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Directors Report of Indo Count Industries Ltd.

Mar 31, 2017

Dear Members,

On behalf of the Board of Directors (“the Board”), it gives me immense pleasure to present the Twenty Eighth Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended 31st March, 2017.

FINANCIAL RESULTS

(Rs, In Crores, except EPS)

Stand

alone

Conso

idated

2016-17

2015-161

2016-17

2,257.80

2015-16*

Total Revenue

2,084.74

2,048.63

2,110.60

EBIDTA

418.71

443.80

428.45

464.52

Less: Finance Cost

39.43

51.70

42.13

55.08

Less: Depreciation

31.18

28.84

33.13

30.14

Profit before Tax

348.10

363.26

353.19

379.30

Tax Expenses

120.07

125.58

121.14

127.99

Net Profit

228.03

237.68

232.05

251.31

Other comprehensive income (net of tax)

(1.11)

0.91

2.22

(10.00)

Total Comprehensive income

226.92

238.59

234.27

241.31

Basic & Diluted EPS (in '')

11.55

12.04

11.76

12.73

Cash Profit

312.38

308.10

322.55

311.56

Retained Earnings

787.07

574.40

806.70

590.93

*Figures of FY 2015-16 are restated as per IND AS

OPERATIONAL AND FINANCIAL PERFORMANCE OVERVIEW

The year 2016-17 was a year of consolidation for your Company. During the year under review, your Company showcased its operational excellence along with consistent financial performance on the top line.

At a consolidated level, your Company scaled new heights by achieving total revenue of Rs, 2257.80 Crores as against Rs, 2110.60 Crores in the previous year, thereby registering top-line growth of 7%. Your Company reported EBIDTA and net profit of Rs, 428.45 Crores and Rs, 232.05 Crores respectively. The long term debt equity ratio has reduced from 0.09 to 0.03 and EPS stood at Rs, 11.76 for the year ended 31st March, 2017.

On a standalone basis, total revenue stood at Rs, 2,084.74 Crores for the year ended 31st March, 2017 as against Rs, 2,048.63 Crores in the previous year. Further, your Company achieved EBIDTA and net profit of Rs, 418.71 Crores and Rs, 228.03 Crores respectively.

Against the backdrop of challenging market environment, your Company''s business continues to track ahead satisfactorily on the back of dynamic response to market trends, enduring customer relationships, “Customer First approach” and strong product portfolio.

Your Company exports to more than 54 countries and has a successful track record in global market as a key supplier of bed linen to major retail, hospitality and fashion brands. Continuing focus on export markets, your Company efficiently retained existing business and at the same time diligently worked towards expanding into newer geographies and acquiring new customers.

During the year under review, your Company launched three licensed brands namely “Harlequin”, “Scion” and “Sanderson” in North America within the fashion bedding segment.

In FY 2016-17, your Company ventured in domestic home market through its subsidiary viz. Indo Count Retail Ventures Private Limited (ICRVPL). ICRVPL introduced brand “Boutique Living”, an asp rational brand, in India which has already been successful in the USA. Boutique Living is sold through Multi brand outlets, large format stores and E-commerce across 57 cities in India.

Apart from showrooms in UK, USA and Australia, during the year under review, your Company has set up a 9,200 sq. ft. experiential showroom at New York with a capacity to display 32 beds so that customers can touch and feel array of product on offer. Further, in order to reach out to different customers, your Company has been showcasing its collections at various international exhibitions and trade fairs.

The business operations, overview and outlook are provided in detail in the Management Discussion and Analysis.

DIVIDEND

During the year under review, pursuant to the approval of the Board, your Company paid interim dividend @20% i.e. '' 0.40 per equity share of face value of '' 2/- each.

Your Directors are pleased to recommend a Final Dividend @ 20% i.e. '' 0.40 per equity share of face value of Rs, 2/- each subject to the approval of members of the Company at the ensuing Annual General Meeting. If approved by the members, the total dividend payout for FY 2016-17 will be 40% i.e. Rs, 0.80 per equity share of face value of Rs, 2/- each aggregating to Rs, 19.02 Crores (including dividend distribution tax) (previous year Rs, 9.50 Crores).

The aforesaid dividends are in line with the Dividend Distribution Policy adopted by the Company.

DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (“Listing Regulations”) top five hundred listed entities based on market capitalization are required to formulate a Dividend Distribution Policy. Accordingly, the Board of your Company has approved and adopted Dividend Distribution Policy which is given separately and forms part of this Annual Report. The Dividend Distribution Policy is also uploaded on the website of the Company and web-link for the same is www.indocount.com/images/investor/Dividend-Distribution-Policy1.pdf

AWARDS AND RECOGNITIONS

Your Company continues to deliver unmatched performance amongst its peers and has been conferred with awards every year. During the year under review, your Company was awarded Silver Trophy from TEXPROCIL for the 2nd highest exports of made - ups in “Bed Linen/Bedsheets/Quilts” under the Category - III for the year 2015-16; for the second consecutive year.

Some of the other accolades and recognitions received by your Company are:

- AI 2017 Business Excellence Award by AI Global Media Company;

- One of the India''s Fasted Growing Companies -Rated by Business World - Edition April, 2017.

SHARE CAPITAL AND SUB-DIVISION OF EQUITY SHARES

In order to improve the liquidity of your Company''s shares and with a view to encourage the participation of small investors by making Equity Shares of the Company affordable, your Company sub-divided the Equity Shares of the Face Value of '' 10/- each to Face Value of '' 2/- each w.e.f. 15th November, 2016 (“Record Date”). Accordingly, 39,479,934 Equity Shares of '' 10/each were sub-divided into 197,399,670 Equity Shares of '' 2/- each. There was no change in the total issued, subscribed and paid up share capital of the Company.

As on 31st March, 2017, the total issued, subscribed and paid up share capital of your Company stood at '' 394,799,340/- comprising of 197,399,670 Equity Shares of Rs, 2/- each.

In view of sub-division of equity shares, the Authorized Share Capital of the Company was also altered and as on 31st March, 2017, the Authorized share Capital of your Company was Rs, 60 Crores comprising of 27,50,00,000 equity shares of Rs, 2/- each and 50,00,000 preference shares of Rs, 10/- each.

During the year under review, your Company has not issued any equity shares with differential voting rights or sweat equity shares. Further, your Company does not have any employee stock option scheme or employee stock purchase scheme.

CREDIT RATING

Your Directors are glad to inform that during the year under review, ICRA and CARE upgraded the credit rating from “ICRA A” to “ICRA AA-” (Double A minus) with outlook as Stable and from “CARE A” to “CARE AA -” for Company''s Long Term Bank Facilities (Term Loans/ Fund Based Facilities) signifying high degree of safety regarding timely servicing of financial obligations. Such facilities carry very low credit risk.

Further, for the Company''s short term bank facilities, ICRA and CARE upgraded the rating from “ICRA A1” to “ ICRA A1 (A One plus)” and from “CARE A1” to “CARE A1 ” which is the highest rating indicating very strong degree of safety regarding timely payment of financial obligations. Such facilities carry lowest credit risk.

The up gradation of said ratings by ICRA and CARE demonstrates your Company''s strengthened leading position in the niche Home Textiles segment coupled with sustained cash accruals generated in the business which has led to a consistent strong operational and financial performance.

ADOPTION OF INDIAN ACCOUNTING STANDARDS

In accordance with the notification issued by the Ministry of Corporate Affairs (MCA), your Company is required to prepare financial statements under Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act, 2013 read with rule 3 of the Companies (Indian Accounting Standards Rules, 2015) and Companies (Indian Accounting Standards) Amendment Rules, 2016 with effect from 1st April, 2016. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with rule 7 of Companies (Accounts) Rules, 2014.

Accordingly, your Company has adopted Indian Accounting Standard (“Ind AS”) with effect from 1st April, 2016 with the transition date of 1st April, 2015 and the Financial Statements for the year ended 31st March, 2017 have been prepared in accordance with Ind AS. The financial statements for the year ended 31st March, 2016 have been restated to comply with Ind AS to make them comparable.

The MCA notification also mandates that Ind AS shall be applicable to Indian Subsidiary Companies, Joint Venture or Associates of the Company. Hence, your Company and its Indian Subsidiaries have prepared and reported financial statements under Ind AS w.e.f. 1st April, 2016, including restatement of the opening balance sheet as at 1st April, 2015.

The effect of the transition from IGAAP to Ind AS has been explained by way of reconciliation in the Standalone and Consolidated Financial Statements.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company are prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 and forms part of this Annual Report.

A copy of the Audited Financial Statements of the Subsidiaries shall be made available for inspection at the Registered Office of the Company during business hours on any working day upto the Annual General Meeting. Any shareholder interested in obtaining a copy of separate Financial Statements of the subsidiaries shall make specific request in writing to the Company Secretary. The Audited Financial Statements of the subsidiaries are also available on the website of the Company at www.indocount.com.

SUBSIDIARIES

During the year under review, your Company has acquired 82.5% stake in Indo Count Retail Ventures Private Limited (ICRVPL) thereby ICRVPL become subsidiary of your Company, w.e.f. 24th August, 2016.

As on 31st March, 2017, your Company has 5 subsidiaries namely Pranavaditya Spinning Mills Limited, Indo Count Global Inc, USA, Indo Count UK Limited, Indo Count Australia Pty Ltd. and Indo Count Retail Ventures Private Limited. Your Company does not have any Associate Company pursuant to the provisions of the Companies Act, 2013 and has not entered into any joint venture agreement.

Pursuant to the provisions of Section 129 (3) of the Companies Act, 2013 read with rules made there under, a statement containing salient features of the financial position of subsidiaries is given in Form AOC-1 attached as “Annexure 1” forming integral part of this Report.

There is no material subsidiary in terms of Regulation 16 of the Listing Regulations. However, your Company has adopted a policy for determining material subsidiaries, which can be accessed at http://www.indocount.com/ images/investor/ICIL-Policy-on-Material-Subsidiaries.pdf.

Performance of Subsidiaries Pranavaditya Spinning Mills Limited

Pranavaditya Spinning Mills Limited (PSML) is a Listed Indian subsidiary of your Company. Indo Count Industries Limited (“ICIL”) has 74.53% of Equity shareholding of PSML. The Company is mainly engaged in spinning of cotton and manufacturing of yarn. The plant of the Company is situated at Kolhapur, Maharashtra.

For the year ended 31st March, 2017, turnover of the Company stood at Rs, 5856.21 Lakhs (Previous Year -Rs, 6081.25 Lakhs). The Company incurred loss of Rs, 56.77 Lakhs for the year ended 31st March, 2017 (Previous Year loss - Rs, 33.48 Lakhs). This was mainly due to high volatility in cotton price.

Indo Count Global Inc

Indo Count Global Inc (ICGI) is a wholly owned foreign subsidiary of your Company. ICGI was incorporated in the state of Delaware, USA in the year 2011. The main activity of the Company is wholesaling of linens. Turnover of the Company for the year ended 31st March, 2017 stood at Rs, 32,480.29 Lakhs (Previous Year Rs, 39,789.85 Lakhs). The profit after tax for the year ended 31st March, 2017 stood at Rs, 276.85 Lakhs as compared to Rs, 521.04 Lakhs in the previous year.

Indo Count UK Ltd

Indo Count UK Ltd (ICUKL) is a wholly owned foreign subsidiary of your Company. ICUKL is incorporated in London. The Company is engaged in trading of products of ICIL. Being the first year of commencement of the business, total turnover of the Company as on 31st March, 2017 stood at Rs, 159.32 Lakhs. The Company incurred loss of Rs, 4.35 Lakhs for the year ended 31st March, 2017.

Indo Count Retail Ventures Private Limited

Indo Count Retail Ventures Private Limited (ICRVPL) is a subsidiary of your Company.

Being first year of operations, as on 31st March, 2017, turnover stood at Rs, 387.21 Lakhs and the Company incurred a loss of Rs, 24.43 Lakhs.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, there were changes at the Board level as given below:

Executive Chairman of the Company w.e.f. 9th May, 2016.

- Pursuant to the recommendation of Nomination and Remuneration Committee, the Board of Directors of your Company appointed Mr. Mohit Anilkumar Jain as an Additional Director and Managing Director of the Company for a period of 5 years w.e.f. 9th May, 2016, as part of a long term succession plan. The said appointment of Mr. Mohit Jain was approved by the members at the Annual General Meeting held on 26th July, 2016.

- Mr. R. N. Gupta, Joint Managing Director was associated with the Company from the year 1996 and had played a vital role in the growth of the Company. However, owing to his advanced age, he expressed to the Board that he shall not be in a position to devote his full time to manage the affairs of the Company and hence resigned from the position of Director designated as “Joint Managing Director” of the Company w.e.f. 9th May, 2016. The Board placed on record its appreciation for contributions made by him during his tenure as Joint Managing Director of the Company.

At the Annual General Meeting of the Company held on 26th July, 2016, Mr. Anil Kumar Jain, Executive Chairman, Mr. Kailash R. Lalpuria, Executive Director and Mr. Kamal Mitra, Director (Works) were re-appointed for a period of three years w.e.f. 1st October, 2016.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Kailash R. Lalpuria, Executive Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for the re-appointment. The Board recommends his re-appointment for consideration of the members at the ensuing Annual General Meeting. Members are requested to refer the Notice of the ensuing Annual General Meeting for brief profile and other related information of Mr. Kailash R. Lalpuria, Director retiring by rotation.

All the Independent Directors of the Company have given declarations that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013 and Regulation 16 (1) (b) of the Listing Regulations.

During the year under review, the Board noted with deep regret sad demise of Mr. R. Sundaram, Chief Financial Officer of the Company on 28th July, 2016 and recorded its appreciation for the contribution made by Mr. R. Sundaram during his tenure with the Company.

Pursuant to the recommendation of Nomination and Remuneration Committee and Audit Committee, Mr. Dilip Kumar Ghorawat was appointed as the Chief Financial Officer of the Company w.e.f. 12th September, 2016.

In terms of Section 203 of the Companies Act, 2013, as on 31st March, 2017, Mr. Anil Kumar Jain, Executive Chairman, Mr. Mohit Jain, Managing Director, Mr. Kailash R. Lalpuria, Executive Director, Mr. Kamal Mitra, Director (Works), Mr. Dilip Kumar Ghorawat, Chief Financial Officer and Mrs. Amruta Avasare, Company Secretary are Key Managerial Personnel (KMP) of the Company.

NUMBER OF BOARD MEETINGS

During the year under review, Five (5) Board Meetings were held on 7th May, 2016, 8th June, 2016, 23rd August,

2016, 25th November, 2016 and 11th February, 2017. The maximum interval between any two consecutive Board Meetings did not exceed 120 days.

COMPANY’S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS

Your Company has adopted Nomination and Remuneration Policy for the appointment and remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The Nomination and Remuneration Policy is given in the Corporate Governance Report.

ANNUAL EVALUATION OF BOARD PERFORMANCE AND ITS COMMITTEE AND DIRECTORS

Criteria of performance evaluation of the Board of Directors including Independent Directors are laid down by the Nomination and Remuneration Committee of the Company. Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out performance evaluation of its own, evaluation of working of the committees and performance of all Directors based on the parameters specified in the Corporate Governance Report. A structured questionnaire containing the parameters of performance evaluation was circulated to all the Directors. A separate meeting of Independent Directors of the Company was held on 21st April, 2016 in which Independent Directors inter-alia reviewed performance of Executive Chairman and other Non-Independent Directors. The Board expressed their satisfaction with the evaluation process.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 (3) (c) and 134(5) of the Companies Act, 2013, your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, state and confirm that:

1. in the preparation of the annual accounts for the year ended 31st March, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. such accounting policies as mentioned in the notes to the Financial Statements for the year ended 31st March, 2017 have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2017 and of the profit of the Company for the year ended on that date;

3. 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;

4. the annual financial statements for the year ended 31st March, 2017 have been prepared on a going concern basis;

5. internal financial controls to be followed by the Company have been laid down and that the said financial controls were adequate and were operating effectively;

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

CORPORATE SOCIAL RESPONSIBILITY

Your Company recognizes the vital role played by society at large in its growth and development and strives to discharge its social responsibility as a corporate citizen. The key philosophy of all our Corporate Social Responsibility (CSR) initiatives is guided by our belief “Every Smile Counts ...”. Our CSR projects focus on participatory and collaborative approach with the community. Over a period of last two years, your Company has emphasized CSR projects in the areas of Education, Healthcare, Women empowerment and Water and Sanitation.

Pursuant to the provisions of Section 135 of the Companies Act, 2013, the Board has constituted a CSR Committee headed by Dr. (Mrs.) Vaijayanti Pandit as the Chairperson of the Committee. Mr. Anil Kumar Jain and Mr. Kailash R. Lalpuria are members of the CSR Committee. Your Company has adopted a Corporate Social Responsibility (CSR) policy in compliance with the provisions of the Act and is available on web-link http://www.indocount.com/images/investor/ICIL-CSR-Policy.pdf.

Your Company implements the CSR projects through ''Indo Count Foundation'' and has also collaborated up with other trusts for carrying out CSR Activities. The Report on CSR activities implemented by your Company during the year under review is provided as “Annexure 2” to this Report.

AUDIT COMMITTEE

During the year under review, Mr. Kailash R. Lalpuria, Executive Director was appointed as Member of the Audit Committee w.e.f. 9th May, 2016 in place of Mr. R. N. Gupta. As on 31st March, 2017, the Audit Committee comprises of Mr. P. N. Shah as Chairman, Mr. R. Anand, Mr. Prem Malik and Mr. Kailash R. Lalpuria. More details about the Audit Committee are given in Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

STATUTORY AUDITORS

M/s. B. K. Shroff & Co., Chartered Accountants (Firm Registration No. 302166E) were appointed as the Statutory Auditors of the Company to hold office for a transition period of 3 years i.e. from the conclusion of the 25th Annual General Meeting (AGM) of the Company held on 23rd August, 2014 till the conclusion of the 28th AGM of the Company. The term of M/s. B. K. Shroff & Co., Chartered Accountants as the Statutory Auditors is till the conclusion of ensuing Annual General Meeting of the Company.

The Board of Directors of the Company place on record its appreciation to the services rendered by M/s. B. K. Shroff & Co., Chartered Accountants as the Statutory Auditors of the Company.

In accordance with the provisions of Section 139 of the Companies Act, 2013, M/s. Suresh Kumar Mittal & Co., Chartered Accountants (Firm Registration No. 500063N) are proposed to be appointed as the Statutory Auditors of the Company for a period of 5 years commencing from the conclusion of the ensuing 28th AGM till the conclusion of 33rd AGM subject to the ratification by the members at every AGM.

M/s. Suresh Kumar Mittal & Co, Chartered Accountants, have consented to the said appointment, and have confirmed that their appointment, if made, will be in accordance with the provisions of Section 139 read with Section 141 of the Companies Act, 2013.

Accordingly, the Board of Directors of the Company recommends the resolution in relation to the appointment of M/s. Suresh Kumar Mittal & Co., Chartered Accountants, as Statutory Auditors of the Company and fixation of their remuneration for approval of the members of the Company.

AUDITORS’ REPORT

The Auditors'' Report on standalone and consolidated financial statements forms integral part of this Annual Report. The Auditors'' Report does not contain any qualifications, reservations, adverse remarks, disclaimer or emphasis of matter. Notes to the Financial Statements are self-explanatory and do not call for any further comments.

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 reenactment for the time being in force).

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with rules there under, the Board has appointed M/s. Kothari H. & Associates, a firm of Company Secretaries in Practice to conduct Secretarial Audit of the Company for the year ended 31st March, 2017. The Secretarial Audit Report issued by them in Form No. MR-3 is provided as “Annexure 3” to this Report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remark.

SEGMENT

The Company operates only in a single segment i.e. Textile Segment.

PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposits from public, under Chapter V of the Companies Act, 2013.

CAPACITY EXPANSION

The Board of Directors of the Company at its meeting held on 24th October, 2015 approved CAPEX of '' 175 Crores for Phase I towards:

i) Increasing processing capacity from current 68 million meters to 90 million meters

ii) Setting up a water effluent treatment / RO plant

iii) Automation of cut and sew and warehousing

Your Directors are pleased to inform that the capacity expansion under Phase I from 68 million meters to 90 million meters has been completed.

At the Board Meeting held on 7th May, 2016, the Board had approved CAPEX under Phase II for approximately Rs, 300 Crores. This Capital expenditure will be for upgrading the existing Spinning Facilities, Investments in additional Weaving (with specialized looms) and value added equipments for delivery of fashion and utility bedding. This expansion under Phase 2 is in progress.

CORPORATE GOVERNANCE REPORT

As per Regulation 34(3) read with Schedule V of the Listing Regulations, your Company has complied with the requirements of corporate governance. A Corporate Governance Report along with Statutory Auditors'' Certificate confirming its compliance for the year ended 31st March, 2017 is provided separately and forms integral part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Regulation 34 of the Listing Regulations, Management Discussion and Analysis containing information inter-alia on industry trends, your company''s performance, future outlook, opportunities and threats for the year ended 31st March, 2017, is provided in a separate section forming integral part of this Annual Report.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92 (3) of the Companies Act, 2013, the Extract of the Annual Return as on 31st March, 2017 in Form No. MGT-9 is provided as “Annexure 4” to this Report.

BUSINESS RESPONSIBILITY REPORT

Pursuant to the Regulation 34 of the Listing Regulations, Business Responsibility Report is mandatory to be published for top 500 companies based on market capitalization as on 31st March, 2017. Your Company is amongst top 500 Listed Companies in India based on market capitalization as on 31st March, 2017. Accordingly, Business Responsibility Report (BRR) for the year ended 31st March 2017 is given separately and forms part of this Annual Report.

RELATED PARTY TRANSACTIONS

All Related Party Transactions entered during FY 201617 were on an arm''s length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. There were no material related party transactions during the year under review that would require approval of shareholders under Listing Regulations.

The prior omnibus approval of Audit Committee is obtained for all Related Party Transactions. A statement of all Related Party Transactions is reviewed by the Audit Committee on a quarterly basis. Your Company has adopted a policy on Related Party Transactions. The policy as approved by the Board has been uploaded on the Company''s website and can be accessed at http://www.indocount.com/images/investor/ICIL-

Policy-on-Related-Party-Transactions.pdf

Notes to the Financial Statements contains details of Related Party Transactions. Pursuant to Section 134 of the Companies Act, 2013, particulars of contracts / arrangements with Related Parties are provided in Form AOC-2 is provided as “Annexure 5” to this Report.

PARTICULARS OF LOANS, INVESTMENTS, GUARANTEES, SECURITIES UNDER SECTION 186 OF THE COMPANIES ACT, 2013

During the year under review, your Company has not given any loan or provided any security. Your Company has invested in 8,250 Equity Shares of Rs, 10/- each of Indo Count Retail Ventures Private Limited and in 86,000 Shares of £ 1 each of Indo Count UK Limited. Particulars of investment and corporate guarantee on behalf of Indo Count Global Inc, USA are provided in Notes to the Standalone Financial Statements.

RISK MANAGEMENT

Your Company has adopted Risk Management Policy for risk identification, assessment and mitigation. Major risks identified by the Company are systematically addressed through mitigating actions on a continuous basis. Some of the risks that the Company is exposed to are financial risks, commodity price risk, regulatory risks and economy risks. Risk factors and its mitigation are covered extensively in the Management Discussion and Analysis. The Internal Audit Report and Risk Management Framework is reviewed by the Audit Committee.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177 (10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations, your Company has established a vigil mechanism for the Directors and employees of the Company to report concerns about unethical behavior, actual or suspected incidents of fraud or violation of Code of Conduct. The details of Vigil Mechanism/ Whistle Blower Policy are provided in the Corporate Governance Report. The Vigil Mechanism / Whistle Blower Policy may be accessed on the Company''s website at www.indocount.com.

POLICY ON PREVENTION,

PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

In order to prevent sexual harassment of women at workplace, your Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to look into complaints relating to sexual harassment at workplace of any woman employee. During the year under review, no complaints pertaining to sexual harassment were received and no complaint was pending as on 31st March, 2017.

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

Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo required under Section 134(3) (m) of the Companies Act, 2013 read with rules there under is given as “Annexure 6” forming part of this Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 regarding remuneration of Directors, Key Managerial Personnel and other related disclosure is given as “Annexure 7” to this Report.

Information required under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 viz. Details of top ten employees of the Company in terms of remuneration drawn during 2016-17 and particulars of employees drawing remuneration in excess of the limits specified in Rule 5(2) of said rules is provided in Annexure forming part of this report. As per the provisions of Section 136 of the Companies Act, 2013, the Annual Report and Accounts are being sent to the members of the Company excluding the said Annexure. Any member interested in obtaining a copy of said Annexure may write to the Company Secretary at the Registered Office of the Company. The said annexure will be available for inspection by the members at the Registered Office of the Company twenty one days before and up to the date of ensuing Annual General Meeting during the business hours on working day.

INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY

Your Company maintains adequate internal control system and procedures commensurate with its size and nature of operations. The internal control systems are designed to provide a reasonable assurance over reliability in financial reporting, ensure appropriate authorization of transactions, safeguarding the assets of the Company and prevent misuse/ losses and legal compliances.

The internal control system includes a well defined delegation of authority and a comprehensive Management Information System coupled with quarterly reviews of operational and financial performance, a well structured budgeting process with regular monitoring of expenses and Internal audit. The Internal Audit reports are periodically reviewed by the management and the Audit Committee and necessary improvements are undertaken, if required.

SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS

During the year under review, 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.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2016-17 and the date of this report.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review or said items are not applicable to the Company:

1. Cost Audit

2. Mr. Anil Kumar Jain and Mr. Kamal Mitra who are Non- Executive Directors on the Board of Pranavaditya Spinning Mills Ltd., subsidiary of the Company, receive sitting fees for attending Board / Committee Meeting. Apart from the sitting fees, as aforesaid, none of the Whole-Time Directors of the Company receive any remuneration or commission from any subsidiaries of the Company.

ACKNOWLEDGEMENTS AND APPRECIATION

Your Directors wish to place on record their appreciation for dedicated service and contribution made by the employees of the Company at all levels.

Your Directors would also like to place on record their appreciation for the continued co-operation and support received by the Company during the year from its customers, suppliers, investors, bankers, financial institutions, business partners and other stakeholders.

On behalf of the Board of Directors

ANIL KUMAR JAIN

Date: 15th May, 2017 Executive Chairman

Place: Mumbai DIN: 00086106


Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting the 27th Annual Report on the business and operations of your Company together with the audited financial statements and the Auditors'' Report for the financial year ended 31st March, 2016.

[Rs. in Crores, except EPS]

Particulars Standalone Consolidated

2015-16 2014-15 2015-16 2014-15

Total Revenue 2070.78 1679.95 2212.80 1781.80

EBIDTA 452.92 301.27 473.55 313.66

Less: Finance Cost 51.58 62.53 54.91 65.02

Less: Depreciation 18.19 15.40 18.85 15.97

Less: Exceptional Items - 25.74 - 25.74

Profit before Tax 383.15 197.60 399.79 206.93

Tax Expenses 132.44 58.56 135.05 61.04

Minority Interest 0.02 0.21

Net Profit 250.71 139.04 264.72 145.66

Basic & Diluted EPS (in Rs.) 63.49 37.18 67.04 38.95

Cash Profit 316.43 170.83 330.11 178.53

Net Profit 250.71 139.04 264.72 145.66

Add: Balance in Profit and 244.73 106.70 249.18 108.77 Loss Account

Less: Appropriations

Adjustment on account of - 0.89 - 0.91 depreciation

Transferred to Capital 2.50 - 2.50 - Redemption Reserve

Transferred to Transitional - - 10.92 4.22 Reserve

Dividend on preference 0.06 0.12 0.06 0.12 shares including Dividend Distribution Tax

Interim Dividend on Equity 4.75 - 4.75 - Shares including Dividend Distribution Tax

Proposed Final Dividend 4.75 - 4.75 - on Equity Shares including Dividend Distribution Tax

Balance carried to Profit 483.38 244.73 490.92 249.18 and Loss Account

Operational and Financial Performance Overview

During the financial year under review, on a standalone basis, the Company achieved revenue of Rs. 2,070.78 Crores as against Rs. 1,679.95 Crores in the previous year, thereby registering a growth of 23.3%. EBIDTA for the year under review was Rs. 452.92 Crores, representing a growth of 50.3%. The net profit for the year ended 31st March, 2016 increased from Rs. 139.04 Crores to Rs. 250.71 Crores, showing a remarkable growth of 80.3%.

On a consolidated basis, the Company achieved revenue of Rs. 2,212.80 Crores as against Rs. 1,781.80 Crores in the previous year, thereby registering a growth of 24.19%. EBIDTA during the year has shown a growth of 50.97%. The net profit during year under review increased from Rs. 145.66 Crores to Rs. 264.72 Crores, registering a significant growth of 81.48%.

The increased bottom line translated into improved earnings per share from Rs. 38.95 in 2014-15 to Rs. 67.04 in 2015- 16 on a consolidated basis. The debt equity ratio has reduce from 0.21 to 0.10.

The Company could achieve such a remarkable growth and performance due to tighter operating controls, prudent raw material sourcing, new customer addition, increased capacity utilisation followed by expansion in bed-linen capacity, positioning in the mid-to-high end segment, make-to order approach, superior product mix and controlled overheads.

In March 2016, the Company launched three new lifestyle brands - Boutique Living, Revival and The Pure Collection in the US market, which will be launched next year in other markets.

The business operations, overview and outlook is dealt in detail in the Management Discussion and Analysis Report forming part of this Directors'' Report.

Awards/Recognitions

Your Company is:

1. 2nd largest manufacturer/exporter of Bed Linen from India;

2. amongst top 3 Bed sheets exporter to USA;

3. 11th largest supplier of Home Textiles to USA.

Our Company with 40% CAGR is ranked 4th amongst list of top 20 Multi Baggers during the last 10 years. (Source: Business Line issue dated 11.1.2016).

During the year under review, the Company has received Silver Trophy from TEXPROCIL for the 2nd highest exports of made ups in "Bed Linen/Bedsheets/Quilts" under the Category - III for the year 2014-15.

FIEO, Western Region has conferred on the Company, the Prestigious "Export Excellence Award in the Top Exporter - Non AASME -Trading House Category".

The Company and Indo Count Foundation have received Momentos for its important contribution towards CSR from Education Department, Zilla Parishad, Kolhapur and from Kagal Nagar Parishad, Kolhapur. Government of Maharashtra, Directorate of Primary Education has also recognized Indo Count Foundation for the Social work in primary education.

Our Company has been ranked amongst India''s top 500 companies during 2015-16 by Dun & Bradstreet. The ranking has improved from 386 to 353 on the basis of revenue.

AASCI (NYSE) has recognized and included shares of the company as one of the constituents of MSCI (NYSE) for the MSCI India Domestic Small Cap fund.

Dividend

During the year 2015-2016, the Board of Directors of the Company declared and paid interim dividend (2)10% (Rs. 1/- per equity share of Rs. 10/- each). Further, your Directors are pleased to recommend final dividend (2)10% (Rs. 1/- per equity share of Rs. 10/- each) for the approval of shareholders at the ensuing Annual General Meeting. If approved, the total dividend payout for the year under review will be 20% amounting to Rs. 7.90 Crores.

Share Capital

During the year under review, the Company redeemed 25,00,000, 4% Non-Convertible Cumulative Redeemable Preference Shares of Rs. 10/- each aggregating to Rs. 2.50 Crores. Consequently, the issued, subscribed and paid up share capital of the Company is reduced from Rs. 41.98 Crores to Rs. 39.48 Crores. There was no change in equity share capital of the Company during the year 2015-16.

Credit Rating

CARE and ICRA have assigned credit rating of "A" for Company''s Long Term Bank Facilities indicating adequate degree of safety regarding timely servicing of financial obligations. For Company''s short term bank facilities, CARE and ICRA have pronounced rating of "A1" which is the highest rating indicating very strong degree of safety regarding timely payment of financial obligations.

Debentures

During the year under review, the Company redeemed 300 Non-Convertible Redeemable Debentures of face value of Rs. 10,00,000/- each aggregating to Rs. 30 Crores. The said debentures were allotted on private placement basis in the year 2007.

Directors and Key Managerial Personnel

Pursuant to the recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company approved the appointment of Mr. Mohit Anilkumar Jain (DIN: 01473966) as an Additional Director and Managing Director of the Company for a period of 5 years with effect from 9th May, 2016, as part of a long term succession plan. The resolution for his appointment is also being placed for approval of members of the Company at the ensuing Annua General Meeting. Further, Mr. Anil Kumar Jain, Chairman and Managing Director, continues to be an Executive Chairman of the Company w.e.f. 9th May, 2016.

Mr. R. N. Gupta, Joint Managing Director was associated with the Company from the year 1996 and has played a vital role in the growth of the Company. However, owing to his advanced age, he expressed to the Board that he shall not be in a position to devote his full time to manage the affairs of the Company and hence resigned from the position of Director designated as "Joint Managing Director" of the Company w.e.f. 9th May, 2016. The Board placed its appreciation for valuable contributions made by him during his long association as a Board Member with the Company.

Pursuant to the provisions of Section 152 of Companies Act 2013, Mr. Kamal Mitra, Director (Works) of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for the re-appointment. The Board recommends his re-appointment.

Pursuant to the recommendation of Nomination and Remuneration Committee, the Board of Directors at its meeting held on 8th June, 2016 approved the re-appointment of Mr. Ani Kumar Jain as a Whole-Time Director designated as "Executive Chairman", Mr. Kailash R. Lalpuria as a Whole-Time Director designated as "Executive Director" and Mr. Kamal Mitra as a Whole-Time Director designated as "Director (Works)" for a period of 3 years w.e.f. 1st October, 2016 subject to the approva of members of the Company. The resolutions for their respective re-appointment are also placed for approval of members of the Company at the ensuing Annual General Meeting.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013 and Regulation 16(1) (b) of Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015.CSEBI (LODR) Regulations, 2015'').

As required under the provisions of SEBI (LODR) Regulations, 2015 and the Companies Act, 2013, brief profile and other details of Directors being appointed /re-appointed are provided in the Notice of Annual General Meeting.

During the year under review, Mr. R. Sundaram, holding dua positions of Chief Financial Officer and Company Secretary of the Company decided to concentrate on the role of Chief Financial Officer and relinquished the position of the Company Secretary and Compliance Officer of the Company with effect from 9th February, 2016. Mr. R. Sundaram, continues to remain Chief Financial Officer of the Company. Mrs. Amruta Avasare was appointed as Company Secretary and Compliance Officer of the Company w.e.f 9th February, 2016.

Directors'' Responsibility Statement

In terms of Section 134(3)(c) of the Companies Act, 2013, your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, state that:

1. 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, if any;

2. such accounting policies as mentioned in the notes to the Financial Statements for the year ended 31st March, 2016 have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit of the Company for the year ended on that date;

3. 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;

4. the annual financial statements for the year ended 31st March, 2016 have been prepared on a going concern basis;

5. internal financial controls to be followed by the Company have been laid down and that the said financial controls were adequate and were operating effectively;

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

Number of Board Meetings

During the year under review, 5 Board Meetings were held viz on 9th May, 2015, 30th June, 2015, 3rd August, 2015, 24th October, 2015 and 8th February, 2016, the details of which are given in the Corporate Governance Report.

Audit Committee

As on 31st March, 2016, the Audit Committee comprises of Mr. P. N. Shah (Chairman), Mr. R. Anand, Mr. Prem Malik and Mr. R. N. Gupta. W.e.f. 9th May, 2016, the Committee has been re-constituted and comprises of Mr. P. N. Shah (Chairman), Mr. R. Anand, Mr. Prem Malik and Mr. Kailash R. Lalpuria. All the recommendations made by the Audit Committee were accepted by the Board.

Statutory Auditors

At the Annual General Meeting of the Company held on 23rc August, 2014, M/s. B K Shroff & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company for a period of 3 years to hold office from the conclusion of the 25th Annua General Meeting till the conclusion of the 28th Annual Genera Meeting of the Company, subject to ratification by the members at each Annual General Meeting.

The Audit Committee and the Board of Directors of the Company have recommended to the members of the Company, ratification of appointment of M/s. B K Shroff & Co., Chartered Accountants, as Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual Genera Meeting till the conclusion of the 28th Annual General Meeting of the Company. The Company has received a letter from B. K. Shroff & Co. confirming that they are eligible for ratification of their appointment.

Auditors'' Report

The Auditors'' Report on standalone and consolidated financia statements forms part of the Annual Report. The Auditors'' Report does not contain any qualifications, reservations, adverse remarks, disclaimer or emphasis of matter. Notes to the Financial Statements are self-explanatory and do not call for any further comments.

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 re-enactment for the time being in force).

Internal Audit

M/s. Suresh Kumar Mittal & Co., Chartered Accountants are Internal Auditors of the Company and their report is reviewed by the Audit Committee from time to time.

Consolidated Financial Statements & Subsidiaries

In accordance with the provisions of Companies Act, 2013 ("the Act"), SEBI (LODR) Regulations, 2015 and Accounting Standard (AS) - 21 on Consolidated Financial Statements, the audited consolidated financial statements form part of the Annual Report. In view of this, the Balance Sheet, Statement of Profit and Loss and other related documents of the subsidiaries are not attached in this Annual Report. A copy of Audited Financial Statements of the Subsidiaries shall be made available for inspection at the Registered Office of the Company during business hours. Any shareholder interested in obtaining a copy of separate Financial Statements of the subsidiaries shall make specific request in writing to the Company Secretary. The Audited Financial Statements of the subsidiaries are also available on the website of the Company www.indocount.com.

As on 31st March, 2016, the Company has 4 subsidiaries. The Company does not have any Associate Company pursuant to the provisions of the Companies Act, 2013.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, the salient features of financial position of each subsidiary is given in Form AOC-1 annexed as "Annexure 1" to this Report.

The Company has framed a policy for determining material subsidiaries, which can be accessed at http://www.indocount. com/images/investor/IC IL-Pol icy-on-Ma terial-Subsidiaries.pdf.

Corporate Social Responsibility (CSR)

The key philosophy of all our CSR initiatives is guided by our belief "Every Smile Counts ...". Pursuant to the provisions of Section 135 of the Companies Act, 2013, the Company has constituted a CSR Committee. Dr. (Mrs.) Vaijayanti Pandit is the Chairperson of the Committee, Mr. Anil Kumar Jain and Mr. Kailash R. Lalpuria are other members of the Committee.

The adopted CSR Policy outlines various areas like education, healthcare, water and sanitation, environment and women empowerment for undertaking CSR activities. The Company implements the CSR initiatives through ''Indo Count Foundation'', and has also tied up with other trusts for implementing CSR Activities. During the year under review, Company / Indo Count Foundation has contributed to Prime Minister Relief Fund and carried out CSR activities in the areas of Education and Healthcare.

A CSR Policy of the Company is uploaded on website of the Company and can be accessed at http://www.indocount.com/ images/investor/ICII -CSR-Policy.pdf. The Report on CSR activities is provided in "Annexure 2" to this Report.

Extract of Annual Return

Pursuant to Section 92 (3) of the Companies Act, 2013, extract of the Annual Return of the Company in Form MGT-9 is annexed as "Annexure 3" to this Report.

Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed S. Anantha Rama Subramanian, Proprietor of S. Anantha & Co., Practising Company Secretaries to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report issued by him is annexed as "Annexure 4" to this Report. The Secretaria Audit Report does not contain any qualification, reservation, disclaimer or adverse remark.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the financia year under review, as stipulated under Regulation 34 of SEB (LODR) Regulations, 2015 is presented in a separate section forming part of the Annual Report.

Corporate Governance

In terms of Regulation 34 of SEBI (LODR) Regulations, 2015, a report on Corporate Governance along with Statutory Auditors'' Certificate confirming its compliance is provided separately and forms integral part of this Report.

Related Party Transactions

All related party transactions entered during the financial year under review were on an arm''s length basis and in the ordinary course of business. Note No. 32 to the Financial Statements contains details of Related Party Transactions. No related party transaction was in conflict with the interest of the Company. As prescribed by Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of contracts/arrangements with Related Parties are given in Form AOC-2, annexed as "Annexure 5" to this Report. The policy on Related Party Transactions has been uploaded on the Company''s website and can be accessed at http://www.indocount.com/ images/investor/IC IL- Pol icy- on -Related -Pa rty-Transactions.pdf

Conservation of Energy, Technology Absorption & Foreign Exchange Earning & Outgo

Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in "Annexure 6" forming part of this Report.

Particulars of Employees and related disclosures

Pursuant to the provisions of Section 197 (12) of the Companies Act, 2013 ("Act") read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended 31st March, 2016, none of the employees of the Company except Mr. Anil Kumar Jain, Chairman and Managing Director draws remuneration in excess of the limits set out in the said rules. The details required as per said rules and the Disclosure pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in "Annexure 7" to this Report.

Segment

The Company operates only in one segment i.e Textile Segment.

Capacity Expansion

The Board of Directors of the Company at its meeting held on 24th October, 2015 approved capex ofRs. 175 Crores for Phase I towards:

i) Increasing processing capacity from current 68 million meters to 90 million meters

ii) Setting up a water effluent treatment / RO plant

iii) Automation of cut and sew and warehousing

As on 31st March 2016, amount capitalized was Rs. 110 Crores. The balance capitalization for enhancing its Processing capacity from 68mn meters to 90mn meters is progressing as per schedule and to be completed by Q3FY17.

At the Board meeting held on 7th May, 2016, the Board approved the capital expenditure plan under Phase 2 for approximately Rs. 300 Crores. This capital outlay will be funded by internal accruals and debt. The Capital expenditure will be for upgrading the existing Spinning Facilities, Investments in additional Weaving (with specialized looms) and value added equipments for delivery of fashion and utility bedding. This expansion will be completed by March, 2018.

Vigil Mechanism / Whistle Blower Policy

Pursuant to the provisions of Section 177 (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has established a vigil mechanism. The details of Vigil Mechanism are provided in the Corporate Governance Report. The Vigil Mechanism / Whistle Blower Policy may be accessed on the Company''s website at www.indocount.com.

Company''s Policy on Appointment and Remuneration of Directors

The Company has been following well laid down policy on appointment and remuneration of Directors, Key Manageria Personnel (KMP) and Senior Management Personnel.

The appointment of Directors is made by the Board pursuant to the recommendation of Nomination and Remuneration Committee (NRC).

The remuneration of Executive Directors comprises of Basic Salary, Perquisites & Allowances, Commission. The remuneration is within the limits prescribed under the Companies Act, 2013 and is recommended by NRC. Approval of Board, Shareholders and the Central Government, if required, for payment of remuneration to Executive Directors is sought, from time to time.

The remuneration of Non-Executive Directors comprises of sitting fees and commission in accordance with the provisions of Companies Act, 2013.

A brief extract of the Remuneration Policy on appointment and remuneration of Directors, KMP and Senior Management is provided in the Corporate Governance Report.

Performance Evaluation of Directors

Criteria of performance evaluation of the Board of Directors including Independent Directors are laid down by Nomination and Remuneration Committee of the Company. Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of the entire Board, Committees and all the Directors based on the parameters specified in the Corporate Governance Report. The parameters of performance evaluation were circulated to the Directors in the form of questionnaire.

Business Responsibility Report

Pursuant to the Regulation 34 of SEBI (LODR) Regulations, 2015, Business Responsibility Report is mandatory to be published for top 500 companies based on market capitalisation as on 31st March, 2016. Accordingly, Business Responsibility Report for the year ended 31st March 2016 is provided in Annexure 8'' to this Report.

Obligation of Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

In order to prevent sexual harassment of women at workplace, the Company has adopted a policy for prevention of Sexua Harassment of Women at workplace and has set up an Interna Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to look into complaints relating to sexual harassment at workplace of any woman employee. During the year under review, the Company has not received any complaint under the said policy.

Particulars of Loans given, Investments made, Guarantees given and Securities provided under Section 186 of the Companies Act, 2013

The Company has not granted any loan during the year under review. The details of investment made are provided in Note No. 14 to the Standalone Financial Statements. The Company has given Corporate Guarantee to the extent of US $ 9.5 million for securing financial assistance to Indo Count Global Inc. USA , wholly owned subsidiary of the Company.

Internal Financial Controls with respect to the Financial Statements

The Company maintains adequate internal control system and procedures commensurate with its size and nature of operations. The internal control systems are designed to provide a reasonable assurance over reliability in financial reporting, ensure appropriate authorisation of transactions, safeguarding the assets of the Company and prevent misuse/ losses and legal compliances.

The internal control system includes a well defined delegation of authority and a comprehensive Management Information System coupled with quarterly reviews of operational and financia performance, a well structured budgeting process with regular monitoring of expenses and Internal audit.

The Internal Audit reports are periodically reviewed by the management and the Audit Committee and necessary improvements are undertaken, if required.

Risk Management

The Company has in place Risk Management System which takes care of risk identification, assessment and mitigation. There are no risks which in the opinion of the Board threaten the existence of the Company. Risk factors and its mitigation are covered extensively in the Management Discussion and Analysis Report forming part of this Directors'' Report.

Deposits

During the year under review, no deposits were accepted by the Company under Chapter V of the Companies Act, 2013.

Significant or Material orders passed by the Regulators/Courts

During the year under review, 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.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review or said items are not applicable to the Company:

1. Cost Audit

2. Issue of equity shares with differential rights as to dividend, voting or otherwise or issue of sweat equity share.

3. Mr. Anil Kumar Jain & Mr. Kamal Mitra who are Non- Executive Directors on the Board of Pranavaditya Spinning Mills Ltd., subsidiary of the Company, receive sitting fees for attending Board / Committee Meeting. Apart from the sitting fees, as aforesaid, none of the Whole-Time Directors of the Company receive any remuneration or commission from any subsidiaries of the Company.

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2015-16 and the date of this report.

Acknowledgements

Our consistent growth has been made possible due to our culture of professionalism, integrity and continuous evolvement.

Your Directors take this opportunity to thank our customers, suppliers, investors, bankers, the Central and State Governments, for their consistent support and co-operation to the Company. We place on record our appreciation of the contribution made by employees at all levels, without whose whole-hearted efforts, the overall performance would not have been possible.

Your Directors look forward to the long term future with confidence.

On behalf of the Board of Directors

ANIL KUMAR JAIN

Date: 8th June, 2016 Executive Chairman

Place: Mumbai DIN: 00086106


Mar 31, 2015

Dear Members

The Directors have pleasure in presenting the 26th annual report on the business and operations of your Company together with the audited financial statements and the Auditor Report for the financial year ended March 31, 2015.

(Rs. In Crores, except EPS)

Standalone Consolidated

Financial Results 2014-15 2013-14 2014-15 2013-14

Revenue 1679.95 1440.49 1781.80 1497.90

EBIDTA 301.28 179.87 313.66 189.10

Less : Interest 62.54 48.97 65.02 49.89

Less : Depreciation 15.40 18.83 15.97 19.56

Less: Exceptional Item 25.74 - 25.74 -

Profit before Tax 197.60 112.07 206.93 119.65

Provision for Tax 58.56 7.12 61.05 9.26

Net Profit 139.04 104.93 145.88 110.39

EPS (Rs. ) 37.18 29.54 38.95 30.96

EPS* (Rs. ) 41.12 29.54 42.89 30.96

Cash Profit 171.65 108.46 179.02 114.87

* Excluding Exceptional Item

Net Profit for the year 139.04 104.93 145.88 110.39

Add: Balance in Profit & Loss 106.70 1.88 108.77 0.72 Account

Sub-total 245.74 106.82 254.65 111.11

Less: Adjustment on account 0.88 - 0.91 - of depreciation

Less: Transferred to Traditional - - 4.22 1.80 Reserve

Less: Share of Profit transferred - - 0.22 0.43 to Minority Interen

Less: Preference Dividend 0.12 0.12 0.12 0.12 including Dividend Distribution Tax

Balance carried to Profit & Loss 244.74 106.70 249.18 108.76 Account

Operational and Financial Performance Overview

During the financial year under review, the Company achieved revenue of Rs. 1,679.95 Crores as against Rs. 1,440.49 Crores in the previous year, thereby registering a growth of 17%. EBIDTA during the above period grew from Rs. 179.87 Crores to Rs. 301.28 Crores, a growth of 67%. The net profit during the above period grew from Rs. 104.93 crores to Rs. 139.04 crores, a growth of 32%.

The Company could achieve this growth due to improved utilization of available resources and expanding the customer base. The Company's products such as Sheet Sets, Fashion Bedding, Institutional Bedding and Utility Bedding continue to be in demand in the international markets.

Indo Count Global Inc., has completed 3 years of operation. With the success in USA the Company has formed subsidiaries in United Kingdom and Australia. The Company is also taking steps to expand its footprint in other markets like Middle East and Europe.

Business Operations Overview and Outlook

The year 2014-15 was a period of relative stability. The Group generated significant part of the revenue from exports from developed economies. USA was relatively stable during the past year while the European economy was under continued stress and has started showing signs of revival.

The consumer spending in USA is expected to be stable during the current year. The large retail chain prefers vertically integrated players like your company, due to better product development capabilities and control over supply chain which consequently ensures higher service levels.

The Company is focused on maintaining growth and optimising its return on assets through leveraging distribution capabilities, enhanced utilisation of manufacturing capacities and cost optimisation measures. These measures will enhance the shareholders value in the coming years.

Keeping in line with the global standards and norms of manufacturing process, the company tries to ensure highest efficiency with negligible waste.

No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company.

Management's Discussion and Analysis Report

Management's Discussion and Analysis Report for the financial 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.

Corporate Governance

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance along with Auditor's Certificate confirming its compliance is annexed and forms integral part of this Report.

Awards/Recognitions

Company is:

1. the 3rd largest manufacturer/exporter of Bed Linen from India;

2. the 4th largest supplier of Bed Linen from across the globe into USA; and

3. the 13th largest supplier of Home Textiles across the globe into USA.

Company's rank improved from 581 to 454 by Revenue among the listed companies in India. (Source: "Business Standard Magazine" BS 1000 Annual Magazine 2014, for the financial year ended 31st March, 2013)

Company has also received Bronze Trophy from TEXPROCIL for the 3rd highest exporter of Bed Linen from India during the financial year 2013-14.

Company has won export excellence Award in the "TOP Exporter- Non MSME- Trading House" category from The Federation of Indian Export Organisations, Western Region.

Dividend

Your Directors intend to plough back available resources for financial requirements and have not recommend any dividend for the financial year.

Consolidated Financial Statement & Subsidiaries

In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated Financial Statements, the audited consolidated financial statement is provided in the Annual Report. As on March 31, 2015, the Company had 4 subsidiaries.

Pursuant to the first proviso to the first proviso to Section 129(3) of the Companies Act, 2013 and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, the salient features of the financial statements, performance and financial position of each subsidiary and a joint venture is given in Form AOC-1 as Annexure 1 to this Report.

The Company has framed a policy for determining material subsidiaries, which has been uploaded on the Company's website.

In accordance with the circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other related documents of the subsidiary Company are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the Subsidiary Companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the Subsidiary Companies will also be kept open for inspection at the Registered office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

Corporate Social Responsibility (CSR)

The key philosophy of all our CSR initiatives is guided by our belief "Every Smile Counts ..."

The Company has constituted CSR Committee. Dr. (Mrs.) Vaijayanti Pandit is the Chairperson of the Committee, Mr. Anil Kumar Jain and Mr. Kailash R. Lalpuria are other members of the Committee.

The adopted CSR Policy outlines various areas like education, livelihood, rural development projects, health, water and sanitation to be undertaken by the Company. The Company has formed a separate Trust, namely, 'Indo Count Foundation' for implementing the aforesaid initiatives.

The CSR Policy may be accessed on the Company's website.

The Company is focused on introducing various innovative measures as part of our corporate social responsibility and the directors are confident that these measures will reduce malnutrition, promote gender equality, and improve education and health care among the various sections of our society.

The Annual Report on CSR activities is annexed as annexure 2.

Related Party Transactions

All related party transactions entered into during the financial year were on an arm's length basis and in the ordinary course of business. Note 33 to the financial statement sets out related party disclosure. No related party transaction was in conflict with the interest of the Company. Material related party transactions were entered into by the Company only with its subsidiaries. No materially significant related party transaction was made by the Company with the Key Managerial Personnel. As prescribed by Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of related party transactions are given in Form AOC-2, as annexure 3 to this Report. The policy on Related Party Transactions as approved by the Board has been uploaded on the Company's website.

Conservation of energy, Technology absorption & foreign exchange earning & outgo

Information required under Section 134(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in "annexure 4" forming part of this Report.

Particulars of Employees

Particulars of employees required to be furnished pursuant to the provisions of Section 197 of the Companies Act, 2013 (ACT), read with Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given as an Annexure to this Report. However,pursuant to the provisions of Section 136 of the Act, the Report and Accounts are being sent to all the Members excluding the aforesaid Annexure. Members, who are interested in the information, may write to the Company Secretary at the registered office of the Company.

The statement of particulars of appointment and remuneration of managerial personnel pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel Rules, 2014 are given in Annexure 5 to this Report.

Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed C V Kulkarni & Co., (CP No. 2792, FCS: 3342),Company Secretaries to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report is annexed herewith as Annexure 6. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Extract of Annual Return

Extract of the Annual Return of the Company in form MGT 9 is annexed herewith as Annexure 7 to this Report.

Segment

The Company is engaged in the manufacture and export of cotton yarn & made ups, which are governed by the same set of risks and returns and as such are in the same segment. Other segment is Consumer Durable Goods Division.

The Segment reporting has been presented as per Accounting Standard (AS) - 17.

CDR Exit

The Company has exceeded the prescribed performance and growth parameters under the CDR Mechanism and exited the CDR mechanism 4 years ahead of scheduled exit and paid recompense amount of Rs. 25.74 Crore. The CDR exit will provide the Company better working and other opportunities in the immediate near future.

Capacity Expansion

During the year, your Company was operating at optimum capacity levels and the need was felt to augment capacities to cater growing customer needs. Your Company undertook expansion of capacity from 45 Million meters per annum to 68 million meters per annum, enhancement of almost 50%. The additional capacities are commercially available from FY 15-16 and the results would start getting reflected in FY 15-16 financials.

The additional capacities apart from providing growth to the top line will also contribute to the bottom line with Operating Leverage effect.

Equity Share Capital

During the year under review, the Company issued 11,00,000 Equity Shares, against funds infused by the promoters, in compliance with the terms of CDR Scheme. Further, 28,98,300 Equity Shares were issued to the promoters pursuant to exercise of conversion option on the outstanding Optionally Fully Convertible Warrants (OFCW). The paid up equity share capital of the Company as on 31st March, 2015 was Rs. 39.48 Crores.

Directors

In accordance with the provisions of Section 152 of Companies the Act 2013, Mr. Kailash R. Lalpuria (DIN: 00059758) Director of the Company, who retires by rotation at the ensuing Annual General Meeting, being eligible, has offered himself for re-appointment.

At the 25th Annual General Meeting of the company held on 23rd August, 2014 the company had appointed the existing independent directors Mr. P. N. Shah (DIN: 00096793), Mr. R. Anand (DIN: 00040325), Mr. Prem Malik (DIN: 00023051), Mr. Sushil Kumar Jiwarajka (DIN: 00016680), Mr. Dilip Thakkar (DIN: 00007339) and Dr. (Mrs.) Vaijayanti Pandit (DIN: 06742237), as independent directors under the companies Act, 2013 for 5 consecutive years for a term upto the conclusion of the 30th Annual General Meeting.

Further, in terms of Section 149 (10) & (13), the Independent Directors of the Company would not be liable to retire by rotation.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.

Vigil Mechanism / Whistle Blower Policy

The Company has a vigil mechanism to deal with instance of fraud and mismanagement, if any. The details of vigil mechanism are explained in the Corporate Governance Report. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website.

Board Evaluation

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

Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

Internal Audit

M/s. Suresh Kumar Mittal & Co., Chartered Accountants performs the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time.

Obligation of Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

In order to prevent sexual harassment of women at work place a new act 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 work place of any women employee.

Company has adopted a policy for prevention of Sexual Harassment at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint.

Meetings

During the year 4 Board Meetings, 1 independent directors' meeting and 4 Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Particulars of Loans given, Investments made, Guarantees given and Securities provided

Particulars of loans given, investments made, guarantees given and securities are provided in the standalone financial statement (Please refer to Note 33 to the standalone financial statement).

Directors' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a. that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies have been selected and applied consistently and judgement and estimates have been made 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, 2015 and of the profit of the Company for the year ended on that date;

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

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

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

Internal control systems and their adequacy

The Company maintains adequate internal control system and procedures commensurate with its size and nature of operations. The internal control systems are designed to provide a reasonable assurance over reliability in financial reporting, ensure appropriate authorisation of transactions, safe guarding the assets of the Company and prevent misuse/ losses and legal compliances.

The internal control system includes a well defined delegation of authority and a comprehensive Management Information System coupled with quarterly reviews of operational and financial performance, a well structured budgeting process with regular monitoring of expenses and Internal audit.

The Internal Audit reports are periodically reviewed by the management and the Audit Committee and necessary improvements undertaken, as may be required.

Human Resources

Human resources are invaluable assets of this Company. Company received 2nd rank for executing best Human Resources practices for large scale categories in and around Pune Region. The Human Resource function strives to make the Company an employer of choice by attracting, retaining and developing sustainable talent in the organization.

Your Company has always provided a congenial atmosphere for work to its employees. Your Company is an equal opportunity employer and offers opportunities to all without regard to their caste, religion, colour, marital status and sex.

Development of employee skills and imparting knowledge is a top- most priority of the Company. The Company regularly conducts various training programs, which are very important to the business.

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.

Auditors

M/s. B K Shroff & Co., Chartered Accountants, have been appointed as Auditor of the Company for a period of 3 years to hold office from the conclusion of the 25th Annual General Meeting to the conclusion of the 28th Annual General Meeting of the Company, subject to ratification by the members at each Annual General Meeting.

The Audit Committee and the Board of Directors have recommended to the members of the Company, ratification of appointment of M/s. B K Shroff & Co., Chartered Accountants, as Auditor to hold office from the conclusion of the ensuing Annual General Meeting to the conclusion of the 27th Annual General Meeting of the Company.

Auditors' Report

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

General

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

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

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

3. Mr. Anil Kumar Jain & Mr. Kamal Mitra who are Non-Executive Directors on the Board of Pranavaditya Spinning Mills Ltd., subsidiary of the Company, receive sitting fees. Apart from the sitting fees, as aforesaid, neither the Managing Director nor any of the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

4. 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.

Acknowledgements

Our consistent growth has been made possible because of our culture of professionalism, integrity and continuous evolvement.

Your Directors take this opportunity to thank our customers, suppliers, investors, bankers, the Central and State Governments, for their consistent support and co-operation to the Company. We place on record our appreciation of the contribution made by employees at all levels, without whose whole-hearted efforts, the overall performance would not have been possible.

Your Directors look forward to the long term future with confidence.

On behalf of the Board of Directors

ANIL KUMAR JAIN Mumbai, 30th June, 2015 Chairman & Managing Director


Mar 31, 2014

Dear Members,

The Directors are pleased to present the annual report, together with the audited financial statements and auditors’ report for the financial year ended 31st March 2014. (Rs In Crores, except EPS) FINANCIAL RESULTS Standalone Consolidated 2013-14 2012-13 2013-14 2012-13 Revenue 1,440.49 1,169.73 1,497.91 1,217.10 EBIDTA 179.87 114.07 189.10 120.05 Less : Interest 48.97 49.62 49.89 49.80 Less : Depreciation 18.83 17.75 19.56 18.48 Less: Exceptional Item - 15.69 - 15.69 Profit before Tax 112.07 31.01 119.65 36.08 Provision for Tax 7.13 3.90 9.26 6.57 Net Profit 104.94 27.11 110.39 29.51 Cash Profit 108.46 44.00 114.87 48.43 Earning Per Share (Rs) 29.54 7.61 30.96 8.23

Dividend

The Directors intend to plough back available resources for financial requirements and express their inability to recommend any dividend for the financial year.

Management Discussion and Analysis

Report on MDA is given as Annexure B forming part of this Report.

Business Operations Overview and Outlook

The fiscal year ''14 was a period of relative stability. The Group generated significant part of the revenue from exports from developed economies and hence the results are affected by the state of these economies. USA was stable during the past year while the European economies were under continued stress and have started showing signs of revival.

Under these economic conditions, the consolidated revenues grew by 23.1% to Rs 1,497.91 crores, EBIDTA grew by 57.5% to Rs 189.10 crores and the net profit grew by 274.1% to Rs 110.39 crores.

The consumer spending in USA is expected to be stable during the current year. The large retail chains prefer vertically integrated players like your company, due to better product development capabilities and control over supply chains which consequently ensures higher service levels. The Group has a strong in-house capabilities to manage product development and manufacturing.

The Group is focussed on maintaining growth and optimising its return on assets through leveraging distribution capabilities, enhanced utilisation of manufacturing capacities and cost optimisation measures. Your directors are confident that these measures will enhance the shareholders value in the coming years.

Our initiatives have included the successful roll out of SAP ERP across all manufacturing facilities. The result of these measures have significantly enhanced integration between operational and financial verticals. We are in the process of extending SAP ERP to distribution centres across the globe.

Apart from business, we dare to commit to our people who are our living assets. The Group is focussed on introducing various innovative measures as part of our corporate social responsibility and the directors are confident that these measures will reduce malnutrition, promote gender equality, improve education and health care among the various sections of our society.

Keeping in-line with the global standards and norms of manufacturing process, the company ensures highest efficiency with negligible waste.

Awards/Recognition

Your Directors are privileged to share that your Company is: 1. the 3rd largest manufacturer/exporter of bed sheets from India; 2. the 4th largest supplier of bed sheets from across the globe to USA; and 3. the 14th largest supplier of Home Textiles across the globe to USA.

Your Company ranked 454th (FY 2011-12, 581) by Revenue among the listed companies in India. (Source: Business Standard Magazine" BS 1000 Annual Magazine 2014, for the financial year ended 31st March, 2013).

Your Company has received Trophy from TEXPROCIL for the 3rd highest exporter of Bed Sheets from India for the financial year 2012-13.

Segment

The Company is engaged in the manufacture and export of cotton yarn, grey knitted fabrics and made ups, which are governed by the same set of risks and returns and as such are in the same segment.

The performance of the Consumer Durable Goods Division is reported as a separate segment.

Segment reporting as per AS 17 has been complied with.

Offer for Sale of equity shares held by the Company in its subsidiary viz. Pranavaditya Spinning Mills Limited

In terms of the amendments to the provision of Rule 19(2)(b) of the Securities Contract (Regulations) Rules, 1957 notified by the Ministry of Finance, the threshold limit for non-promoter public shareholding for all listed companies was raised from 10% to 25%.

The said amendment was also applicable to the existing listed companies having less than 25% public shareholding. To comply with this Minimum Public Shareholding requirement, the Company on 12th September, 2013, as the Promoter of Pranavaditya Spinning Mills Limited (PSML) made an Offer for Sale of 37,00,000 equity shares of Rs 10/- each held by it in PSML(OFS). With the said OFS, the Company''s shareholding in PSML came down to 74.53% from 93.76%.

New Companies Act, 2013

The Companies Act, 2013 which replaces more than five decades old Companies Act, 1956 was passed by the Parliament.

The main objective of the 2013 Act is lesser Government approvals and enhanced self-regulation. The emphasis is on corporate democracy. This should lead to improved compliance and accountability from the corporate sector and will provide further transparency in the disclosures. Your Company has a strong compliance and governance mechanism in place.

Directors

In accordance with provisions of Section 152 of Companies Act, 2013, Mr. R. N. Gupta, Jt. Managing Director, Mr. K. R. Lalpuria and Mr. Kamal Mitra retire by rotation and being eligible, offer themselves for reappointment.

Further, in terms of Section 149 (10) & (13), the Independent Directors of the Company would not be liable to retire by rotation.

In view of the new provisions introduced by the Companies Act, 2013, your Directors seek appointment of Mr. P. N. Shah, Mr. R. Anand, Mr. Sushil Kumar Jiwarajka, Mr. Dilip Thakkar, Mr. Prem Malik and Dr. (Mrs.) Vaijayanti Pandit as Independent Directors for 5 consecutive years, for a term up to 15th August, 2019.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed that :

i. in the preparation of the annual accounts for the financial year ended on 31st March 2014, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

ii. 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 2014 and of profit of the Company for the year ended on that date;

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

iv. the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

Corporate Social Responsibility

During the year, your directors have constituted the Corporate Social Responsibility Committee (CSR Committee). The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.

The Company is exploring various CSR initiatives that may be pursued.

Accounts

The Company has recognized in its books of account Deferred Tax Asset arising on account of tax effects of timing differences between the income tax and book depreciation. Your Directors expect that adequate profits will accrue in the future years from Company''s business which will utilize the tax asset fully.

Internal control systems and their adequacy

The Company has in place an elaborate internal control system to ensure proper authorization and accounting of transactions as also for safeguarding and protecting Company''s assets against loss. The internal auditors reports are periodically reviewed by the management and the Audit Committee and necessary corrective actions are taken from time to time.

Human Resources

The Human Resource function strives to make the Company an employer of choice with sustainable talent by attracting, retaining and developing talent in the organization.

Your Company has always provided a congenial atmosphere for work to its employees. Your Company is an equal opportunity employer and offers opportunities to all without regard to their caste, religion, colour, marital status and sex.

Development of employee skills and imparting knowledge is a top-most priority of the Company. The Company regularly conducts various training programs, which are very important to the business.

Particulars of employees in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, are not given, as none of the employees qualify for such disclosure.

Corporate Governance

In compliance with the requirements of Clause 49 of the Listing Agreement entered into with the Stock Exchanges, a separate report on Corporate Governance along with Auditor''s Certificate confirming its compliance is annexed and forms integral part of this Report.

Auditors

The Auditors of the Company, M/s. B K Shroff & Co., Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and being eligible have sought appointment. The Auditor have confirmed that, they satisfy the criteria provided under Section 141 of the Companies Act, 2013 (''the Act'') and their re-appointment, if made, would be in compliance with the conditions prescribed under the Act.

The Audit Committee and the Board of Directors recommended the appointment of M/s. B K Shroff & Co., Chartered Accountants, as Auditor of the Company for a period of 3 years to hold office from the conclusion of the ensuing Annual General Meeting to the conclusion of the 28th Annual General Meeting of the Company, subject to ratification by the members at each Annual General Meeting.

Cost Auditor

As per the Section 233B of the Companies Act, 1956 and impending directions being issued by the Central Government under Section 148(1) of the Companies Act, 2103, subject to the approval of the Central Government, the Audit Committee has recommended and your Directors have appointed M/s A. G Anikhindi & Co., Cost Accountants, Kolhapur, being eligible and having sought re-appointment, as Cost Auditor of the Company, to conduct Cost Audit of the products manufactured by the Company.

Annual accounts of the Subsidiaries

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other related documents of the subsidiary Company are not being attached with the Balance Sheet of the Company. A statement containing brief financial details of the company''s subsidiaries for the year ended 31st March, 2014 is included in this Report.The Company will make available the Annual Accounts of the Subsidiary Companies and the related details, information to any member of the Company who may be interested in obtaining the same. The annual accounts of the Subsidiary Companies will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

Conservation of Energy, Technology Absorption & Foreign Exchange Earning & Outgo

Information 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 is given as Annexure “A” forming part of this Report.

Acknowledgements

Our consistent growth has been made possible because of our culture of professionalism, integrity and continuous evolvement. Your Directors take this opportunity to thank Central and State Government, customers, suppliers, investors, bankers for their consistent support and co-operation to the Company. We place on record our appreciation of the contribution made by employees at all levels, without whose whole-hearted efforts, the overall performance would not have been possible.

The Directors look forward to the long term future with confidence.

On behalf of Board of Directors Anil Kumar Jain Chairman & Managing Director Mumbai : 14th May, 2014


Mar 31, 2013

The Directors are pleased to present the TWENTY FOURTH ANNUAL REPORT together with the audited financial statements and auditors'' report for the financial year ended 31st March 2013.

(Rs.in Crore) Standalone Financial Results 2012-13 2011-12 Change

Revenue 1163.51 776.78 50%

EBIDTA 107.85 65.70 64%

Less : Interest 43.39 35.01

Cash Profit (before exceptional items) 64.46 30.69

Less : Depreciation 17.76 17.69

Profit before Tax (before exceptional items) 46.70 13.00 259%

Less: Exceptional Item 15.69 12.35

Provision for Taxation 3.90 0.53

Net Profit After Taxation 27.11 0.13

Consolidated Financial Results 2011-12 2011-12 Change

Revenue 1210.87 807.14 50%

EBIDTA 113.83 63.02 80%

Less : Interest 43.58 35.19

Cash Profit (before exceptional items) 70.85 27.83

Less : Depreciation 18.48 18.60

Profit before Tax (before exceptional items) 51.77 9.23 461%

Less: Exceptional Item 15.69 12.35

Provision for Taxation 6.75 (0.81)

Net Profit After Taxation 29.33 (2.31)

Dividend

Your Directors intend to plough back available resources for financial requirements and express their inability to recommend any dividend for the year under review.

Management Discussion and Analysis

Report on MDA is given in Annexure ''B'' forming part of this report.

Business Operations Overview and Outlook

In the year 2012 growth in the USA showed positive signs of improvement and provided a semblance of stability to the world economy. However, it is still not as improved as one would have desired it to be. Europe continued to remain sluggish.

The year also marked significant volatilities in foreign exchange rates. The rupee continued to be under pressure and has touched an all time low during the year.

Even under these difficult economic conditions, your company delivered a good performance with the group revenue increasing by 50% to Rs.1,210.87 crore and EBIDTA growing by 80% to m3.83 crore. The increase in EBIDTA was driven mainly by growth in sales, increased efficiency and continued optimization of the cost across the group.

Exceptional items in the standalone results include a loss of Rs.15.69 crore due to depreciation of rupee on the old forward contracts which has ceased to exist from October 2012.

Your company''s wholly owned subsidiary, Indo Count Global Inc, had completed first full year of operation. The revenue generated was US $ 18 million. Your company is confident that this channel of marketing will generate substantial revenue in the coming years by expanding the customer base.

Awards/Recognition

Your Directors are privileged to inform you that during the year under review the TEXPROCIL, an apex body in Textiles has conferred upon the Company:-

1) GOLD TROPHY for special achievement in cotton Madeups for their export performance during 2011-12

2) BRONZE TROPHY for Third Highest top exporter award in cotton Madeups (Bed Linen/Bed Sheets/Quilts) for their export performance during 2011-12.

Your company also received Third Award in Large Scale Industry Textile Category for the export performance from The Government of Maharashtra.

Segment

The Company is engaged in the manufacture and export of cotton yarn, grey knitted fabrics and made ups, which are governed by the same set of risks and returns and as such are in the same segment.

The performance of the Consumer Durable Goods Division is reported as a separate segment.

Segment reporting as per AS 17 has been complied with.

Accounts

Your Company has recognized in its books of account Deferred Tax Asset arising on account of tax effects of timing differences between the income tax and book depreciation. Your Directors expect that adequate profits will accrue in the future years from Company''s business which will utilize the tax asset fully.

Internal control systems and their adequacy

Your Company has in place an elaborate internal control system to ensure proper authorization and accounting of transactions as also for safeguarding and protecting Company''s assets against loss. The internal auditors reports are periodically reviewed by the management and the Audit Committee and necessary corrective actions are taken from time to time.

Human Resources

During the year, labour relations continued to be cordial. Development of employee skills and imparting knowledge on social compliance audits, quality assurance are very important to the business, for which training is conducted regularly.

Particulars of employees in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, are not given, as none of the employees qualify for such disclosure.

Corporate Governance

The corporate governance report together with a certificate from the Company''s auditors confirming compliance of guidelines are made part of this Report as per clause 49 of the listing agreement entered into with the stock exchanges.

Directors'' Responsibility Statement

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

a) that in the preparation of the accounts for the financial year ended on 31st March 2013, the applicable accounting standards have been followed and there are no material departures.

b) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of profit of the Company for the year under review.

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

d) that the Directors have prepared the annual accounts ended on 31st March 2013 on a ''going concern'' basis.

Directors

In accordance with the provisions of the Companies Act, 1956, Mr. R. Anand, Mr. Sushil Kumar Jiwarajka. Mr. Dilip J Thakkar and Mr. Prem Malik retire by rotation and being eligible, offer themselves for reappointment.

During the year under review, Union Bank of India have changed their nomination by appointing Mr. R. Subramanian in place of Mr. Vijay Kumar Jain.

Auditors

M/s. B K Shroff and Co., Chartered Accountants retire at the end of this Annual General Meeting and are eligible for reappointment as auditors.

Cost Auditor

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, and subject to the approval of the Central Government, M/s A. G Anikhindi & Co., Cost Accountants, Kolhapur, have been appointed as Cost Auditor to conduct cost audit relating to the products manufactured by your Company.

Annual accounts of the Subsidiaries

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other related documents of the subsidiary Company are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the Subsidiary Companies and the related details, information to any member of the Company who may be interested in obtaining the same. The annual accounts of the Subsidiary Companies will also be kept open for inspection by the members at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

Conservation of Energy, Technology Absorption & Foreign Exchange Earning & Outgo

Statement required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure "A" forming part of this Report.

Acknowledgements

Your directors are grateful to the customers, suppliers, banks, financial institutions and employees for their co-operation and assistance during the year under review.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations may be ''forward-looking statements'' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Company''s operations include economic developments outside the country, global demand and supply conditions in the industry, input prices, changes in government regulations, tax laws and other factors such as litigation and industrial relations.

On behalf of Board of Directors

ANIL KUMAR JAIN

Chairman &

Mumbai: 24th May 2013 Managing Director


Mar 31, 2012

The Directors of your Company are pleased to present the 23rd Annual Report, with the statement of audited accounts for the financial year that ended 31st March 2012 :

Financial Results

(Rs. in Crore)

Particulars Current Year Previous Year

Total Income 776.78 689.74

Operating Profit (before exceptional item) 65.70 67.50

Less: Interest 35.01 30.54

Cash Profit before exceptional items 30.69 36.96

Less: Depreciation 17.68 17.64

Profit before Tax (before exceptional items) 13.01 14.72

Less: Derivative Loss 12.35 4.60

Provision for Taxation 0.53 5.69

Net Profit after Taxation 0.13 9.03

Balance Brought Forward (25.24) (34.29)

Deficit carried to Balance Sheet (25.11) (25.24)

Dividend

Your Directors intend to plough back available resources for financial requirements and express their inability to recommend any dividend for the year under review.

Management Discussion and Analysis

Report on MDA is given in Annexure B forming part of this report.

Operations

The financial year was a challenging one for the economy and especially for textile industry. Steep fluctuation in cotton prices and rupee depreciation has severely affected the revenue and margin. The above factors couple with derivative losses and lockout in spinning unit for 52 days has affected the spinning division revenue and margin. Due to integrated home textile unit your Company could withstand some of these pressures and achieve a decent growth in revenue and cash profit.

Overall during the year, with a strong focus on customer engagement, new products, customer specific solutions, cost control and effective resource management, your company continue to enhance value for its stakeholders. Your company has a strong focus on Customer, Cost and Cash. The Company could see a positive trend in the spinning industry during the last quarter of the financial year under review.

With available indications this positive trend should continue during the coming years. Substantial growth in Home Textile is planned.

The derivative contracts would cease to exist after October 2012. All these should result in generating decent growth and cash profit in the coming years. Your company will continue its need based investment plans and will focus on providing value added and efficient solutions to customers to support their growth plans.

Your company will strive to bring innovations to the core of everything it does to capture the growth opportunities. Company will continue to leverage its manufacturing facilities for the benefit of its customer and stay ahead of its competitors.

Awards/Recognition

Your Directors are glad to inform that the TEXPROCIL an apex body in Textiles has conferred upon the Company during the year BRONZE TROPHY award under the Made-ups category based on the performance of 2010-11. Your company has consistently receiving various awards from TEXPROCIL every year for the past 6 years.

Your company continues to be the third largest exporter of Made ups from India and has created a niche for itself in the international market. Your company is also the fourth largest supplier of Made ups into United States of America

Segment

The Company is engaged in the manufacture and export of cotton yarn, grey knitted fabrics and cotton made ups, which are governed by the same set of risks and returns and as such are in the same segment. The performance of the Consumer Durable Goods/Electronic Division is reported as a separate segment. Segment reporting as per AS 17 has been complied with.

Accounts

The Company has recognized in its books of account Deferred Tax Asset arising on account of tax effects of timing differences between the income tax and book depreciation. Your Directors expect that adequate profits will accrue in the future years from Company's business which will utilize the tax asset fully.

Internal control systems and their adequacy

The Company has in place an elaborate internal control system to ensure proper authorization and accounting of transactions as also for safeguarding and protecting Company's assets against loss. The internal auditor's reports are periodically reviewed by the management and Audit Committee and necessary corrective actions are taken from time to time.

Director's reply to the qualification by the auditors:

1) The Company has defaulted in repayment of dues to bank:

The Company has three business divisions. Spinning division incurred huge losses due to industry scenario, government policies and lockout for 52 days which were beyond the control of the management. The cash profits generated in the other two business divisions was not sufficient to fulfill the repayment commitments to all the lenders. CDR guided cash waterfall mechanism did not permit the repayment of the loans to some bankers for part of the year.

There is a positive change in the spinning business division during the last quarter of the financial year and management hopes to generate sufficient cash during the coming years which could fulfill repayment obligations to all lenders.

2) Excess payment of Remuneration to Executive Directors

Due to inadequate profits for the year under review, read with schedule XIII to the Companies Act, 1956, there is an excess remuneration aggregating Rs. 48.54 lacs paid to (a) Mr. Anil Kumar Jain, the Chairman and Managing Director, of Rs. 36.00 lacs for which the Company will seek Central Government approval and (b) Mr. Kailash R Lalpuria, the Executive Director, of Rs. 12.54 lacs, for which the Company will seek Shareholders 'approval, for waiver of excess payment.

3) Utilization of Short terms funds to Long term needs:

Losses in spinning division were beyond the control of the management. Being an integrated textile unit, the Company could generate Cash profit, before exceptional items, to the extent of Rs. 30.69 crores. However, major part of the cash profit was utilized to pay for the derivative losses of Rs. 12.35 crores. The resultant cash available was not sufficient to pay the all the term loan commitments. Repayments of loans were committed to term lenders as per CDR approved package and any default would have had a negative impact on the business of the company. Hence, considering the future business outlook and continued cooperation from the banks and term lenders the Company had no option but to utilize part of the short term resources to fulfill long term repayment commitment. With sufficient generation of cash expected in the coming years this excess amount will be brought back to short term uses.

4) Observation of Auditors on MTM losses:

The observations of Auditors on MTM losses on outstanding derivative contracts are suitably explained in the Notes on Accounts. It is pertinent to mention that these losses are notional until they crystallize on due dates. Your Directors feel that the Company can meet its obligations arising out of these contracts, which are purely hedges of its future receivables.

Human Resources

Spinning Plant at Gokulshirgaon declared a lock out in July 2011, due to some labor actions connected with renewal of the agreement. Negotiations resulted in lifting of the lock out after a period of 52 days. Apart from this, the labor relationship continued cordial for rest of the period. Home Textiles and Electronics units maintained a cordial labor relationship during the year.

Development of employee skills and imparting knowledge on social compliance audits, quality assurance are very important to the business, for which training is conducted regularly.

Particulars of employees in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, are not given, as none of the employees qualify for such disclosure.

Corporate Governance

The corporate governance report together with a certificate from the Company's auditors confirming compliance of guidelines are made part of this Report as per clause 49 of the listing agreement entered into with the stock exchanges.

Directors' Responsibility Statement

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

a) That in the preparation of the accounts for the financial year ended on 31s1 March 2012, the applicable accounting standards have been followed and there are no material departures.

b) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of profit of the Company for the year under review.

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

d) That the Directors have prepared the annual accounts ended on 31st March 2012 on a 'going concern' basis.

Directors

In accordance with the provisions of the Companies Act, 1956, Mr. R. N. Gupta, Mr. P. N. Shah, Mr. Kamal Mitraand Mr. Kailash R Lalpuria retire by rotation and being eligible, offer themselves for reappointment.

During the year under review, Export Import Bank of India and Union Bank of India have replaced their nomination by appointing Mr. Nadeem Panjetan and Mr. V. K. Jain respectively.

Auditors

M/s. B K Shroff and Co., Chartered Accountants, who are the Statutory Auditors of the Company, continue to hold office until the conclusion of this Annual General Meeting and offer themselves for reappointment. In terms of clause 41 (1 )h of the Listing Agreement, the statutory auditors of your Company are subjected to the Peer Review Process of the ICAI and hold a valid certificate issued by Peer Review Board of ICAI.

A certificate from the Auditors has been received to the effect that their reappointment, if made, would be within the limits prescribed under Section 224(1 B) of the companies Act, 1956.

Cost Auditor

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, and subject to the approval of the Central Government, M/s A. G Anikhindi & Co., Cost Accountants, Kolhapur, have been appointed as Cost Auditor to conduct cost audit relating to the products manufactured by your Company. The cost audit is under process and the Company will submit the Cost Auditors' report to the Central Government in time.

Company's Subsidiary

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other related documents of the subsidiary Company are not being attached with the

Balance Sheet of the Company. The Company will make available the Annual Accounts of the Subsidiary Companies and the related details, information to any member of the Company who may be interested in obtaining the same. The annual accounts of the Subsidiary Companies will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

Energy Conservation, Technology Absorption & Foreign Exchange Earning & Outgo

Information as required to be disclosed under section 217 (1) (e) of The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out as an Annexure "A" forming part of this Report.

Acknowledgements

The Board wishes to acknowledge and thank all stakeholders for their valuable sustained support and encouragement towards the conduct of the efficient operations of the Company. Your Board is particularly indebted to all Banks and Financial Institutions who have supported the Company at all times.

The Board wishes to place on record the support and cooperation rendered by all the departments by The Government of Maharashtra.

For and on behalf of the Board

ANIL KUMAR JAIN

Place : Mumbai Chairman &

Dated : 25th May 2012 Managing Director


Mar 31, 2011

The Members INDO COUNT INDUSTRIES LIMITED

The Directors have pleasure in presenting the TWENTY SECOND ANNUAL REPORT together with the Audited Financial Statement for the year ended 31st March 2011.

Financial Results

(Rs. in Crore)

Particulars 2010-11 2009-10 2010-11 2009-10 STAND ALONE CONSOLIDATED

Total Income 704.68 427.25 750.36 453.75

Gross Operating Profit 67.50 28.92 72.27 33.02 (before exceptional items)

Less: Interest 0.54 27.32 30.64 27.32

Profit before Depreciation, Taxation and Exceptional Item 36.96 1.60 41.63 5.70

Less : Depreciation 17.64 18.09 19.57 20.02

Cash Profit 32.36 (9.93) 37.03 (5.81)

Profit/(loss) Before Tax and Exceptional Item 19.32 (16.49) 22.06 (14.32)

Exceptional item - Exchange loss (4.60) (11.52) (4.60) (11.52)

Less : Provision for Taxation 5.68 9.40 (6.80) (9.30)

Net Profit/(loss) After Taxation 9.04 (18.61) 10.66 (16.54)

Share of Minority Interest — — (0.10) (0.12)

Balance Brought Forward (34.28) (15.67) (33.96) (17.30)

Deficit carried to Balance Sheet (25.24) (34.28) (23.40) (33.96)

Dividend

Company intend to plough back the profits towards margin for the Working Capital for future growth. Hence your Directors regret inability to recommend a dividend for the year.

PERFORMANCE REVIEW

Company as whole

During the year under review the Company has achieved a total income of Rs. 704.68 crore as against Rs. 427.25 crore on stand alone basis, thereby registering an impressive growth of around 65%.

Textile Division

During the year under review this division has achieved a sales turnover of Rs. 554.70 crore as against Rs. 349.24 crore during the previous year. Major part of this growth is attributed to Home Textile business.

Though the sales growth were encouraging, the sharp and unprecedented increase in the cost of Raw Material coupled with other input cost like power and labour have affected the margins.

The year also saw an improvement in the US economy, turnaround gave sigh of relief to the Indian Exporters.

The Spinning Division played a supporting role to the Home Textile Division.

The Government of Maharashtra has conferred First Award in Large Scale Industries (LSI) Textile Category for the Export Performance in the year 2009-10

With a view to multiply sales the Company has incorporated a Subsidiary Company namely INDO COUNT GLOBAL INC. in the United States of America, This will enable the Company to expand its clientele in USA, introduce its own Brand and improve the margin.

Consumer durable goods/Electronic Division

During the year under review the Consumer Durable Goods/ Electronic Divisions has also contributed for the growth of the Company.

Management Discussion and Analysis

Report on MDA is given in Annexure forming part of this report

Segment

The Company is engaged in the manufacture and export of cotton yarn, grey knitted fabrics and cotton made ups, which are governed by the same set of risks and returns and as such are in the same segment.

The performance of the Consumer Durable Goods/ Electronic Division is reported as a separate segment.

Segment reporting as per AS 17 has been complied with.

Accounts

The Company has recognized in its books of accounts Deferred Tax Asset arising on account of tax effects of timing differences between the income tax and book depreciation. Your Directors expect that adequate profits will accrue in the future years from Company's business which will utilize the tax asset fully.

Internal control systems and their adequacy

The Company has in place an elaborate internal control system to ensure proper authorization and accounting of transactions as also for safeguarding and protecting Company's assets against loss. The internal auditors reports are periodically reviewed by the management and the Audit Committee and necessary corrective actions are taken from time to time.

Human Resources

During the year, labour relations continued to be cordial.

Development of employee skills and imparting knowledge on social compliance audits, quality assurance are very important to the business, for which training is conducted regularly.

Particulars of employees in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, are not given, as none of the employees qualify for such disclosure.

Corporate Governance

The corporate governance report together with a certificate from the Company's auditors confirming compliance of guidelines are made part of this Report as per clause 49 of the Listing Agreement entered into with the stock exchanges.

Directors' Responsibility Statement

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

a) that in the preparation of the accounts for the financial year ended on 31st March 2011, the applicable accounting standards have been followed and there are no material departures.

b) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of Profit of the Company for the year under review.

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

d) that the Directors have prepared the annual accounts for the year ended on 31st March 2011 on a 'going concern' basis.

Company's Subsidiary

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary Company are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary Company and the related details information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary Company will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary Company.

Directors

In accordance with the provisions of the Companies Act, 1956, Mr. R Anand, Mr. Sushil Kumar Jiwarajka, Mr. Prem Malik and Mr. Dilip Thakkar retire by rotation and being eligible, offer themselves for reappointment.

Auditors

M/s. B K Shroff and Co., Chartered Accountants retire at the end of this Annual General Meeting and are eligible for reappointment as auditors.

The observations of Auditors on MTM losses on outstanding derivative contracts, as referred in Auditors' Report are suitably explained in the Notes on Accounts. It is pertinent to mention that these losses are notional until they are crystallized on due dates.

Your Directors feel that the Company can meet its obligations arising out of these contracts, which are purely hedged of its future receivables.

Cost Auditor

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, and subject to the approval of the Central Government, M/s A. G. Anikhindi & Co., Cost Accountants, Kolhapur, have been appointed as Cost Auditor to conduct cost audit relating to the products manufactured by your Company.

Conservation of Energy, Technology Absorption & Foreign Exchange Earning & Outgo

Statement required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure forming part of this Report.

Acknowledgements

Your Directors are grateful to the customers, suppliers, banks, financial institutions and employees for their co- operation and assistance during the year under review.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations may be 'forward-looking statements' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Company's operations include economic developments outside the country, global demand and supply conditions in the industry, input prices, changes in government regulations, tax laws and other factors such as litigation and industrial relations.

On behalf of Board of Directors

ANIL KUMAR JAIN Chairman & Managing Director

Place : Mumbai Dated : 17th May 2011

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