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Directors Report of Monte Carlo Fashions Ltd.

Mar 31, 2018

To The Members,

The Directors are pleased to present the Tenth (10^th) Annual Report of the Company along with the Audited Financial Results for the year ended March 31, 2018.

FINANCIAL SUMMARY

Financial Results for the year under review are summarized below: (Rs. In Lakhs)

Particulars	Financial Year	Financial Year
	ended on	ended on
	March 31, 2018	March 31, 2017
Revenue from operations	64,639.05	58,538.08
Other Income	1,768.01	2,393.19
Total Revenue	66,407.06	60,931.27
Profit before Tax	8,986.14	6,471.29
Tax Expenses/ Adjustment
1. Current Tax	3,075.54	2,211.29
2. Deferred Tax	(61.54)	(155.64)
Profit for the Year	5,972.14	4,415.64
Other Comprehensive Income / (Loss) (net of tax)	(52.08)	(128.18)
Total Comprehensive Income	5,920.06	4,287.46
Earnings Per Share (Rs.) - Basic & Diluted	27.48	20.32

Your Company has adopted Ind AS with effect from April 01, 2017, pursuant to a notification dated February 16, 2015, issued by the Ministry of Corporate Affairs, notifying the Companies (Indian Acounting Standard) Rules, 2015. The reconciliation and the effect of the transition as per GAAP vis-a-vis Ind AS has been provided in Note No. 39 of the Notes to the Accounts in the Financial Statements.

PERFORMANCE REVIEW

In the Financial Year 2017-18, Your Company registered a steady growth of around 11% in the revenue from operations that has been increased to Rs. 64,639.05 Lakhs from Rs. 58,538.08 Lakhs achieved last year. The Net Profit for the period has also risen sharply by about 35% to Rs. 5,972.14 Lakhs as compared to Rs. 4,415.64 Lakhs of the previous year. The other income of the Company for the said Financial Year stood at Rs. 1,768.01 Lakhs. Since during the year, there was no major capital expenditure, the Depreciation Expenses have reduced from year to year on proportionate basis. This year the expenditure on advertisement was Rs. 2,484.29 Lakhs as compared to Rs. 2,992.34 Lakhs incurred last year. However since the denominator i.e the top line has gone up, the overall percentage has been reduced. Also it is the endeavor of the company that it should be debt free. Therefore, no long term fresh debt has been raised and rather it has been reduced to Rs. 1,281.98 Lakhs after paying off the installments during the year.

Your Company being one of the leading branded apparel Company has successfully expanded its horizon by introducing new product ranges. It has created a comprehensive range of wool and cotton, cotton blended, knitted and woven apparels, and home furnishing through some of its ranges under umbrella brand name âMonte Carloâ such as Luxuria, Denim, Alpha, and Tweens etc. During the reporting period, the Company had also launched its Fitness and Fashion wear range in the name of âROCK ITâ. The basic idea behind it was to introduce garments having an ideal combination of fitness and fashion. Initially, the products were sold through the e-commerce platforms and after considering the acceptability of the products and also to push its sales the Company has decided to market its new products through other distributing channels.

One of our key strengths has been our wide and growing distribution network with a wide presence across India through 2,500 plus Multi Brand Outlets (MBOs), 236 Exclusive Brand Outlets (EBOs) and 207 national chain store outlets. Majority of the Companyâs revenues comes from MBOs and franchise EBOs where we primarily sell on pre-orders and outright basis. By virtue of this business model, there is no major inventory risk and we remain adequately insulated from the normal hazard sales in the branded apparel business.

SHARE CAPITAL

The Authorized Share Capital of your Company as at 31st March, 2018 stands at Rs. 250,000,000 divided into 25,000,000 Equity Shares of Rs. 10/- each. Further there was no change in the Companyâs Issued, Subscribed and Paid-up Equity Share Capital. As at 31st March, 2018, the Issued, Subscribed and Paid-up Equity Share Capital of the Company stood at Rs. 2,173.21 Lakhs divided into 21,732,064 Equity Shares of Rs. 10/- each.

There was neither any issue of Equity shares with differential rights as to dividend, voting or otherwise nor grant of any stock options or sweat equity under any scheme during the year under review.

DIVIDEND ON EQUITY SHARES

Based on the Companyâs performance, wherein, it has earned a Net Profit of Rs. 5972.14 Lakhs, your Board recommends a dividend of Rs. 12/- per Equity Share (Previous Year Rs. 10/-) of Rs. 10/- each (i.e 120%) for the approval of the members at the ensuing Annual General Meeting. The final dividend on equity shares, if declared by the members would involve a cash outflow of around Rs. 3,143.90 Lakhs (including dividend tax).

TRANSFER TO RESERVES

The Company has earned a total Profit after Tax of Rs. 5,972.14 Lakhs, out of which a sum of Rs. 1,791.64 Lakhs (30% of the profit after tax) has been transferred to Special Reserve maintained for the purpose of future expansions and acquisitions.

Your Company has transferred a sum of Rs. 2,052.16 Lakhs to the General Reserve out of the profits of the Company. MATERIAL CHANGES AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes or commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company i.e 31^st March, 2018 and the date of this report.

PUBLIC DEPOSIT

During the year under review, your Company has not accepted any deposits as envisaged under Section 73 of the Companies Act, 2013 and rules made there under.

SUBSIDIARY, JOINT VENTURES OR ASSOCIATE COMPANIES

Your Company does not have any Subsidiary, Joint Ventures or Associate Company.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNELS

The Board of Directors presently consists of 12 (Twelve) Directors including a Chairman & Managing Director, 4 (Four) Executive Directors, 1 (One) Non Executive Non Independent Director and 6 (Six) Independent Directors.

In terms of the provision of Section 149 of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), your Company have 3 (Three) Women Directors on the Board namely Smt. Ruchika Oswal (DIN:00565979), Smt. Monica Oswal (DIN:00566052) and Dr. Manisha Gupta (DIN:06910242).

The Board consists of a balanced profile having specialization in different fields that enable them to address various business needs of the Company, while placing very strong emphasis on corporate governance.

Directors:

During the year under review, Dr. Sailen Kumar Chaudhuri (DIN: 01021930), Independent Director of the Company had resigned from the Directorship w.e.f. 07.02.2018, due to health issues. Also the Board of Directors in its meeting held on 25.05.2018 had accepted and approved the resignation tendered by Dr. Yash Paul Sachdeva (DIN: 02012337) as Independent Director of the Company, due to pre-occupation and personal circumstances. The Board placed on record the valuable services rendered by both Dr. Sailen Kumar Chaudhuri and Dr. Yash Paul Sachdeva during their tenure and expressed its deep sense of appreciation and gratitude for the same.

Further, the Board in its meeting held on 25.05.2018 had appointed Sh. Rishabh Oswal (DIN: 03610853) as an Additional Director and was designated as an Executive Director for a period of 5 years w.e.f. 01.06.2018, subject to the approval of Members at the ensuing Annual General Meeting of the Company. Also the Board has taken note of Sh. Paurush Roy (DIN: 03038347), Non-Executive Director Non Independent Director of the Company, being an Independent Director of the Company for a term of 3 consecutive years w.e.f. 25.05.2018. For the year commencing from 01.04.2018, Sh. Paurush Roy qualifies conditions to be an Independent Director. Accordingly, it has been decided by the Board that henceforth he will be deemed to be an Independent Director and his appointment as an Independent Director is subject to the confirmation by the members in the forthcoming Annual General Meeting after considering the Explanatory Statement attached to the notice calling Annual General Meeting.

Re-appointment of Executive Director

During the year under review the members at their Ninth (9^th) Annual General Meeting (AGM) held on 29^th September, 2017, had the re-appointed Sh. Sandeep Jain (DIN: 00565760) as an Executive Director of the Company for a term of five years w.e.f. 01.08.2017.

Retirement by Rotation

In accordance with the provisions of Section 152(6) of the Companies Act, 2013, Smt. Ruchika Oswal (DIN: 00565979) and Smt. Monica Oswal (DIN: 00566052), Executive Directors of the Company, being longest in the office since their last appointments/ re-appointments, shall retire at the forthcoming Annual General Meeting and being eligible offers themselves for re-appointment, on the same terms and conditions on which they were appointed/ re-appointed.

In compliance with Regulation 36(3) of Listing Regulations and Secretarial Standards brief resumes of all the Directors proposed to be appointed / re-appointed are attached along with the Notice calling the ensuing Annual General Meeting.

Statement of declaration from Independent Directors

All the Independent Directors of the Company have given their respective declarations that they meet the criteria of Independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations.

Key Managerial Personnel (KMPâs)

The Board of Directors had accepted the resignation of Sh. Raman Kumar as Chief Financial Officer of the Company w.e.f. 13.11.2017.

The following persons are the Key Managerial Personnel (KMPâs) of the Company as at March 31, 2018 in terms of provisions of Section 203 of the Companies Act, 2013 and rules made there under:

Names of KMPâs	Designation
Sh. Jawahar Lal Oswal	Chairman & Managing Director
Sh. Sandeep Jain	Executive Director
Smt. Ruchika Oswal	Executive Director
Smt. Monica Oswal	Executive Director
Sh. Sahil Jain	Company Secretary

NUMBER OF BOARD MEETINGS HELD

The Board meets at regular intervals to discuss and decide on policy and strategy apart from other business discussions. However, in case of a special and urgent business need, the Boardâs approval is taken by passing resolution(s) through circulation, as permitted by law, which is confirmed in the subsequent Board Meeting.

During the Financial Year 2017-2018, the Board met on 4 (Four) occasions viz. May 30, 2017, August 18, 2017, November 07, 2017 and February 07, 2018. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

COMMITTEES OF THE BOARD

The Company has constituted the following committees in compliance with the Companies Act, 2013 and the Listing Regulations (erstwhile Listing Agreement).

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders Relationship Committee and

4. Corporate Social Responsibility Committee.

Due to changes occured in the composition of the Board by virtue of resignation of Dr. Yash Paul Sachdeva (DIN: 02012337) and take note of Sh. Paurush Roy (DIN: 03038347) being an Independent Director, various Committees of which they were the Chairperson(s)/ Member(s) were reconstituted by the Board in its meeting held on 25.05.2018. After detailed discussion about the requirements laid down under Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board reconstituted all the relevant Committees such as Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee.

Apart from the aforesaid Committees of the Board, the Company has also constituted Share Transfer Committee. All these Committees have been established as a part of the best corporate governance practices. There have been no instances where the Board has not accepted any recommendation of the aforesaid Committees. The details in respect to the Compositions, Powers, Roles, and Terms of Reference etc. are provided in the Corporate Governance Report forming part of this Report.

ANNUAL BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual evaluation of its own performance, that of its committees and individual directors. Further, the Independent Directors of the Company met once during the year on February 07, 2018 to review the performance of the Non-executive Directors, Chairman of the Company and performance of the Board as a whole. Composition of Board / Committees, Quality and timely flow of information, frequency of meetings, and level of participation in discussions were some of the parameters considered during the evaluation process.

DIRECTORâS RESPONSIBILITY STATEMENT

In compliance of Section 134(3)(c) of the Companies Act, 2013, it is hereby confirmed that:

a) In the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

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

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

d) The directors have prepared the annual accounts on a going concern basis;

e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

Your Company has an adequate system of internal financial control commensurate with its size and scale of operations, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, work performed by the Internal Auditors, Statutory Auditors and Secretarial Auditors and External Consultants, including audit of internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by the management and the Audit Committee, the Board is of the opinion that Internal Financial Controls of the Company were adequate and effective during the year under review.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy adopted by the Company lays down a framework in relation to selection, appointment/ reappointment of Directors, Key Managerial Personnel and Senior Management alongwith their remuneration. It also lays down criteria for determining qualifications, positive attributes, independence of director(s) and other matters provided under sub section (3) of section 178 of the Companies Act, 2013.

The said Policy is available on Companyâs website and the web link for the same is http://www.montecarlocorporate.com/ pdf/NOMINATION-AND-REMUNERATION-POLICY.pdf.

BUSINESS RISK MANAGEMENT

Pursuant to Section 134(3)(n) of the Companies Act, 2013, your management at regular intervals evaluates various risks faced by the Company which could affect its business operations or threaten its existence. Major risks identified by the businesses and functions from time to time are systematically addressed through mitigating actions on a continuing basis.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has formulated a Vigil Mechanism/ Whistle blower Policy to encourage employees to report matters about unethical behaviour, actual or suspected fraud or violation of Companyâs code of conduct without the risk of subsequent victimisation and discrimination. The details of the same are explained in the Corporate Governance Report and the said policy is also posted on the website of the Company i.e. www.montecarlocorporate.com.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Board has constituted a CSR Committee constituted under Section 135 of the Companies Act, 2013. As per the adopted CSR policy, the Company is committed to certain CSR initiatives in the fields of Medical Relief and Research, Environmental Sustainability, Education and Social Upliftment etc., in collaboration with its Group Companies through the Implementing Agency i.e Oswal Foundation. The said policy is available at http://www.montecarlocorporate.com/pdf/Corporate-Social-Responsibility-Policy.pdf.

During the concerned Financial Year, the Company had tied up with Oswal Foundation for undertaking its CSR obligations. Based on the discussions with the foundation, the Company identified the project for setting up the Eye Care Center in a charitable hospital for which estimate amount of expenditure was of Rs. 8-10 Crores. However, the project had to be deferred by the said charitable medical institution. The Company also made efforts to identify projects in other areas. However, it was not able to identify meaningful projects, finalize implementation agencies and the target beneficiaries which would have created a visible impact on the society.

Due to the aforementioned reasons, the Company was not able to spend its CSR amount during the year. The Company remains committed towards the noble cause of social development and has accordingly, decided to carry forward the unspent amount of Financial Year 2017-18 to the next year. In pursuance thereof, the Company, in association with Oswal Foundation has already begun helping to run the charitable hospital for the purposes of diagnosis & treatment besides other charitable activities under CSR already approved.

Accordingly, the company has now issued a cheque of Rs. 302.92 Lakhs, which includes the amount of Rs. 156.20 Lakhs of CSR liability for Financial Year 2017-18 in favour of Oswal Foundation for the purposes of CSR including promotion of charitable hospital being run by Mohan Dai Oswal Cancer Treatment & Research Foundation.

The Annual Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 including a brief outline of the Companyâs CSR Policy is set out as Annexure-A forming part of this Report.

RELATED PARTY TRANSACTIONS

All the transactions entered into by the Company with its related parties, during the year under review were in the âordinary course of the businessâ and on âan armâs length basisâ, none of which was âmaterialâ in accordance with the Companyâs Related Party Transactions Policy. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is enclosed as Annexure-B. Further there are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.

Prior approval of the Audit Committee was also obtained for all the transactions entered into during the year 2017-18 by the Company with its Group Companies. The details of all the related party transactions are placed before the Audit Committee and Board for its consideration and ratification on quarterly basis. Moreover, the Company has already accorded the approval of Members at its Annual General Meeting held on 29^th September, 2017 for all the transactions entered into by the Company during the Financial Year 2017-18 with its related parties in its ordinary course of business.

The details of the transactions entered with Related Parties during the year are provided in the Companyâs Financial Statements at Note No. 38 of the Notes to Accounts in accordance with the relevant Accounting Standard.

Your Company has framed a Policy on Related Party Transactions for purpose of identification and monitoring of such transactions in line with the requirements of the Companies Act, 2013 and Listing Regulations and the said policy is available at http://www.montecarlocorporate.com/pdf/RELATED-PARTY-TRANSACTION-POLICY.pdf.

PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS

The Company has not given any loan, guarantee or made any investment covered under the provisions of Section 186 of the Companies Act, 2013. However, the detail of investments made by the Company is given in the notes to the Financial Statements.

SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

EXTRACT OF ANNUAL RETURN

In terms of provisions of Section 92(3) and Section 134(3)(a) read with Rule 12 of Companies (Management and Administration) Rules, 2014 the extract of the Annual Return in form MGT-9 as at 31.03.2018 is annexed herewith as Annexure-C to this report. Also the copy of Annual Return for the Financial Year ended 31.03.2017 duly filed with the Registrar of Companies in terms of Section 92 of the Companies Act, 2013, has been placed on the website at http://www.montecarlocorporate.com/ pdf/Form-MGT-7-2016-17.pdf.

INTERNAL CONTROL SYSTEM & ITS ADEQUACY

Your Company has developed a well defined Internal Control System commensurate with the size, scale and complexity of its operations. The internal audit function is entrusted to M/s Gupta Vigg & Co., Chartered Accountants, who were appointed as Internal Auditors by the Board in terms of Section 138 of the Companies Act, 2013 and rules made there under. The Internal Auditors monitors and evaluates adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Significant audit observations are addressed to the Audit Committee and the Committee thereafter reviews the adequacy and effectiveness of the internal control systems and suggests various measures to improve and strengthen the same.

CORPORATE GOVERNANCE

The Company is committed to follow the best Corporate Governance practices, including the requirements under the SEBI Listing Regulations and the Board is responsible to ensure the same, from time to time. The Company has duly complied with the Corporate Governance requirements. Further a separate section on Corporate Governance in compliance with the provisions of Regulation 34 of the Listing Regulations read with Schedule V of the said regulations alongwith a Certificate from a Practicing Company Secretary confirming that the Company is and has been compliant with the conditions stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 forms part of the Annual Report.

AUDITORS

Statutory Auditors & Auditorâs Report

As per Section 40 of the Companies Amendment Act, 2017, enforced on 7^th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditor is not required to be ratified at every AGM, still the Board of Directors proposed the ratification of appointment of M/s Walker Chandiok & Co. LLP, as the Statutory Auditors by the shareholders of the Company to hold the office from the conclusion of the forthcoming Annual General Meeting till the conclusion of 11^th Annual General Meeting of the Company, in true sense of the resolution passed by the shareholders in their 7^th AGM, as recommended by the Audit Committee.

The Company has obtained from Auditors a written consent and a certificate as required under the Section 139 of the Companies Act, 2013 to the effect that their reappointment, if made, would be within the limits and in accordance with the criteria specified under Section 141 of the Companies Act, 2013.

The Auditorâs Report on the Annual Accounts of the Company for the year under review is self explanatory and requires no comments. Further, there are no adverse remarks or qualification in the report that calls for Boardâs explanation. During the year under review, there were no frauds reported by Auditors under Section 143(12) of Companies Act, 2013.

Secretarial Auditor

M/s PS. Dua & Associates, Company Secretary in whole time practice, are appointed as Secretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year 2018-19, pursuant to the provisions of Section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditor in his Report for the year under review and therefore, does not call for any further comments. The Secretarial Audit Report for the financial year 2017-18 is annexed as Annexure-D to this report.

Cost Auditor

In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is not covered under the purview of Cost Audit.

GOODS AND SERVICES TAX (GST)

The Goods and Services Tax (GST) is a landmark reform which will have a lasting impact on the economy and on businesses. Your Company has successfully implemented and migrated to GST followed by the changes across operations have been made keeping in mind the changes that GST has brought in.

LISTING OF EQUITY SHARES

The Equity Shares of the Company are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE), Mumbai and the listing fees for the Financial Year 2018-2019 have been duly paid to both the Stock Exchanges.

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

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. During the Financial Year 2017-18 the Company has not received any complaints on the same and hence, no complaint was pending as at 31^st March, 2018.

MANAGEMENTâS DISCUSSION AND ANALYSIS REPORT

Managementâs Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(3) read with Schedule V of the Listing Regulations, is presented separately and forms part of this Annual Report.

DISCLOSURE OF REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY

Information as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as Annexure-E and forms part of this report.

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

The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure-F.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

During the year under review, your Company has duly complied with applicable provisions of the Secretarial Standards on meetings of the Board of Directors (SS-1) and General Meetings (SS-2).

HUMAN RESOURCE & INDUSTRIAL RELATIONS

During the year under review, your Company enjoyed cordial relationship with the workers and employees at all levels of the organisation. A detailed section on Human Resources/Industrial Relations is provided in the Management Discussion and Analysis Report, which forms part of this Annual Report.

ACKNOWLEDGEMENT & APPRECIATION

Your Board is grateful to express its deep sense of gratitude and appreciation to all the Shareholders, Customers, Vendors, Bankers, Financial Institutions and Business Associates of the Company for their continued support during the relevant financial year. Your Board acknowledges support and cooperation received from all the regulatory authorities of the Central Government and State Government respectively.

It also express its sincere appreciation of the employees at all levels for being encouraged to meet several challenges encountered and look forward to their valuable support and commitment in the times ahead.

For and on behalf of Board of Directors

Jawahar Lal Oswal

Place: Ludhiana Chairman & Managing Director

Date: 30.07.2018 (DIN: 00463866)

Mar 31, 2017

Dear Members,

The Directors are pleased to present the Ninth (9^th) Annual Report of the Company along with the Audited Financial Results for the year ended March 31, 2017.

FINANCIAL SUMMARY

Financial Results for the year under review are summarized below:

(Rs, in Lacs)

PARTICULARS	Current Year	Previous Year
	2016-2017	2015-2016
Revenue from operations	58,410.54	62,153.05
Other Income	2,210.01	1,390.97
Total Revenue	60,620.55	63,544.02
Profit before Tax, Financial Charges, Depreciation and Amortization	9,971.33	13,723.04
Expenses & Corporate Social Responsibility Expenditure
Financial Charges	1,195.94	1,624.06
Profit before Tax, Depreciation and Amortization Expenses & Corporate Social Responsibility Expenditure	8,775.39	12,098.98
Depreciation & Amortization	2,473.52	2,927.10
Profit Before Corporate Social Responsibility Expenses and Tax	6,301.87	9,171.88
Corporate Social Responsibility Expenditure	30.28	161.64
Profit before Tax	6,271.60	9,010.24
Tax Expenses/ Adjustment
1. Current Tax	2,211.29	3,432.78
2. Deferred Tax	(171.97)	(261.65)
3. Adjustment for the earlier year	-	(54.73)
Net Profit	4,232.28	5,893.84
Earnings Per Share (Rs,)
Basic	19.47	27.12
Diluted	19.47	27.12

OPERATIONAL REVIEW

This Financial Year, the Company has a negative growth of 6.02% resulting thereof the revenue from operations stands reduced to Rs,58,410.54 Lacs as against Rs,62,153.05 Lacs. The fall in revenue has resulted in fall of EBIDA margin and as well as profit before tax and profit after tax level also. These untoward situations emerged during the year because of two challenges faced by the Company in its tempo of growth. Firstly, as you all are aware that December, 2015 was a year of very low winter and resulting thereof the stocks remain unsold with the franchisees and as well as Multi Brand Outlets (MBO). In the normal trend of our business this effects our sales for the immediately succeeding year. Besides, another blow to the growth rate of the Company was felt on demonetisation in the third quarter of financial year 2016-17, which accounts for our maximum sales

i.e. approximately 60%. Needless to say that demonetization had the adverse effect across all the business and in particular affected grievously the consumer as well as retail business.

The above two factors resulted a blow like a heavy headwinds and thereby affecting the Companyâs top-line and bottom-line. However in the current year we expect to sail smoothly on the path of growth.

SHARE CAPITAL

There was no change in the Companyâs Issued, Subscribed and Paid-up Equity Share Capital. As at 31^st March, 2017, the Issued, Subscribed and Paid-up Equity Share Capital of the Company stood at Rs, 2,173.21 Lacs divided into 21,732,064 Equity Shares of Rs, 10/- each.

There was neither any issue of Equity shares with differential rights as to dividend, voting or otherwise nor grant of any stock options or sweat equity under any scheme during the year under review.

DIVIDEND

Based on the Companyâs performance, wherein, it has earned a Net Profit of Rs, 4,232.28 Lacs, your Directors are pleased to recommend a 100% dividend amounting to Rs, 10/- per Equity Share (Previous Year Rs, 10/-) of Rs, 10/- each for the approval of the members at the ensuing Annual General Meeting.

The final dividend on equity shares, if approved by the members would involve a cash outflow of Rs, 2,615.62 Lacs (including dividend tax of Rs, 442.41 Lacs).

TRANSFER TO RESERVES

The Company has earned a total Profit after Tax of Rs, 4,232.28 Lacs, out of which a sum of Rs, 1,269.68 lacs (30% of the profit after tax) has been transferred to Special Reserve maintained for the purpose of future expansions and acquisitions.

Your Company has transferred a sum of Rs, 180.31 Lacs to the General Reserve out of the profits of the Company.

MATERIAL CHANGES AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes or commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company i.e. 31^st March, 2017 and the date of this report.

PUBLIC DEPOSIT

During the year under review, your Company has not accepted any deposits as envisaged under Section 73 of the Companies Act, 2013 and rules made there under.

SUBSIDIARY, JOINT VENTURES OR ASSOCIATE COMPANIES

Your Company does not have any Subsidiary, Joint Ventures or Associate Company.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNELS

The Board of Directors consists of 13 (Thirteen) Directors including a Chairman & Managing Director, 3 (Three) Executive Directors, 2 (Two) Non Executive Non Independent Directors and 7 (Seven) Independent Directors.

The Board of Directors consists of a balanced profile having specialization in different fields that enable them to address various business needs of the Company, while placing very strong emphasis on corporate governance.

During the year under review, none of the Directors of the Company resigned from their respective Directorships in the Company.

Directors

During the year under review the members at their Eighth (8^th) Annual General Meeting (AGM) held on 29^th September, 2016, had approved the appointment of Sh. Amrik Singh Sohi and Sh. Alok Kumar Misra as Independent Directors. Further, Sh. Jawahar Lal Oswal was appointed as Chairman & Managing Director and Smt. Ruchika Oswal and Smt. Monica Oswal were appointed as Executive Directors of the Company w.e.f. 10.08.2016.

Re-appointment of Executive Director

The members at their 4^th AGM had approved the appointment of Sh. Sandeep Jain as Executive Director, for a period of five years w.e.f 01.08.2012. Considering his valuable contribution to the growth of the Company during the tenure, the Board in its meeting held on 30.05.2017, on the recommendation of the Nomination and Remuneration Committee, have re-appointed him for another term of 5 years commencing from 01.08.2017, subject to the approval of the Members in the ensuing Annual General Meeting (AGM).

Retirement by Rotation

In accordance with the provisions of Section 152(6) of the Companies Act, 2013, Sh. Dinesh Gogna (DIN:00498670) and Sh. Paurush Roy (DIN: 03038347), Directors of the Company, being longest in the office since their last appointments, shall retire at the forthcoming Annual General Meeting and being eligible offers themselves for re-appointment, on the same terms and conditions on which they were appointed.

In compliance with Reg 36(3) of Listing Regulations and Secretarial Standards brief resumes of all the Directors proposed to be appointed / re-appointed are attached along with the Notice calling the ensuing Annual General Meeting.

Statement of declaration from Independent Directors

Key Managerial Personnel (KMPâs)

The following persons are the Key Managerial Personnel (KMPâs) of the Company as on March 31, 2017 in terms of provisions of Section 203 of the Companies Act, 2013 and rules made there under:

Names of KMPâs	Designation
Sh. Jawahar Lal Oswal	Chairman & Managing Director
Sh. Sandeep Jain	Executive Director
Smt. Ruchika Oswal	Executive Director
Smt. Monica Oswal	Executive Director
Sh. Raman Kumar	Chief Financial Officer
Sh. Sahil Jain	Company Secretary

NUMBER OF BOARD MEETINGS HELD

The Board meets at regular intervals to discuss and decide on policy and strategy apart from other business discussions. However, in case of a special and urgent business need, the Boardâs approval is taken by passing resolutions through circulation, as permitted by law, which is confirmed in the subsequent Board Meeting.

During the Financial Year 2016-2017, the Board met on 4 (Four) occasions viz. May 30, 2016, August 09, 2016, November 11, 2016 and February 10, 2017. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

COMMITTEES OF THE BOARD

The Company has constituted the following committees in compliance with the Companies Act, 2013 and the Listing Regulations (erstwhile Listing Agreement):

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders Relationship Committee and

4. Corporate Social Responsibility Committee.

Apart from the aforesaid Committees of the Board, the Company has also constituted Share Transfer Committee. All these Committees have been established as a part of the best corporate governance practices. There have been no instances, where the Board has not accepted any recommendation of the aforesaid Committees. The details in respect to the Compositions, Powers, Roles, and Terms of Reference etc. are provided in the Corporate Governance Report forming part of this Report.

ANNUAL BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual evaluation of its own performance, that of its committees and individual directors. Further, the Independent Directors of the Company met once during the year on February 10, 2017 to review the performance of the Non-executive Directors, Chairman of the Company and performance of the Board as a whole. Composition of Board / Committees, Quality and timely flow of information, frequency of meetings, and level of participation in discussions were some of the parameters considered during the evaluation process.

DIRECTORâS RESPONSIBILITY STATEMENT

In compliance of Section 134(3)(c) of the Companies Act, 2013, it is hereby confirmed that:

a) In the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures;

d) The directors have prepared the annual accounts on a going concern basis;

e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

Based on the framework of Internal Financial Controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors and External Consultants, including audit of internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by the management and the Audit Committee, the Board is of the opinion that Internal Financial Controls of the Company were adequate and effective during the year under review.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy of the Company lays down a framework in relation to appointment/ reappointment of Directors, Key Managerial Personnel and Senior Management of the Company along with their remuneration. It also lays down criteria for determining qualifications, positive attributes, independence of director(s) and other matters provided under sub section (3) of section 178 of the Companies Act, 2013. The said Policy is annexed herewith as Annexure-A forming part of this report and the same can also be accessed from the Companyâs website i.e. www.montecarlocorporate.com.

BUSINESS RISK MANAGEMENT

Pursuant to Section 134(3)(n) of the Companies Act, 2013, your management at regular intervals evaluates various risks faced by the Company which could affect its business operations or threaten its existence. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has formulated a Vigil Mechanism/ Whistle blower Policy to encourage employees to report matters about unethical behavior, actual or suspected fraud or violation of Companyâs code of conduct without the risk of subsequent victimization and discrimination. The details of the same are explained in the Corporate Governance Report and the said policy is also posted on the website of the Company i.e. www.montecarlocorporate.com.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has a CSR Committee constituted under Section 135 of the Companies Act, 2013. The Company has a Corporate Social Responsibility (CSR) Policy as approved by its Board on the recommendation of CSR Committee and is committed to certain CSR initiatives in the fields of Medical Relief and Research, Environmental Sustainability, Education and Social Upliftment etc., in collaboration with its Group Companies through the Implementing Agency i.e Oswal Foundation. The said policy is available at http://www.montecarlocorporate.com/pdf/Corporate-Social-Responsibility-Policy.pdf.

During the year under review, Company has incurred ''30.28 Lacs as contribution towards its CSR activities, out of its overall liability of ''177.00 Lacs calculated in terms of section 135 of the Companies Act, 2013, setting apart the unspent amount of ''146.72 Lacs as a committed CSR activity reserve for the purpose of a new project which is being considered by Oswal Foundation in the field of Eye Care and Heath Care. Further, the said amount of retained earnings will be contributed immediately to Oswal Foundation as and when the aforesaid proposal will be materialized.

RELATED PARTY TRANSACTIONS

All the transactions entered into by the Company with its related parties, during the year under review were in the âordinary course of the businessâ and on âan armâs length basisâ, none of which was âmaterialâ in accordance with the Companyâs Related Party Transactions Policy. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is enclosed as Annexure-C. Further there are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.

Prior approval of the Audit Committee was also obtained for all the transactions entered into during the year 2016-17 by the Company with its Group Companies. The details of all the related party transactions are placed before the Audit Committee and Board for its consideration and ratification on quarterly basis. Moreover, the Company has already accorded the approval of Members at its Annual General Meeting held on 29^th September, 2016 for all the transactions entered into by the Company during the Financial Year 2016-17 with its related parties in its ordinary course of business.

The details of the transactions entered with Related Parties during the year are provided in the Companyâs Financial Statements at Note No. 34 of the Notes to Accounts in accordance with the relevant Accounting Standard.

PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS

SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

EXTRACTS OF ANNUAL RETURN

As required under the provisions of Section 92(3) and Section 134(3)(a) and read with Rule 12 of Companies (Management and Administration) Rules, 2014 the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure-D to this report.

INTERNAL CONTROL SYSTEM & ITS ADEQUACY

Your Company has developed a well defined Internal Control System commensurate with the size, scale and complexity of its operations and which is constantly assessed and strengthened with new/ revised standard operating procedures. The internal audit function is entrusted to M/s Gupta Vigg & Co., Chartered Accountants, who were appointed as Internal Auditors by the Board in terms of Section 138 of the Companies Act, 2013 and rules made there under. The Internal Auditors monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Significant audit observations are presented to the

Audit Committee and the Committee thereafter reviews the adequacy and effectiveness of the internal control systems and suggests various measures to improve and strengthen the same.

CORPORATE GOVERNANCE

The Company is committed to follow best Corporate Governance practices, including the requirements under the SEBI Listing Regulations and the Board is responsible to ensure the same, from time to time. The Company has duly complied with the Corporate Governance requirements. Further a separate section on Corporate Governance and a Certificate from a Practicing Company Secretary confirming that the Company is and has been compliant with the conditions stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 forms part of the Annual Report.

AUDITORS

Statutory Auditor & Auditorâs Report

M/s Walker Chandiok & Co. LLP (Firm Registration No: 001067N / N500013), Chartered Accountants, were appointed as Statutory Auditors of the Company in the 7^th Annual General Meeting to hold office up to the conclusion of the 12^th Annual General Meeting, subject to ratification by shareholders each year. Accordingly, the Board of Directors based on the recommendation of the Audit Committee has proposed the ratification of appointment of M/s Walker Chandiok & Co. LLP, as the Statutory Auditors by the shareholders of the Company to hold the office from the conclusion of the forthcoming Annual General Meeting till the conclusion of 10^th Annual General Meeting of the Company.

Secretarial Auditor

M/s P.S. Dua & Associates, Practicing Company Secretaries, are appointed as Secretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year 2017-18, pursuant to the provisions of Section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Cost Auditor

In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is not covered under the purview of Cost Audit.

LISTING OF EQUITY SHARES

The Equity Shares of the Company are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE), Mumbai and the listing fees for the Financial Year 2017-2018 have been duly paid to both the Stock Exchanges.

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

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the Financial Year 2016-17 the Company has not received any complaints on the same and hence, no complaint was pending as at 31^st March, 2017.

MANAGEMENTâS DISCUSSION AND ANALYSIS REPORT

PARTICULARS OF EMPLOYEES

Disclosures relating to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as Annexure-F and forms part of this report.

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

HUMAN RESOURCE & INDUSTRIAL RELATIONS

During the year under review, your Company enjoyed cordial relationship with the workers and employees at all levels of the organization. A detailed section on Human Resources/Industrial Relations is provided in the Management Discussion and Analysis Report, which forms part of this Annual Report.

ACKNOWLEDGEMENT & APPRECIATION

Your Directors take this opportunity to express their deep sense of gratitude to all the Companyâs Shareholders, Customers, Vendors, Bankers, Financial Institutions and Business Associates for their continued support during the year. They also express their sincere appreciation of the employees at all levels for having risen to meet the several challenges encountered and look forward to their valuable support and commitment in the times ahead.

For and on behalf of Board of Directors

Jawahar Lal Oswal

Place : Ludhiana Chairman & Managing Director

Date : 18.08.2017 (DIN: 00463866)

Mar 31, 2015

Dear Members,

The Directors are pleased to present the Seventh (7th) Annual Report of the Company along with the Audited Financial

Results for the year ended March 31, 2015.

FINANCIAL RESULTS

Financial Results for the year under review are summarized below:

(Rs,in Lacs)

PARTICULARS Current Year Previous Year (As At 31.03.2015) (As At 31.03.2014)

Revenue from operations 58,257.70 50,310.32

Other Income 1,895.32 1,516.07

Total Revenue 60,153.02 51,826.39 Profit before Financial Charges, Depreciation & Amortization 14,192.67 10787.68

Financial Charges 1,707.77 931.89

Profit before Tax & Depreciation & Amortization 12,484.90 9,855.80

Depreciation & Amortization 3,340.34 1,620.88

Profit before Tax 9,144.56 8,234.91 Tax Expenses/ Adjustment

1. Current Tax 3,479.82 2,591.00

2. Deferred Tax (312.20) 180.99

3. Adjustment for the earlier year Nil 22.55

Amount Available for Appropriation 5976.94 5440.37

Appropriations

Transfer to Special Reserve 1,793.08 -*

Dividend 2,173.21 -

Tax on Proposed Dividend 444.96 -

Transfer to General Reserve 1,488.75 5,400.00

Earnings Per Share (Rs,)

Basic 27.50 25.03

Diluted 27.50 25.03

Dividend Per Share (Rs,) 10.00 -

OPERATIONAL REVIEW

The Company has delivered an impressive financial and operating performance for the Financial Year 2014-15 by achieving great performance both in top line and bottom line with a remarkable growth of 16.07% in total revenue.

The revenue from operations stood at Rs.58,257.70 Lacs as compared to Rs.50,310.32 Lacs in the previous year, indicating an impressive growth of 15.80%. As a result, your Company's Profit before financial charges, depreciation, amortization and tax also displayed robust growth by 31.56% from Rs.10,787.68 Lacs for the year ended March 31, 2014 to Rs.14,192.67 Lacs for the year ended March 31, 2015. The other income of the Company stood at Rs.1,895.32 Lacs as against the previous figure of Rs.1,516.07 Lacs and this increase is primarily due to increase in the interest earned on fixed deposits.

The growth rate in revenue is in natural consequence of continued efforts made by the company and its executives at all levels and it is expected to achieve the growth at a same pace in future also.

Your Directors are also pleased to report that consistent efforts and a policy to cut down the cost has resulted in reduction of per unit cost and consequently enabled the company to achieve better margins and face the competitors more efficiently.

During the year, the Company has achieved an excellent growth in the sale of "Cloak & Decker" the economy range launched by the company last year. The Company has also commenced production of socks during the current year. Your company has also chalked-out well thought-out strategy of building E-Commerce platforms and also looking to develop multiple 'Differentiated Online Formats' to play in E-Commerce space i.e. online sales of its products under B2B and B2C model.

The Company has also expanded its sale net work by increasing its number of exclusive retail outlets/ large format stores and distributors during the year. Detailed analysis on the Company's operations is given in the Management Discussion and Analysis report which forms part of this Annual Report.

SUCCESSFUL INITIAL PUBLIC OFFER

The Company got its shares listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on 19.12.2014 pursuant to the successful completion of Initial Public Offering (IPO) in accordance with Securities and Exchange Board of India (SEBI) Regulations. This was an offer for sale by the existing share holders of the Company wherein the Private Equity Investor (Kanchi Investments Limited) and the Promoters divested 1646420 shares (7.58%) and 3786596 shares (17.42%) respectively, at a premium of Rs.635/- per equity share of Rs. 10/- each. The IPO of the Company received an overwhelming response from the Investors as it was oversubscribed by 7.83 times, thereby making this IPO a remarkable success. The Paid up equity share capital of the Company as on 31st March, 2015 is 2173.21 Lacs.

DIVIDEND

The Company has earned a net profit after tax of Rs.5,976.94 lacs for the year. Yours Directors have recommended 100% dividend amounting to Rs.10/- per equity share, in its meeting held on May 30, 2015, subject to the approval of members at the ensuing Annual General Meeting.

TRANSFER TO RESERVES

The company has earned a total profit after tax of Rs.5,976.94 lacs, out of which a sum of Rs.1,793.08 lacs (30% of the profit after tax) has been transferred to Special Reserve maintained for purpose of future expansions and acquisitions.

Your Company has transferred Rs.1,462.30 lakhs to the General Reserve out of the profits available for appropriation after making a provision for dividend amounting to Rs.2,618.17 lacs (inclusive of dividend distribution tax) and the same is in compliance with the applicable provisions prescribed under the Companies Act 2013.

MATERIAL CHANGES AFFECTING FINANCIAL POSITION OF THE COMPANY:

There are no material changes or commitments, affecting the financial position of the company which have occurred between 31st March 2015 and the date of this report.

PUBLIC DEPOSIT

During the year under review, your Company has not accepted any deposits as envisaged under Section 73 of Companies Act, 2013 and rules made there under.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

The Board of Directors consists of Twelve (12) Directors which include a Chairman & Managing Director, Three (3) Executive Directors and Six (6) Independent Directors.

In terms of provisions of Section 149(4) of Companies Act 2013 and Clause 49 of the Listing Agreement entered with Stock Exchanges, following directors were appointed as Independent Directors by the members in their Extra Ordinary General Meeting held on 27.06.2014:

- Dr. Yash Paul Sachdeva (DIN: 02012337)

- Dr. Vandana Bhandari (DIN: 06841653)

- Dr Sailen Kumar Chaudhuri (DIN: 01021930)

- Sh. Ajit Singh Chatha (DIN: 02289613)

- Dr. Suresh Kumar Singla (DIN: 00403423)

- Dr. Manisha Gupta (DIN: 06910242)

A formal letter of appointment to Independent Directors as provided in Companies Act, 2013 and the Listing Agreement have been issued and the format for the same has been disclosed on the website of the Company viz. www.montecarlocorporate.com.

All the Independent Directors have given declarations confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Sh. Paurush Roy (DIN: 03038347) ceased to act as nominee of Kanchi Investments Limited ("Private Equity Investor") on the board due to cessation of Share Subscription cum Share Holders Agreement entered by the Company and Kanchi Investments Limited, on successful completion of public issue of the Company. Consequently, the terms of the services of Sh. Gautam Gode (DIN: 01709758), an Alternate Director to Sh. Paurush Roy, Nominee Director of the company also ceased to be effective. The Board also place on record thanks for the valuable services rendered by him during his tenure and expresses its deep sense of appreciation and gratitude for the same.

However the Board in its meeting held on 03.02.2015 decided to retain Sh. Paurush Roy on the Board as Non Executive Director. There was no resignation of Directors during the year.

In terms of the provision of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, your company has four Women Directors on the Board namely Smt. Ruchika Oswal (DIN:00565979), Smt. Monica Oswal (DIN:00566052), Dr. Vandana Bhandari (DIN:06841653) and Dr. Manisha Gupta (DIN:06910242).

In accordance with the provisions of Section 152 of the Companies Act, 2013, Sh. Sandeep Jain (DIN-00565760) and Sh. Dinesh Gogna (DIN-00498670), Directors of the Company, being longest in the office since their last appointments shall retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment on the same terms and conditions on which they were appointed.

During the year under review Sh. Rukmesh Mohan Sood, Finance Controller of the Company was re-designated as Chief Financial Officer of the Company w.e.f 27.06.2014 under the provisions of the Act. However, the board of directors in their meeting held on 06.08.2015 appointed Sh. Sarweshwer Arora, Chartered Accountant as Chief Financial Officer in place of Sh. Rukmesh Mohan Sood, who has resigned from the said position.

Following are the existing Key Managerial Personnel (KMP's) in accordance with the provision of Section 203 of Companies Act, 2013 and rules made there under.

Names of KMP's Designation

Sh. Jawahar Lal Oswal Chairman & Managing Director

Sh. Sandeep Jain Executive Director

Smt. Ruchika Oswal Executive Director

Smt. Monica Oswal Executive Director

Sh. Sarweshwer Arora Chief Financial Officer

Sh. Sahil Jain Company Secretary

NUMBER OF MEETINGS OF THE BOARD:

During the year, 4 (Four) Board Meetings were convened and held, details of which are provided in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

COMMITTEES OF THE BOARD:

The Company has several committees i.e Audit Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee, Corporate Social Responsibility Committee, Share Transfer Committee and IPO Committee which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the Companies Act and Listing Agreement. The details with respect to the compositions, powers, roles, terms of reference etc. of relevant committees are mentioned in Corporate Governance Report of the company which forms part of this Annual Report.

EVALUATION OF BOARD OF DIRECTORS, COMMITTEES AND DIRECTORS:

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, its Committees and all the directors individually as per the criteria laid down by the Nomination & Remuneration Committee of the Company. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report.

DIRECTOR'S RESPONSIBILITY STATEMENT:

In Compliance of Section 134(5) of the Companies Act 2013, it is hereby confirmed that:

a) In the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

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

d) The directors have prepared the annual accounts on a going concern basis;

e) The directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively and

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

NOMINATION AND REMUNERATION POLICY:

The Nomination & Remuneration Policy has been framed which lays down a framework in relation to appointment and remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for determining qualifications, positive attributes, independence of director and other matters provided under sub section (3) of section 178 of the Companies Act 2013. The Remuneration Policy is elaborated in the Corporate Governance Report and can also be accessed on the website of the Company.

BUSINESS RISK MANAGEMENT:

Pursuant to section 134 (3)(n) of the Companies Act, 2013 & Clause 49 of the listing agreement, the company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The details of the committee and its terms of reference are set out in the corporate governance report forming part of this Annual report. Your Directors in regular intervals evaluate the risks faced by the Company which could affect its business operations or threaten its existence. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a constant basis.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

The Company has constituted a Vigil mechanism/ Whistle Blower Policy to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of Company's code of conduct. The details are explained in the Corporate Governance Report and the said policy is also disclosed on the Website of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company has constituted a CSR committee as per the provisions of Section 135 of the Companies Act 2013, details of which are given in the Corporate Governance Report forming part of this report. The Board has also framed a CSR policy for the Company on the recommendations of the CSR Committee. The policy is committed to certain CSR initiative and expects to incur expenditure during the ensuing year in the areas identified which are related to Medical Relief and Research, Environmental Sustainability, Education and Social Upliftment. The said policy has also been posted on the website of the Company.

However, during the financial year 2014-2015 the Company has not incurred any expenditure on Corporate Social Responsibility as it was in the process of identifying specific objects/ programs for undertaking CSR activities. The Company was undertaking surveys for identifying the projects in thematic areas. However, as the other group companies are also on the same path, your company this year has therefore decided to undertake its CSR activities in collaboration with them, under one umbrella, i.e. through Oswal Foundation, which is a Registered Society having charitable objects in the said fields.

The Report on CSR activities as required under Companies (Corporate Social Responsibility) Rules, 2014 including a brief outline of the Company's CSR Policy is set out as Annexure-A forming part of the report.

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. Accordingly the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2 is enclosed as Annexue B. Further there are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.

The details of related party transactions are placed before the Audit Committee for its review and approval on quarterly basis. The Company has framed a Related Party Transactions policy for purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is available in the Company's website at www.montecarlocorporate.com.

PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS:

The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act 2013. Details of investments made by the Company are given in the notes to the financial statements.

SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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.

EXTRACTS OF ANNUAL RETURN:

Pursuant to sub-section 3 (a) of Section 134 and sub-section (3) of Section 92, read with Rule 12 of Companies (Management and Administration) Rules, 2014 the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure-C, forms an integral part of this report.

EXTRAORDINARY GENERAL MEETING:

During the year under review, an Extra Ordinary General Meeting of the company was held on June 27, 2014, the details regarding the meeting are included in Corporate Governance Report.

POSTAL BALLOT:

During the current financial year the Company has conducted postal ballot exercise in accordance with the provisions of Companies Act 2013 and Listing Agreement for the purpose of amendment/alteration of Memorandum & Articles of Association of the Company.

INTERNAL CONTROL SYSTEM & THEIR ADEQUACY:

Your Company has developed a well defined internal control system commensurate with the size, scale and complexity of its operations and which is constantly assessed and strengthened with new/ revised standard operating procedures. The internal audit is entrusted to M/s Gupta Vigg & Co, Chartered Accountants, who were appointed by the board in terms of Section 138 of the Companies Act, 2013 and rules made thereunder. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes and ensure optimal utilization & protection of company's resources. The Internal Auditors monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Significant audit observations and corrective actions are presented to the Audit Committee of the Board. Committee thereafter reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same.

CORPORATE GOVERNANCE:

The Company is committed to adhere the best corporate governance practices. A separate section on Management Discussion and Analysis, Corporate Governance and a Certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report.

STATUTORY AUDITOR & AUDITOR'S REPORT:

M/s Walker Chandiok & Co. LLP (Firm Registration No: 001067N / N500013), Chartered Accountants, who are Statutory Auditor of the Company, hold office up to the forthcoming Annual General Meeting. The Board of Directors based on the recommendation of the Audit Committee has proposed the appointment of M/s Walker Chandiok & Co. LLP, as the Statutory Auditors of the Company for a period of five years to hold the office from the conclusion of the forthcoming Annual General Meeting till the conclusion of 12th Annual General Meeting of the Company subject to ratification by shareholders at every Annual General Meeting.

The Company has obtained from Auditors a written consent and a certificate as required under Section 139 of the Companies Act, 2013 to the effect that their reappointment, if made, would be within the limits and in accordance with the conditions specified under section 141(3)(g) of the Companies Act, 2013.

The Auditor's Report on the Accounts of the Company for the year under review is self explanatory and requires no comments. Further there are no adverse remarks or qualification in the report that calls for Board's explanation.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed M/s P.S. Dua & Associates, Company Secretaries in Practice (C.P. No. 3934) to undertake the Secretarial Audit of the Company for the Financial Year 2014-2015.

The Secretarial Audit Report is annexed herewith as Annexure-D and forms an integral part of this report. Further there are no adverse remarks or qualification in the report that calls for Board's explanation.

COST AUDITOR:

The Cost Audit Report for the year ended 31st March, 2014 was filed with the Ministry of Corporate Affairs, in accordance with the requirement of law.

In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is not covered under the purview of Cost Audit from the FY 2014-15.

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

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. During the financial year 2014-15, the company has not received any complaints on the same and hence no complaints remain pending as of 31 March, 2015.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement is presented separately and forms part of this Annual Report.

PARTICULARS OF EMPLOYEES:

Disclosures relating to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5 (2) and 5 (3) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as Annexure-E and form part of this report.

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

The information on Conservation of Energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given as Annexure-F.

HUMAN RESOURSE & INDUSTRIAL RELATIONS:

During the year under review, your company enjoyed cordial relationship with workers and employees at all levels. A detailed section on Human Resources/Industrial Relations is provided in the Management Discussion and Analysis Report, which forms part of this Annual Report.

ACKNOWLEDGEMENT & APPRECIATION:

The Directors take this opportunity to express their deep sense of gratitude to the Company's shareholders, customers, vendors, bankers, financial institutions and business associates for their continued support during the year. The Directors also express their sincere appreciation of the employees at all levels for having risen to meet the several challenges encountered and look forward to their valuable support and commitment in the times ahead.

FOR AND ON BEHALF OF BOARD OF DIRECTORS

Place: LUDHIANA JAWAHAR LAL OSWAL

Date: 06.08.2015 CHAIRMAN & MANAGING DIRECTOR

(DIN: 00463866

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