABILITY REPORT (BRSR)

Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report (‘BRSR'') on initiatives taken from an environmental, social and governance perspective, in the prescribed format is available as a separate section of the Annual Report and is also available on the Company''s website URL: www.nandandenim.com

CASH FLOW AND CONSOLIDATED FINANCIAL STATEMENTS

As required under Regulation 34 of the Listing Regulations, a Cash Flow Statement is part of the Annual Report. The Company does not have any subsidiaries and hence not required to publish Consolidated Financial Statements.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors retiring by rotation

Mr. Shaktidan Gadhavi (DIN: 09004587), Whole-time Director of the Company, aged 52 years, retires by rotation as a Director at the conclusion of this Annual General Meeting 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 himself for re-appointment. Appropriate resolution for his re-appointment is being placed for your approval at the ensuing AGM.

In accordance with the provisions of the Act read with the Rules issued thereunder, the Listing Regulations and the Articles of Association of the Company, Additional Directors and Independent Directors are not liable to retire by rotation.

Change in Directorate/ KMPs

i. Resignation of Ms. Falguni Vasavada (DIN: 08921942) Ms. Falguni Vasavada has been associated with Nandan Denim as Independent Director since November 2020. She has tendered her resignation from the post of Independent Director w.e.f. May 29, 2023.

ii. Resignation of Mr. Vedprakash Chiripal (DIN: 00290454) Mr. Vedprakash Chiripal has been associated with Nandan Denim Limited as Chairman since September 2003. He has tendered his resignation from the post of Chairman and Director of the Company w.e.f. October 8, 2022.

iii. Resignation of Mr. Tara Sankar Bhattacharya (DIN: 00157305)

Mr. Tara Sankar Bhattacharya has been associated with Nandan Denim as Independent Director since February 2013. He has tendered his resignation to management due to his advanced age. He resigned w.e.f. August 13, 2022.

iv. Appointment and Resignation of Mr. Mehul Shah (PAN: ALXPS5280L)

The Board of Directors at their meeting held on March 26, 2022, based on recommendation of the Audit Committee and Nomination & Remuneration Committee approved the appointment of Mr. Mehul Shah as a CFO. Mr. Mehul Shah was a Chartered Accountant and also holds degree in law from Gujarat University. He has served in capacity of CFO in Gujarat Ambuja Exports Limited and Arvind Smart spaces Limited. He has an excellent track record of working with top Companies of Ahmedabad as Ashima Limited, Reliance Logistics Private Limited, Adani Enterprises Limited, Nirma Limited amongst others. His role in previous organisations included spearheading the entire Finance & Accounts Team, Fund Management-Debt & Equity, Performance Analysis, Internal Audits, Compliance Management, managing portfolios relating to Insurance, Treasury & Forex. He has resigned for better prospects, from his position of Chief Financial Officer (CFO) of the Company from the close of business hours on May 19, 2022.

v. Appointment and Resignation of Mr. Mahesh Jain (PAN: AEDPJ6340M)

The Board of Directors at their meeting held on August 13, 2022, based on recommendations of the Audit Committee and Nomination & Remuneration Committee approved the appointment of Mr. Mahesh Jain as CFO of the Company. Mr. Mahesh Jain is qualified CA, CWA with over 25 years of experience in enhancing corporate financing, financial controls process & reviewing complex financial data and compliances governance and risk management for facilitating strategic financials growth for different companies.

He has resigned for personal growth, from his position of Chief Financial Officer (CFO) of the Company w.e.f. February 9, 2023.

vi. Appointment and Resignation of Mr. Ashok Jain (PAN: AFKPJ7012C)

The Board of Directors at their meeting held on February 09, 2023, based on recommendation of the Audit Committee and Nomination & Remuneration Committee approved the appointment of Mr. Ashok Kumar Jain as a CFO w.e.f. February 10, 2023. Mr. Ashok Kumar Jain, prior to joining us had almost 30 years relevant experience in various Companies and worked with organization(s) like M/s. Poddar Tyres Ltd, M/s. Rajasthan Petro Synthetics, M/s J.K. Udaipur Udyog Ltd., M/s International Tractor Ltd., M/s Jindal Saw Ltd., EHES Ltd., etc.

He has resigned for better prospects, from his position of Chief Financial Officer (CFO) of the Company from the close of business hours on May 29, 2023.

vii. Appointment of Ms. Nalini Nageswaran as an Independent Director of the Company (DIN: 10128138) w.e.f. May 30, 2023.

The Board of Directors at their meeting held on May 29, 2023, based on recommendations of the Nomination & Remuneration Committee approved the appointment of Ms. Nalini Nageswaran as an Additional Independent Director w.e.f. May 30, 2023.

Ms. Nalini Nageswaran has 15 years'' experience in Corporate Credit from Jan 2002 to July 2020, 10 years'' experience in handling RBI Audit U/s 35; RBI Onsite inspection under SPARC; direct interactions with the RBI SSM and their team). 5 years'' experience in Risk Management. Member of RBI Working Group on Expected Credit Losses under Basel.

Member of the Tranche Data Validation Committees for Credit and Operational Risk. Deloitte was the Consultant for this project. Also headed the CCG (Commercial Clients Group) team for whole Bank Data Automation Project. Member of SBI''s Working Group constituted for addressing issues relating to Risk Weighted Assets and Capital Conservation. All these committees addressed the requirements of RBI''s Risk Based Supervision of Banks. Developed Corporate Loan products and credit scoring models for niche borrowers. (Scoring model for Mudra Loan was also developed by her) Member of committee for designing and development of Corporate YONO Business. (Digital banking for off Balance sheet products) Conducted annual Risk Control Self- Assessment Workshops across all 47 branches in the CCG vertical between 2018 and 2020. All these branches handle high value credit. Conducted workshops at RSETI (Bhavnagar), NIBM (Pune) and SBI in-house training centres, covering various Banking & Finance topics Diverse experience includes assignments in 11 branches and 5 administrative offices during the course of service in SBI. Credit related experience includes Green field project finance, structuring of special loan products, resolution under CDR, restructuring consequent to the economic slowdowns in FY 2008-09 and FY 2013-14, resolution of Stressed Assets including sale to ARC.

viii. Appointment of Mr. Suresh Chand Maheshwari (PAN: AHAPM9992L)

The Board of Directors at their meeting held on May 29, 2023, based on recommendation of the Audit Committee and Nomination & Remuneration Committee approved the Appointment of Mr. Suresh Chand Maheshwari as a CFO. Mr. Suresh Chand Maheshwari is a Chartered Accountant and had almost 40 years relevant experience in different sectors and worked with organization(s), like Modern Terry Towel, Nandan Denim Limited, Maral Overseas, Welspun etc. He has appointed w.e.f. May 30, 2023.

ix. Appointment and Resignation of Mr. Akshit Soni (PAN: CWPPS7787B) as Company Secretary & Compliance Officer of the Company.

The Board of Directors at their meeting held on August 13, 2022, based on recommendations of the Nomination & Remuneration Committee approved the appointment of Mr. Akshit Soni as Company Secretary & Compliance Officer of the Company w.e.f. August 13, 2022. Mr. Akshit Soni is qualified Company Secretary and having 10 years of work experience in compliance of Secretarial Practice including Company Law & Securities Law, ROC Compliances, Stock Exchange compliances, Compliance of SEBI Rules and Regulations, FEMA Regulation etc. for Listed, Unlisted, Private Companies and LLPs.

He has resigned for exploring opportunities and better professional growth, from his position of Company Secretary & Compliance Officer of the Company w.e.f. September 30, 2022.

x. Appointment of Ms. Renuka Upadhyay (PAN: AAZPU7698H) as Company Secretary & Compliance Officer of the Company.

The Board of Directors at their meeting held on February 9, 2023, based on recommendations of the Nomination & Remuneration Committee approved the appointment of Ms. Renuka Upadhyay as Company Secretary & Compliance Officer of the Company w.e.f. February 10, 2023.

An astute professional & Member of Institute of Company Secretaries of India with 16 years of post-qualification experience seeking assignment in secretarial department in corporate industries, business development and implementation of effective business strategies to achieve revenue & profitability.

She has worked in Reliance Industries Limited an Indian multinational conglomerate, one of the most profitable companies in India as well as largest publicly traded company in India by market capitalization as Team Manager FC&A- CS & Compliance in Hydrocarbon division. She previously worked at Asian Granito India Ltd (Company Secretary & (DGM) Legal- Tiles Manufacturing Co) in Ahmedabad.

She was Independent Director on the Board of Deep Industries Limited and Chiripal Polyfilms Limited.

Declarations from Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that:

(i) they meet the criteria of independence as prescribed under the Act;

(ii) they have registered their names in the Independent Directors'' Databank; and

(iii) they have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

Ms. Falguni Vasavada, Independent Director of the Company has yet to clear their proficiency test as per MCA guidelines.

Familiarization Programmes

The Company has adopted a familiarization policy for independent directors. The policy as well as the details with regard to no. of hours and details of imparting the training to the independent directors of the Company are available on the Company''s website https:// nandandenim.com/wp-content/uploads/2023/03/ Familirization-Policy-Familiarization-Programme-for-Directors.pdf.

Nomination and Remuneration Policy

The Company has formulated and adopted the Nomination and Remuneration Policy in accordance with the provisions of Companies Act, 2013 read with Rules issued thereunder and the Listing Regulations.

The salient features of the Policy are set out in the Corporate Governance Report which forms part of this Annual Report. The Policy is also available on the website of the Company at https://nandandenim.com/ wp-content/uploads/2018/07/Remuneration_Policy_ REMUNERATION-CRITERIA-FOR-NON-EXECUTIVE-DIRECTORS.pdf

Policy on Director’s Appointment and

Remuneration

The Nomination and Remuneration Committee (NRC) has approved the following criteria and process for identification / appointment of Directors:

Criteria for Appointment:

i. Proposed Director (“Person”) shall meet all statutory requirements and should:

• possess the highest ethics, integrity and values.

• not have direct / indirect conflict with present or potential business / operations of the Company.

• have the balance and maturity of judgment.

• be willing to devote sufficient time and energy.

• have demonstrated leadership and vision at senior levels, and have the ability to articulate a clear direction for the Company.

• have relevant experience with respect to Company''s business (in exceptional

circumstances, specialisation / expertise in unrelated areas may also be considered).

• have appropriate comprehension to understand or be able to acquire that understanding relating to corporate functioning, concerning the scale, complexity of business and specific market and environment factors affecting the functioning of the Company.

ii. The appointment shall be in compliance with the Board Diversity Policy of the Company

Process for Identification / Appointment of Directors:

i. Board members may (formally or informally) suggest any potential person to the Chairperson of the Company meeting the above criteria. If the Chairperson deems fit, necessary recommendation shall be made by him to the NRC.

ii. Chairpersons of the Company can himself also refer any potential person meeting the above criteria to the NRC.

iii. NRC will process the matter and recommend such proposal to the Board.

iv. Board will consider such proposal on merit and decide suitably.

Board Evaluation

The annual evaluation process of the Board of Directors, individual Directors and Committees was conducted in accordance with the provision of the Act and the SEBI Listing Regulations.

The Board evaluated its performance after seeking inputs from all the Directors on the basis of criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning etc. The performance of the Committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

The Chairman of the Board had one-on-one meetings with the Independent directors and the Chairman of NRC had one-on-one meetings with the Executive and Non-Executive, Non-Independent Directors. These meetings were intended to obtain Directors'' inputs on effectiveness of the Board/Committee processes.

The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and Committee Meetings like preparedness on the

issues to be discussed, meaningful and constructive contribution and inputs in meetings etc.

In a separate meeting of Independent Directors, performance of Non-Independent Directors and the Board as a whole was evaluated. Additionally, they also evaluated the Chairman of the Board, taking into account the views of Executive and Non-Executive Directors in the aforesaid Meeting. The Board also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The above evaluations were then discussed in the Board Meeting and performance evaluation of Independent directors was done by the entire Board, excluding the Independent Director being evaluated.

Key Managerial Personnel

As per 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, the following officials were the ‘Key Managerial Personnel'' for the financial year 2022-23:

• Mr. Jyotiprasad Chiripal - Managing Director

• Mr. Deepak Chiripal - Chief Executive Officer

• Mr. Shaktidan Gadhavi - Whole Time Director

• Mr. Mehul Shah - Chief Financial Officer

(Appointed w.e.f. March 26, 2022 & resigned w.e.f. May 19, 2022)

• Mr. Mahesh Jain - Chief Financial Officer (Appointed w.e.f. August 13, 2022 & resigned w.e.f. February 9, 2023)

• Mr. Ashok Jain - Chief Financial Officer

(Appointed w.e.f. February 10, 2023 & resigned w.e.f. May 29, 2023)

• Ms. Purvee Roy - Company Secretary &

Compliance Officer (Resigned w.e.f. June 15, 2022)

• Mr. Akshit Soni - Company Secretary &

Compliance Officer (Appointed w.e.f. August 13, 2022 & resigned w.e.f. September 30, 2022)

• Ms. Renuka Upadhyay - Company Secretary & Compliance Officer (Appointed w.e.f. February 10, 2023)

• Mr. Suresh Chand Maheshwari - Chief Financial Officer (Appointed w.e.f. May 30, 2023) in financial year 2023-24.

Remuneration of Directors, Key Managerial Personnel and particulars of employees

The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with section 178

of the Act and regulation 19 of the SEBI Listing Regulations [including any statutory modification(s) or re-enactment(s) thereof for the time being in force.]

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are set out in ‘Annexure C'' to this report.

In terms of Section 136 of the Companies Act 2013, the Report and Accounts are being sent to the Members and other entitled thereto, excluding the aforesaid Annexure 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. In any member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

Performance Evaluation by Nomination and Remuneration Committee:

The Nomination and Remuneration Policy of the Company empowers the Nomination and Remuneration Committee to formulate a process for evaluating the performance of Individual Directors, Committees of the Board and the Board as a whole.

The parameters for the performance evaluation of the Board, inter alia, include performance of the Board on deciding long term strategy, rating the composition and mix of Board members, discharging of governance and fiduciary duties, handling critical and dissenting suggestions etc.

The parameters for the performance evaluation of the Directors include attendance, effective participation in meetings of the Board, domain knowledge, vision, strategy, etc.

The Chairperson(s) of the respective Committees based on feedback received from the Committee members on the outcome of performance evaluation exercise of the Committee, shares a report to the Board.

The details of the evaluation process are set out in the Corporate Governance Report which forms a part of this Annual 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.

We take the entire issue of water management with utmost seriousness and realize that we owe a lot to the environment. And that is why we reuse and recycle water by employing Effluent Treatment Plant (ETP) and Reverse Osmosis (RO) Plant. We also ensure we treat wastewater with responsibility through Sewage Treatment Plant (STP) and reuse the same for gardening purpose and rest of treated effluent as per the prescribed parameters goes to Common Effluent treatment plant.

As a part of our waste management compliance, we recycle our denim to minimize our wastages. Also, we are setting up garneting function to convert used garments into fibers and then recycle the same to denim. We are happy to inform that we have also set up our own Caustic Recovery Plant (CRP) to reuse and process caustic. At the same time, we keep upgrading our waste management policies closely examining our entire denim manufacturing process to further minimize any wastes that we may be generating.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

Human Resources

Framing the human resource/employee relationship helps maintain perspective on the Company''s ultimate goal: to help employees do their best at their jobs. It is a function within an organisation concentrated on recruiting, managing and directing people who work in it. Human Resource Management deals with issues related to compensation, performance management, organisation development, safety, wellness, benefits, employee motivation, training and others.

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 programmes have been organized for employees at various levels through both internal and external faculties during the year under review, thereby strengthening employee engagement and learning. This has helped to ensure that learning is not time bound and location bound, at the same time employees have access to the information.

A team of around 1182 passionate & motivated individuals drive Nandan Denim Limited. Your Company has taken various initiatives to engage the employees using digital and technology platforms.

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.

DISCLOSURE REQUIREMENTS

• Details of the familiarization programme of the Independent Directors are available on the website of the Company;

• 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;

• The Company does not have any scheme or provision of money for the purchase of its own shares by employees/Directors or by trustees for the benefit of employees/Directors;

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

INSIDER TRADING POLICY

As required under the Insider Trading Policy Regulations of SEBI and amendments thereto, your Directors have framed Insider Trading Regulations and Code of Internal Procedures and Conducts for Regulating, Monitoring and Reporting of Trading by Insider as well as Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information. The same is also posted on the website of the Company at https://nandandenim.com/ wp-content/uploads/2023/03/Code-of-Conduct-for-Prevention-of-Insider-Trading.pdf

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 tentative dates of Board and Committee Meetings is decided and informed well in advance to facilitate the Directors to arrange their schedule and to ensure participation in the meetings.

During the financial year 2022-23, four board meetings were held on May 28, 2022, August 13, 2022, November 14, 2022 and February 09, 2023 respectively. The gap between two Board Meetings did not exceed 120 days and a meeting was held in every quarter.

The details of the meetings of the Board of Directors and its Committees, convened during the financial year 202223 are given in the Corporate Governance Report which forms a part of this Report. Further, the Board of Directors also confirms compliance and adherence of the Secretarial Standard - 1 as issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs, with regards to Board Meeting.

BOARD COMMITTEES

Your Company has nine Committees of the Board as per the statutory requirement, namely:

• Audit Committee

• Stakeholders Relationship Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Risk Management Committee

• Management Committee

• Finance & Investment Committee

• Bonus Committee

• Executive 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.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the Directors of the Company confirm that:

a. in the preparation of the annual accounts for the financial year ended March 31, 2023, the applicable Accounting Standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

b. t he Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the Profit and Loss of the Company for the financial year ended March 31, 2023;

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

d. t he annual accounts have been prepared on a ‘going concern'' basis;

e. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively; and

f. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis as stipulated as per Regulation 34(2)(e) of SEBI (Listing Obligations and

Disclosures Requirement) Regulations, 2015 is presented in a separate section forming part of this Annual Report. It speaks about the overall industry structure, global and domestic economic scenarios, developments in business operations / performance of the Company''s business and other material developments during the financial year 2022-23.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of loans, guarantees given and investments under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of the Board and its Powers) Rules, 2014, as on March 31, 2023, are set out in Note 5 and 6 to the Financial Statements of the Company.

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 corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, 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 accountability 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). Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a separate section titled ‘Report on Corporate Governance'' has been included as part of this Report which also contains certain disclosures required under the Companies Act, 2013. The Certificate from the Secretarial Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is also published in this Annual Report.

AUDIT COMMITTEE

The Company has in place an Audit Committee in terms of requirements of the Act read with rules framed thereunder and Listing Regulations. The details relating to the Audit Committee are given in the Corporate Governance Report forming part of this report. The recommendations of Audit Committee were duly accepted by the Board of Directors.

AUDITORS

Statutory Auditor

M/s. J.T. Shah & Co., Chartered Accountants (Firm Registration No. 109616W), were appointed as the Statutory

Auditors of the Company for a tenure of 5 years commencing from the conclusion of the 28th AGM of the Company until the conclusion of the 33rd AGM of the Company to be held in the year 2027.

The Auditors'' Report for the financial year ended March 31, 2023 does not contain any qualification, reservation or adverse remark.

Explanation to the observations of Auditor’s Report:

Export packing credit was taken for 180 days and extension was requested by the Company for further 90 days. Hence there was delay of 21 days.

Cost Auditor

In terms of Section 148 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 (as amended), it is stated that the cost accounts and records are made and maintained by the Company as specified by Central Government.

The Board of Directors of the Company, on the recommendations made by the Audit Committee at its meeting held on May 29, 2023 have approved the appointment of M/s. A.G. Tulsian & Co., Cost Accountants, Ahmedabad [Firm Registration No. 100629] as the Cost Auditor of your Company for the financial year 2023-24 to conduct the audit of the cost records of your Company. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee. The requisite resolution for ratification of remuneration of Cost Auditors by members of the Company has been set out in the Notice of ensuing Annual General Meeting. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment within the meaning of the said Act.

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 2023-24 along with a certificate confirming their independence and arm''s length relationship.

Secretarial Auditor

M/s Jay Khatnani & Associates, Company Secretaries, Ahmedabad (Firm Registration Number: S2018GJ620700) was appointed as Secretarial Auditor of the Company for the financial year 2022-23 pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is set out in ‘Annexure-D’ to this report

Explanation to the observations of Secretarial Audit Report:

As prescribed under section 204(1) of the Act, the Company has received the Secretarial Audit Report. The observations made therein and the corresponding explanations are given below:

One of the Independent Director Mrs. Falguni A. Vasavada has yet to appear for Online Proficiency Exam on Independent Directors Data Bank portal. Also, Company has made compliances on Belated Basis for which the Company has received Penalty Letters under SOP Guidelines which is being paid by the Company Under SEBI (Listing Obligations and Disclosure Requirements), 2015.

Mrs. Falguni A. Vasavada was not able to appear for Online Proficiency Exam on Independent Directors Data Bank portal, due her preoccupation and the Board has appointed Ms. Nalini Nageswaran as an Additional Woman Director w.e.f. May 30, 2023 in its meeting held on May 29, 2023.

The delayed filling was on account of absence/ frequent changes of Company Secretary and Compliance Officer in the Company.

M/s Jay Khatnani & Associates, Company Secretaries have been appointed to conduct the Secretarial Audit of the Company for the financial year 2023-24. They have confirmed that they are eligible for the said appointment.

Auditors’ certificate on corporate governance

As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors'' Certificate on corporate governance is enclosed as part of Board''s report. The Auditors'' Certificate for FY 2022-23 does not contain any qualification, reservation or adverse remark except following observation:

One of the Independent Director Mrs. Falguni A. Vasavada has yet to appear for Online Proficiency Exam on Independent Directors Data Bank. Also, various compliance submission was done on belated basis under SEBI (LODR) 2015 on the Quarterly and Half Yearly basis.

Details in respect of frauds reported by Auditors other than those which are reportable to the Central Government

The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12)of the Companies Act, 2013, including rules made thereunder.

DISCLOSURE UNDER SCHEDULE V(F) OF THE SEBI (LODR) REGULATIONS, 2015

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

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/ arrangements/ transactions entered by the Company during the F.Y. 2022-23 with related parties were on an arm''s length basis and in the ordinary course of business and approved by the Audit Committee. Certain transactions, which were repetitive in nature, were approved through omnibus route.

As per the SEBI Listing Regulations, if any Related Party Transactions (‘RPT'') exceeds 1,000 crores or 10% of the annual consolidated turnover as per the last audited financial statement whichever is lower, would be considered as material and would require Members approval. In this regard, during the year under review, the Company has taken necessary Members approval. Since the aggregate value of these transactions (proposed in FY 2023-24 and FY 2024-25) are likely to exceed ten percent of the annual consolidated turnover of the Company as per the last audited financial statements of the Company and will thus require approval of the members of the Company through an Ordinary Resolution.

The details of the related party transactions as per Indian Accounting Standard 24 are set out in Note 38 to the Financial Statements forming part of this 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.

During the FY 2022-23, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company other than sitting fees, commission and reimbursement of expenses, as applicable.

Pursuant to the requirements of the Act and the SEBI Listing Regulations the Company has formulated a policy on RPTs and is available on Company''s website https:// nandandenim.com/wp-content/uploads/2023/06/Related-Party-Transaction-Policy-1.pdf

POLICIES OF THE COMPANY

The Company is committed to good corporate governance and has consistently maintained its organizational culture as a remarkable confluence of high standards of professionalism and building shareholder equity with principles of fairness, integrity and ethics. The Board of Directors of the Company have from time to time framed and approved various Policies as required by the Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations. These Policies and Codes are reviewed by the Board and are updated, as and when required.

Some of the key policies as per the Companies Act 2013 and Listing Regulations requirements, adopted by the Company are as follows:

Sr.

Name of Policies

No.

1

Related Party Transaction Policy

2

Risk Management Policy

3

Whistle Blower Policy

4

Policy of the Company under the Sexual Harassment at Workplace

5

Code of Conduct for Prevention of Insider Trading

Sr.

Name of Policies

No.

6

Code Of Practices And Procedures For Fair Disclosure Of Unpublished Price Sensitive Information

7

Policy on Material Subsidiary/ies

8

Corporate Social Responsibility Policy

9

Familiarization Policy

10

Policy on Determination of materiality of events/ information

11

Dividend Distribution Policy

12

Archival Policy For Any Material Event / Information Disclosed To The Stock Exchanges

13

Remuneration Policy

14

Code of Conduct and Ethics

ESG Policies adopted by the Company are as follows:

Sr.

Name of Policies

No.

1

Anti-Bribery Policy

2

Business Responsibility Policy

3

Grievance Redressal Policy for Employees

4

Grievance Redressal Policy for Investors

5

Equal Opportunity Policy

6

Waste Management Policy

7

IT Security Policy

8

Human Rights Policy

9

Grievance Redressal Policy for Investors

10

Health and Safety Policy

11

Non Discrimination Policy

12

Sustainable Procurement and Responsible Sourcing Policy

INTERNAL CONTROLS

The Company has robust internal control systems and procedures commensurate with its nature of business which meets the following objectives:

• providing assurance regarding the effectiveness and efficiency of operations;

• efficient use and safeguarding of resources;

• compliance with policies, procedures and applicable laws and regulations; and

• transactions being accurately recorded and promptly reported.

The Company continues to have periodical internal audits conducted of all its functions and activities to ensure that systems and procedures are followed across all areas.

The Audit Committee of the Board of Directors of the Company regularly reviews the adequacy of internal control systems through such audits. The Internal Auditor reports directly to the Audit Committee.

DETAILS OF INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

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 updation 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.

For all amendments to Accounting Standards and the new standards notified, the Company carries out a detailed analysis and presents the impact on accounting policies of the Group, the impact on financial results, including revised disclosures to the Audit Committee. The approach and changes in policies are also validated with the statutory auditors. The Company takes steps to make these amendments as part of the underlying ERP systems to the extent possible.

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

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

RISK MANAGEMENT

Your Company is exposed to risks across all levels and functions of the organisation. The Board has constituted Risk Management committee and approved Risk Management Policy (RMP) to effectively address financial, operational,

business, compliance and strategic risk. The Committee regularly review and analysis of various risks in the Company and take effective steps to mitigate those risks.

Refer to the MDA Section in this Report for risks and threats applicable to your Company.

CODE OF CONDUCT & ETHICS

The Board of Directors has laid down a Code of Conduct applicable to the Board of Directors and all Senior Management Personnel, which is available on Company''s website https://nandandenim.com/wp-content/ uploads/2018/07/Code-of-Conduct-and-Ethics NDL.pdf. All Board members and senior management personnel have affirmed compliance with the Code of Conduct.

INSURANCE

All properties and insurable interests of the Company including buildings, plant & machinery and stocks have been adequately insured.

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

The Company has in place a Policy on Prevention of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“Prevention of Sexual Harassment of Women at Workplace Act”) and Rules framed thereunder and an Internal Complaints Committee (ICC) has also been set up to redress complaints received regarding sexual harassment at three places i.e. Corporate Office, Piplej Plant and Bareja Plant.

The Company believes in zero tolerance towards Sexual Harassment at workplace and maintains itself as a safe and non -discriminatory organization. The ICC members have been trained in handling and resolving complaints.

During the financial year 2022-23, no cases in the nature of sexual harassment were reported at any workplace of Nandan Denim Limited.

EXTRACT OF ANNUAL RETURN

The Annual Return of the Company as on March 31, 2023 in Form MGT - 7 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at www.nandandenim.com.

DEPOSITS

During the year under review, the Company has not accepted any deposits within the meaning of section 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 [including any statutory modification(s) or reenactments) thereof for the time being in force] and Chapter V of the Companies Act, 2013.

DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM

The Company has in place an Audit Committee in terms of requirements of the applicable provisions of the Companies Act, 2013, Rules made there under and Listing (Obligations and Disclosure Requirements) Regulations, 2015. The details of the composition of the Audit Committee, terms of reference and meetings held are provided in the Corporate Governance Report which forms part of this Report.

The Company has a robust vigil mechanism through its Whistle Blower Policy approved and adopted by Board of Directors of the Company in compliance with the provisions of Section 177 (10) of the Act and Regulation 22 of the Listing Regulations.

The Company has developed an in-house system which can be used to, inter alia, report any instances of financial irregularities, breach of code of conduct, abuse of authority, disclosure of financial/ price sensitive information, unethical/ unfair actions concerning company vendors/ suppliers, mala-fide manipulation of Company records, discrimination to the Code of Conduct in an anonymous manner.

The Policy also provides protection to the employees and business associates who report unethical practices and irregularities. Any incidents that are reported are investigated and suitable action is taken in line with the Whistle Blower Policy. The Whistle Blower Policy of the Company can be accessed at website of the Company at https://nandandenim.com/wp-content/uploads/2023/06/ Whistle-Blower-Policy.pdf

MATERIAL CHANGES AND COMMITMENTS

There are no material changes affecting the financial position of the Company subsequent to the close of the FY 2022-23 till the date of this Report.

ANNEXURES

Following statements/reports/certificates are set out as Annexures to the Directors'' Report:

• Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo

• Details of CSR activities and spends under Section 135 of the Companies Act, 2013.

• Secretarial Audit Report pursuant to Section 204 of the Companies Act, 2013.

• Information as per Section 197

• Form AOC - 2

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors'' and ‘General Meetings'', respectively, have been duly followed by the Company.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these matters during the year under review:

• Details relating to deposits covered under Chapter-V of the Act.

• Issue of equity shares with differential rights as to dividend, voting or otherwise.

• Issue of shares (including sweat equity shares and Employee Stock Option Scheme) to employees of the Company under any scheme.

• The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

• As the Company did not have any subsidiary / joint venture during the year, the reporting requirements under Rules 8(1) and 8(5)(iv) of the Companies (Accounts) Rules are not applicable to the Company.

• The Whole Time Director of the Company did not receive any remuneration or commission from its holding company.

• No fraud has been reported by the Auditors to the Audit Committee or the Board.

• Details in terms of Sections 197(12) and 197(14) of the Act read with applicable rules.

• Maintenance of Cost records as specified by the Central Government under sub section (1) of section 148 of the Act.

• There has been no change in nature of the business of the Company.

• There is no application made / proceeding pending under the Insolvency and Bankruptcy Code, 2016.

• There was no instance of one-time settlement with any Bank or Financial Institution.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to all of the Company''s employees for their contribution towards the Company''s performance. The Directors would also like to thank the members, employee unions, customers, dealers, suppliers, bankers, governments and all other business associates for their continuous support to the Company and their confidence in its management.


Mar 31, 2018

Dear Members,

The Directors have pleasure in presenting the Twenty Fourth Annual Report together with the Audited Financial Statements of the Company for the financial year ended 31st March, 2018.

The accounts for the year under review are for a period of 12 months from 1st April 2017 to 31st March 2018.

Financial Performance

Highlights of Financial Results for the year are as under:

(Rs. in cr.)

Particulars

For the year

For the year

ended

ended

31.03.2018

31.03.2017

Revenue from operations

1,588.92

1,220.41

EBITDA

225.84

186.82

Less: Finance Costs

57.98

36.17

Less: Depreciation

120.56

86.35

Profit before exceptional items and tax

61.20

85.46

Exceptional Items

0.00

0.00

Profit Before Tax

61.20

85.46

Less: Tax expense

14.47

12.91

Profit After Tax

46.73

72.55

Earnings Per Share (EPS) (in Rupees)

9.72

15.19

Other Comprehensive Income

(0.30)

0.82

Total Comprehensive Income

46.43

73.37

During the year under review, the Company achieved a new revenue milestone by crossing INR 1,500 cr. The Company registered a growth of 30% over the previous year. The improved revenue figures were mainly due to commissioning of new plant and improved market focus.

Profit Before Tax (PBT) decreased by 28% in the current year over the previous year whereas Profit After Tax (PAT) decreased by 36% over the previous year.

The Company has progressed during the current period ended 31st March, 2018 in terms of revenue. It has achieved aggregate sales of RS.1,588.92 crores And Profit Before Tax of RS.61.20 crores.

Cost of Goods sold as a percentage to revenue from operations increased to 40% as against 55% in the previous year.

Employee cost as a percentage to revenue from operations decreased to 5.05% (RS.80.30 cr.) against 4.84% (RS.59.07 cr.) in the previous year.

Other expense as a percentage to revenue from operations decreased to 12.46% (RS.197.99 cr.) against 12.39% (RS.151.17 cr.) in the previous year.

The Profit Before Tax (PBT) for the current year is RS.61.20 cr. against RS.85.46 cr. in the previous year. The Profit After Tax (PAT) declined to RS.46.73 cr. against RS.72.55 Cr. in previous year 2017-18 was marked by implementation of Goods and Services Tax (GST) w.e.f. 1st July, 2017. This major reform in India’s taxation structure led to a temporary slowdown in the growth momentum as GST jitters gripped the trade leading to significant reduction in the bottom line. However, your Company has managed these challenges well on account of resilience and strength of its customers and suppliers.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2017-18 and the date of this report. Barring unforeseen circumstances, the Directors of your Company expect continued growth in turnover and profitability in future.

FINANCIAL STATEMENTS

In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ‘Listing Regulations’) and Section 136 of the Companies Act, 2013 read with Rule 10 of the Companies (Accounts) Rules, 2014, the Annual Report containing the financial statements for the financial year 2017-18, along with Directors Report, Management Discussion & Analysis and Corporate Governance Report is being sent to all shareholders who have registered their email address(es) for the purpose of receiving documents / communication from the Company in electronic mode. Physical copy of the Annual Report is being sent to all those who have not registered their email ids. Please note that the Company will make available full Annual Report either a hard or soft copy depending upon request by any member of your Company.

Web link of the Annual Report has been sent to all the shareholders whose email ids are registered with the Depository Participant(s).

CREDIT RATING

ICRA has upgraded the rating of Nandan Denim Ltd (NDL) from ICRA A-/A2 ICRA A/A1. The upgrade in the ratings reflects Nandan Denim Limited’s anticipated growth in scale of operations on the back of capacity addition and the higher backward integration within the denim value chain which should allow the Company to better manage its cost structure and improve profitability. Further, the upgrade also factors in the reduced project implementation risks associated with a large capex plan which has been successfully completed by the Company. The ratings continue to factor in NDL’s strong market position as leader in terms of denim capacity in the domestic denim industry, established distribution network and the extensive industry experience of its Promoters. ICRA further notes that the capex undertaken is also eligible for various government incentive schemes which will support profitability going forward.

RESERVES AND SURPLUS

The Company has not transferred any amount to General Reserves for the financial year 2017-18.

DIVIDEND

Your Directors are pleased to recommend a dividend @ 8% i.e. Re. 0.80 (Eighty Paise Only) per equity share of RS.10/- each fully paid up for the year ended 31st March, 2018. This would entail a payout of RS.3.84 cr. including dividend distribution tax based on the number of shares as at 31st March, 2018. The dividend would be paid to all the shareholders, whose names appear on the Register of Members / Beneficial Holders list on the book closure date.

Pursuant to Regulation 43A of the Listing Regulations, 2015, the Company has formulated a ‘Dividend Distribution Policy’ which is in line with the parameters prescribed by SEBI for distribution of dividend. The policy is available on the Company’s website viz. https://nandandenim.com/wp-content/uploads/2018/03/Dividend-Distribution-Policy.pdf.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

Nandan Denim Limited did not have any Subsidiary, Joint Venture or Associate Company for the year ended 31st March, 2018.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors retiring by rotation

Mr. Jyotiprasad Chiripal (DIN: 00155695), Managing Director of the Company, aged 65 years, and Mr. Prakashkumar Sharma (DIN: 06639254), Whole Time Director retires by rotation as a Director at the conclusion of this Annual General Meeting 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 reappointment. Appropriate resolution for their re-appointment are being placed for your approval at the ensuing AGM.

Change in Directors

The Board of Directors of the Company at their meeting held on 29th May, 2017 appointed Mr. Jyotiprasad Chiripal as Managing Director of the Company for a period of five years w.e.f. 1st June, 2017, subject to regulatory approvals. Mr. Jyotiprasad Chiripal, a commerce graduate, has considerable experience in textile sector. In a career spanning over four decades, he has extensive experience in various areas of management and business excellence. The details of Mr. Jyotiprasad Chiripal are set out in the Annexure to Notice forming part of this Report.

The Board of Directors of the Company, at the same meeting, accepted the resignation of Mr. Brijmohan Chiripal as Managing Director with effect from the close of business hours of 31st May, 2017. Your Directors place on record their appreciation for the valuable advice and guidance rendered by Mr. Brijmohan Chiripal during his tenure as Managing Director. He had been Managing Director of the Company since October 2004.

Further, Mr. Prakashkumar Sharma was appointed as Whole Time Director w.e.f. 1st June, 2017. Mr. Prakashkumar Sharma has done his Graduation in Science (BSc) and has also completed Post Graduate Diploma from Association of Textiles along with Diploma in Industrial Safety. He is having a wide experience of thirty years in textile industry. He was earlier associated with renowned Denim and Terry Towel manufacturing Companies

During the period under review, Mr. Pradeep Kumar Shrivastava stepped down as Whole Time Director from the Board with effect from 15th April, 2017. During his association with the Company, his contribution to the Board and Company has been immensely valuable.

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 thereunder as well as Regulation 16 of the Listing Regulations [including any statutory modification(s) or reenactments) for the time being in force] so as to qualify themselves to be appointed as Independent Directors.

Nomination and Remuneration Policy

The Company has formulated and adopted the Nomination and Remuneration Policy in accordance with the provisions of Companies Act, 2013 read with Rules issued thereunder and the Listing Regulations.

The salient features of the Policy are set out in the Corporate Governance Report which forms part of this Annual Report. This Policy is also available on the website of the Company.

Board Evaluation

The Company’s Board has formulated the criteria for performance evaluation of the Directors as a whole which broadly covers the Board role, Board / Committee membership, practice, procedure and collaboration.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 of the Listing Regulations, 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.

In line with the SEBI Guidance note on Board Evaluation, a Board effectiveness assessment questionnaire was designed for the performance evaluation of the Board, its Committees, Chairman and individual Directors and in accordance with the criteria set and covering various aspects of performance including structure of the Board, meetings of the Board, functions of the Board, role and responsibilities of the Board, governance and compliance, evaluation of risks, grievance redressal for investors, conflict of interest, stakeholder value and responsibility, relationship among Directors, Director competency, Board procedures, processes, functioning and effectiveness. The said questionnaire was circulated to all the Directors for the annual performance evaluation.

The Board subsequently evaluated its own performance, the working of its Committees (Audit, Nomination and Remuneration and Stakeholders Relationship Committee) and Independent Directors (without participation of the relevant Directors). There were a few suggestions for improving the performance of the Board viz. apprising the Board of the latest developments from time to time from governance prospective.

Key Managerial Personnel

As per 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, the following officials were the ‘Key Managerial Personnel’ for the year 2017-18:

- Mr. Jyotiprasad Chiripal - Managing Director

- Mr. Deepak Chiripal - Chief Executive Officer

- Mr. Prakashkumar Sharma - Whole Time Director

- Mr. Ashok Bothra - Chief Financial Officer

- Ms. Purvee Roy - Company Secretary

Disclosure relating to remuneration of Directors, Key Managerial Personnel and Particulars of Employees

The remuneration paid to the Directors is in accordance with the Nomination & 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) thereof for the time being in force). The salient features of the Nomination & Remuneration Committee have been outlined in the Corporate Governance which forms part of this Report.

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 tentative dates of Board and Committee Meetings is decided and informed well in advance to facilitate the Directors to arrange their schedule and to ensure participation in the meetings.

During the financial year 2017-18, four board meetings were held on 29th May, 2017; 14th August, 2017; 11th November, 2017 and 13th February, 2018 respectively. The gap between two Board Meetings did not exceed 120 days and a meeting was held in every quarter.

The details of the meetings of the Board of Directors and its Committees, convened during the financial year 2017-18 are given in the Corporate Governance Report which forms a part of this Report.

BOARD COMMITTEES

Your Company has five Committees of the Board, namely:

- Audit Committee

- Stakeholders’ Relationship Committee

- Nomination and Remuneration Committee

- Corporate Social Responsibility Committee

- 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.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis as stipulated under the Listing Regulations is presented in a separate section forming part of this Annual Report. It speaks about the overall industry structure, global and domestic economic scenarios, developments in business operations / performance of the Company’s business and other material developments during the financial year 2017-18.

LOANS AND INVESTMENTS

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, 2018, are set out in Note 5 & 6 to the Financial Statements of the Company.

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 corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, 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 accountability 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). Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a separate section titled ‘Report on Corporate Governance’ has been included in this Report which also contains certain disclosures required under the Companies Act, 2013. The Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is also published in this Annual Report.

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.

DISCLOSURE REQUIREMENTS

- Details of the familiarization programme of the Independent Directors are available on the website of the Company;

- 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;

- The Company does not have any scheme or provision of money for the purchase of its own shares by employees/ Directors or by trustees for the benefit of employees/ Directors;

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

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31st March, 2018 was RS.48.05 crores, same as that on 31st March, 2017.

The Company’s equity shares are listed on the BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The shares are actively traded on BSE and NSE and have never been suspended from trading.

AUDIT COMMITTEE

The Company has in place an Audit Committee in terms of requirements of the Act read with rules framed thereunder and Listing Regulations. The details relating to the Audit Committee are given in the Corporate Governance Report forming part of this report. The recommendations of Audit Committee were duly accepted by the Board of Directors.

VIGIL MECHANISM

The Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations. A vigil mechanism has been implemented through the adoption of Whistleblower Policy with an objective to enable any employee or Director or vendor, raise genuine concern or report evidence of activity by the Company or its employee or Director or vendor that may constitute: Instances of corporate fraud; unethical business conduct; a violation of Central or State laws, rules, regulations and/or any other regulatory or judicial directives; any unlawful act, whether criminal or civil; malpractice; serious irregularities;

impropriety, abuse or wrong doing; deliberate breaches and non-compliance with the Company’s policies; questionable accounting/audit matters/financial malpractice.

Safeguards to avoid discrimination, retaliation, or harassment, and confidentiality have been incorporated in the policy. All employees and Directors have access to the Chairman of the Audit Committee in appropriate and exceptional circumstances. Further, the Chairman of the Audit Committee has access rights to the whistle blower portal.

The Company has disclosed information about the establishment of the Whistleblower Policy on its website at https://nandandenim.com/wp-content/uploads/2018/03/ WhistleBlowerPolicy.pdf

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the Directors of the Company confirm that:

a. in the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable Accounting Standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

b. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the Profit and Loss of the Company for the financial year ended 31st March, 2018;

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

d. the annual accounts have been prepared on a ‘going concern’ basis;

e. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively; and

f. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are 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

Human Resources:

Your Company attaches significant importance to continuous upgradation of Human Resources for achieving the highest levels of efficiency, customer satisfaction and growth. As part of the overall HR Strategy, training programmes have been organized for employees at various levels through both internal and external faculties during the year under review, thereby strengthening employee engagement and learning. This has helped to ensure that learning is not time bound and location bound, at the same time employees have access to the information.

With the talent base of the Company reaching to almost 3000 employees, the average age of the employee base has gone younger. Your Company has taken various initiatives to engage using digital and technology platforms. It has introduced Uknowva and Intranet Platform for its employees for ensuring seamless interaction and learning processes for employees.

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, 2013 read 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 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.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in “Annexure-E” to this report.

AUDITORS

Statutory Auditor

In terms of Section 139 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 [including any statutory modification(s) of re-enactment(s) thereof for the time being in force], M/s Samir M. Shah & Associates, Chartered Accountants were appointed as Statutory Auditors of the Company for a term of five consecutive years, from the conclusion of the 23rd Annual General Meeting until the conclusion of 28th Annual General Meeting of the Company to be held in the calendar year 2022, subject to annual ratification by members at every Annual General Meeting, on such remuneration as may be decided by the Audit Committee of the Board. However, pursuant to Section 40 of the Companies (Amendment) Act, 2017 (i.e. Section 139 of the Companies Act, 2013) which was notified w.e.f. 7th May, 2018, ratification of appointment of Statutory Auditors by the members at every AGM is no longer required. Accordingly, ratification resolution is not being taken up at the ensuing Annual General Meeting of the Company.

The Auditors’ Report for the financial year ended 31st March, 2018 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 13th August, 2018 have 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 2018-19 to conduct the audit of the cost records of your Company. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee. The requisite resolution for ratification of remuneration of Cost Auditors by members of the Company has been set out in the Notice of ensuing Annual General Meeting. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment within the meaning of the said Act.

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 2018-19 along with a certificate confirming their independence and arm’s length relationship.

Secretarial Auditor

M/s Sandip Sheth & Associates, Company Secretaries, were appointed as Secretarial Auditors of the Company for the financial year 2017-18 pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as “Annexure - D” to this Report.

Explanation to the observations of Secretarial Audit Report:

As prescribed under section 204(1) of the Act, the Company has received the Secretarial Audit Report. The observations made therein and the corresponding explanations are given below:

1. The Company has not filed forms with respect to appointment of Cost auditors for the period under review.

The Company has initiated process of filing required e-forms and the same shall be filed in due course of time.

2. Cost Audit Report for the period has not been filed as mandated by Central Government.

The Company has initiated process of filing required e-forms and the same shall be filed in due course of time.

3. Appointment of Managing Director and Whole Time Director not duly made during the period under review.

Discrepancies observed by Secretarial Auditor seeking explanations were provided through information, opinion and documents and the management has reason to believe that generally required material compliances and disclosures were made by the Company. Further, Company has sought opinion from leading law firm and they have opined that Company has complied with requirements of the Act.

4. Compliance with respect to Investor Education and Protection Fund Rules has not been made by the Company.

Since the data for such compliance is usually received from Banks and due to non submission of data from Bank to the Company, the onward submission of such compliances has been pending. Company has been rigorously making follow up for such data submission from Bank. Company is committed to comply the same, once the necessary information is received from the Bank.

5. Service of Notice of Annual General Meeting and its related compliances have not been duly made.

No adverse comment has been received from the stock exchanges. Also, Annual Report was sent to shareholders within prescribed time. Hence, compliances have been made and delayed submission to exchanges was accidental but genuine and bonafide.

6. Few E Forms as required to be filed with the Ministry of Corporate Affairs have not been filed during the period under review.

It is confirmed that few e- Forms were filed with delay due to certain legal clarifications needed before its filling and hence the same were pending for filing seeking such clarifications.

7. The Company has not observed compliance of provisions of Section 102, 161, 188 and Rules made there under, with regards to disclosures in Annual Report for the financial year 2016-17.

The Company believes that compliances with respect to referred provisions have been made with general disclosure as against specific disclosure which management understands that is not significant one. However, Company has complied with the relevant sections of the Companies Act. References to sections may be missed out at few places which has no bearing on the compliance of the provisions of the Act. Henceforth, the regulatory provision shall be confirmed in entirety.

8. One of the Key Managerial Personnel position is not in compliance with requirement of provisions of Section 203 of the Companies Act, 2013.

The E Form was not filed due to certain legal clarifications required. Company shall file the same in due course.

The Company is in compliance with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India.

M/s Sandip Sheth & Associates, Company Secretaries have been appointed to conduct the Secretarial Audit of the Company for the financial year 2018-19. They have confirmed that they are eligible for the said appointment.

Auditors’ certificate on corporate governance

As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors’ Certificate on corporate governance is enclosed as part of Board’s report. The Auditors’ Certificate for fiscal 2018 does not contain any qualification, reservation or adverse remark.

Details in respect of frauds reported by Auditors other than those which are reportable to the Central Government

The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.

DISCLOSURE UNDER SCHEDULE V(F) OF THE SEBI (LODR) 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 2017-18, 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 thereunder and the Listing Regulations. Approval for the transactions (which may qualify as material transactions) that the Company plans to enter with Related Parties during the year 2017-18 form part of the Notice.

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 thereunder and the Listing Regulations.

The details of the related party transactions as per Accounting Standard 18 are set out in Note 35 to the Financial Statements forming part of this 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 F”.

The Company’s Policy on dealing with Related Party Transactions is available on the Company’s website at https://nandandenim.com/wp-content/uploads/2018/03/ RelatedPartyTransactionPolicy.pdf.

POLICIES OF THE COMPANY

The Company is committed to good corporate governance and has consistently maintained its organizational culture as a remarkable confluence of high standards of professionalism and building shareholder equity with principles of fairness, integrity and ethics. The Board of Directors of the Company have from time to time framed and approved various Policies as required by the Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations. These Policies and Codes are reviewed by the Board and are updated, if required.

Some of the key policies adopted by the Company are as follows:

The above mentioned policies and code are available on the website of the Company

DETAILS OF INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

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 updation 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 accounting information accurately and in a timely manner. Any non - compliance noticed is to be reported and actioned 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.

IMPLEMENTATION OF IND AS

The accounts have been prepared in accordance with IND-AS and Disclosures thereon comply with requirements of IND-AS, stipulations contained in Schedule- III (revised) as applicable under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014, Companies (Indian Accounting Standards) Rules 2015 as amended from time to time, MSMED Act, 2006, other pronouncement of ICAI, provisions of the Companies Act and Rules and guidelines issued by SEBI as applicable.

Upto financial year ended on 31st March, 2017, the Company has prepared the accounts according to the Previous GAAP. The financial statements for the year ended 31st March, 2018 are the first to have been prepared in accordance with IND AS. Previous years’ figures have been presented as comparatives. The transition was carried out retrospectively as on the transition date which is 1st April, 2015, and for any variation in the amounts represented in the comparative balance sheet vis-a-vis earlier presentation, reconciliation is given as part of notes.

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

The Company has in place a Policy on Prevention of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“Prevention of Sexual Harassment of Women at Workplace Act”) and Rules framed thereunder and an Internal Complaints Committee (ICC) has also been set up to redress complaints received regarding sexual harassment at three places i.e. Corporate Office, Piplej Plant and Bareja Plant.

The Company believes in zero tolerance towards sexual harassment at workplace and maintains itself as a safe and non - discriminatory organization. The ICC members have been trained in handling and resolving complaints and also meet at regular intervals.

During the financial year 2017-18, no cases in the nature of sexual harassment were reported at any workplace of Nandan Denim Limited.

CORPORATE SOCIAL RESPONSIBILITY

During the financial year ended 31st March, 2018, the Company incurred CSR expenditure of RS.1.55 cr. (Rupees One Crore and Fifty Five Lakh Only). The CSR initiatives of the Company is mainly under the thrust area of education.

The Company’s CSR Policy statement and Annual Report on the CSR activities undertaken during the financial year ended 31st March, 2018, in accordance with section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) is set out in “Annexure C” to this Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return as on 31st March, 2018 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 - B” to this Report.

SECRETARIAL STANDARDS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.

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 has been no change in the nature of business of the Company.

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. 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. Annual Report is also 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.

ANNEXURES

Following statements/reports/certificates are set out as Annexures to the Directors’ Report:

- Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo

- Extract of Annual Return under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 (1) of Companies (Management & Administration) Rules, 2014 in Form MGT-9.

- Details of CSR activities and spends under Section 135 of the Companies Act, 2013.

- Secretarial Audit Report pursuant to Section 204 of the Companies Act, 2013.

- Information as per Section 197

- Form AOC - 2

APPRECIATIONS

The Board of Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. Further, the Board sincerely conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board of Directors

Vedprakash Chiripal Jyotiprasad Chiripal

Place: Ahmedabad Chairman Managing Director

Date: 13th August, 2018 DIN: 00290454 DIN: 00155695


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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