annual report 2015-16...annual report 2015-16 contents corporate information 1 notice 4 director’s...

ANNUAL REPORT 2015-16

CONTENTS

Corporate Information 1

Notice 4

Director’s Report 19

Management Discussion & Analysis 45

Corporate Governance Report 48

CEO/CFO Certification 63

Auditor’s Certificate on Corporate Governance 64

Independent Auditor’s Report 65

Balance Sheet 70

Statement of Profit & Loss Account 71

Cash Flow Statement 72

Notes to Financial Statement 74

Proxy Form 99

Attendance Slip 101

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CORPORATE INFORMATION

BOARD OF DIRECTORSMr. Purushottam C. Mandhana - Chairman & Managing DirectorMr. Biharilal C. Mandhana1 - Executive DirectorMr. Manish B. Mandhana - Joint Managing DirectorMr. Ghyanendra Nath Bajpai2 - Non-Executive and Independent DirectorMr. Khurshed M. Thanawalla3 - Non-Executive and Independent DirectorMr. Dilip G. Karnik4 - Non-Executive and Independent DirectorMr. Prashant K. Asher5 - Non-Executive and Independent DirectorMrs. Sangeeta M. Mandhana - Non-Executive Director

BOARD COMMITTEESAudit Committee Nomination & Remuneration CommitteeMr. Khurshed M. Thanawalla3 Chairman Mr. Khurshed M. Thanawalla3 ChairmanMr. Ghyanendra Nath Bajpai2 Member Mr. Ghyanendra Nath Bajpai2 MemberMr. Dilip G. Karnik4 Member Mr. Dilip G. Karnik4 MemberMr. Prashant K. Asher5 Member Mr. Prashant K. Asher5 MemberMr. Purushottam C. Mandhana Member

Stakeholders’ Relationship Committee Management CommitteeMr. Khurshed M. Thanawalla3 Chairman Mr. Purushottam C. Mandhana ChairmanMr. Dilip G. Karnik4 Member Mr. Biharilal C. Mandhana1 MemberMr. Manish B. Mandhana Member Mr. Manish B. Mandhana Member

CSR Committee Mr. Dilip G. Karnik4 ChairmanMr. Ghyanendra Nath Bajpai2 MemberMr. Khurshed M. Thanawalla3 MemberMr. Purushottam C. Mandhana Member________1 Mr. Biharilal C. Mandhana ceased as Director & consequently as Member of the Committee w.e.f. 10th June, 20162 Mr. Ghyanendra Nath Bajpai ceased as Director & consequently as Member of the Committee w.e.f. 25th June, 20163 Mr. Khurshed M. Thanawalla ceased as Director & consequently as Member of the Committee w.e.f. 7th September, 20164 Mr. Dilip G. Karnik ceased as Director & consequently as Member of the Committee w.e.f. 27th June, 20165 Mr. Prashant K. Asher ceased as Director & consequently as Member of the Committee w.e.f. 7th September, 2016

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Mandhana Industries Limited

Mr. Vinay Sampat - Vice President - Legal & Company Secretary

Auditors SolicitorsM/s Vishal H. Shah & Associates M/s Crawford Bayley & Co.Chartered Accountants Advocates & Solicitors

Internal AuditorsM/s Hinesh R. Doshi & Co. M/s B. Choraria & Mates Chartered Accountants Chartered Accountants(For Corporate Office, Mumbai & Tarapur units) (For Bengaluru units)

Cost Auditors Secretarial AuditorM/s Babulal M. Parihar & Co., Mr. Nitin R. JoshiCost Accountants Practicing Company Secretary

BankersBank of Baroda State Bank of IndiaCorporation Bank The Saraswat Co-Op. Bank Ltd.State Bank of Patiala Bank of IndiaAllahabad Bank Axis Bank LimitedPunjab National Bank HDFC Bank LimitedIndian Bank Karur Vysya Bank

Registered Office Corporate OfficePlot No. C-3, MIDC, 205-214, Peninsula Centre, Tarapur Industrial Area, Dr. S. S. Rao Road, Boisar, Dist: Palghar - 401 506. Parel, Mumbai - 400 012.Tel : 91-2525-605704/05/06 Tel : 91-22-4353 9191Fax: 91-22-43539358 Fax: 91-22-4353 9216

email : [email protected]: www.mandhana.com

Registrar and Share Transfer AgentsLink Intime India Private Limited(Unit : Mandhana Industries Limited)C-13, Pannalal Silk Mills Compound,LBS Marg, Bhandup (W), Mumbai - 400 078.Tel : 91-22-2594 6970Fax : 91-22-2594 6969email : [email protected]

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Branch Offices Bengaluru New Delhi26/A, Peenya ll Phase, 508-509, Ansal Tower, Peenya Industrial Area, 38, Nehru Place,Near NTTF Bus Stop, New Delhi - 110 019.Bengaluru - 560 058.

Works MANDHANA DYEING MANDHANA WEAVING HOUSE (A Division of Mandhana Industries Limited) (Shirting Division)Plot No. E-25, MIDC, (A Division of Mandhana Industries Limited)Tarapur Industrial Area, Plot No. C-2, MIDC, Tarapur Industrial Area,District Palghar – 401 506. District Palghar – 401 506.

MANDHANA WEAVING HOUSE MANDHANA DYEING – UNIT II(A Division of Mandhana Industries Limited) (A Division of Mandhana Industries Limited)Plot No. E-33, MIDC, Plot No. C-3, MIDC, Tarapur Industrial Area, Tarapur Industrial Area,District Palghar – 401 506. District Palghar – 401 506.

MANDHANA INDUSTRIES LIMITED MANDHANA INDUSTRIES LIMITED(Garment Division) (Garment Division)Plot No. E-132, MIDC, B Wing, Ganpati Baug,Tarapur Industrial Area, T. J. Road, Sewree (West)District Palghar – 401 506. Mumbai – 400 015.

MANDHANA INDUSTRIES LIMITED MANDHANA INDUSTRIES LIMITEDBaramati Hi-Tech Textile Park Ltd., (Garment Division)Plot No.17-20, Plot No.E-1/2, Plot No.31, Survey No.161, Laggare Village,MIDC. Industrial Area, Yeshwanthpura, Hobli, Bengaluru North Taluka,Baramati – 413 133. Bengaluru – 560 058.

MANDHANA INDUSTRIES LIMITED MANDHANA INDUSTRIES LIMITED(Garment Division) (Garment Division)26/A, Peenya ll Phase, Peenya Industrial Area, No.21-D, 2nd Phase, Near NTTF Bus Stop, Peenya Industrial Area,Bengaluru – 560 058. Bengaluru – 560 058.

MANDHANA INDUSTRIES LIMITED(Garment Division)Unit No36/2, Maruti Plaza, Madanayakanahalli, Dasanapura, Hobli, Tumkur Road,Bengaluru - 562 123.

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MANDHANA INDUSTRIES LIMITEDCIN: L17120MH1984PLC033553

Registered Office: Plot No. C-3, M.I.D.C., Tarapur Industrial Area, Boisar, Dist. Palghar - 401 506.Tel: +91 2525 605 704/05/06 • Fax: +91 22 43539358 • E-mail: [email protected]

Website: www.mandhana.com

NOTICE OF THE 32ND ANNUAL GENERAL MEETING

To, The Members, Mandhana Industries Limited

NOTICE is hereby given that the Thirty Second Annual General Meeting of the Members of Mandhana Industries Limited will be held at the premises of the Company at Plot No. C-2, M.I.D.C., Tarapur Industrial Area, Boisar, Palghar - 401 506 on Friday, the 30th day of December 2016 at 10.00 a.m., for the purpose of transacting the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2016 and the Profit and Loss Account for the year ended as on that date and the Reports of the Directors and Auditors thereon.

2. To appoint a Director in place of Mr. Manish B. Mandhana, (DIN No. 00025449) who retires by rotation in terms of Section 152(6) of the Companies Act, 2013, and being eligible, offers himself for re-appointment.

SPECIAL BUSINESS:

3. Appointment of Statutory Auditors to fill the casual vacancy

To consider and, if thought fit, to pass, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 139(8) and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014 (including any modifications or amendments thereof, for the time being in force), M/s. KPND & Co., Chartered Accountants (Firm Registration No. 133861W) be and is hereby appointed as the auditors of the Company to fill the casual vacancy caused by the resignation of M/s Vishal H. Shah & Associates, Chartered Accountants, to hold office of the auditors of the Company from the conclusion of this meeting until the conclusion of the 37th Annual General Meeting (subject to ratification of the appointment

by the Members at every Annual General Meeting) and that the Chairman and Managing Director in consultation with the Auditors, be and is hereby authorized to fix the remuneration payable to them for the financial year ending 31st March, 2017 plus applicable Service Tax and re-imbursement of travelling and out-of pocket expenses, if any, incurred by them for audit purpose.”

4. Ratification of appointment & remuneration of M/s Babulal M. Parihar & Co., Cost Accountants, as the Cost Auditors for the FY 2016-17

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to Section 148 of the Companies Act, 2013 and all other applicable provisions, if any, including any statutory modification(s) or re-enactment thereof, for the time being in force, and the Companies (Audit & Auditors) Rules, 2014, the appointment of M/s Babulal M. Parihar & Co., Cost Accountants, as the Cost Auditors of the Company, to audit the cost records maintained by the Company in respect of the products manufactured by the Company, which are covered under the Central Excise Tariff Act, 1985, for the Financial Year 2016-17 on a remuneration of Rs.1,25,000/- (Rupees One Lakh Twenty Five Thousand Only) plus Service Tax as applicable, be and is hereby ratified.”

5. Adoption of new set of Articles of Association in alignment with the provisions contained under the Companies Act, 2013

To consider and, if thought fit, to pass, the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 14 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Incorporation) Rules, 2014 (including any statutory modification or re‐enactment thereof, for the time being in force), the approval of the Company be and

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is hereby given for adoption of new set of Articles of Association in substitution for and to the entire exclusion of the extant Articles of Association of the Company.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all such acts, deeds, matters and things as may be deemed necessary and expedient to give effect to the aforesaid resolution.”

6. Alteration of Memorandum of Association in alignment with the provisions contained under the Companies Act, 2013

To consider and, if thought fit, to pass the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 13 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Incorporation) Rules, 2014, including any statutory modification or re‐enactment thereof, for the time being in force, and subject to the necessary approval of the Central Government, or any other statutory authority(ies), if any, required in this behalf, the approval of the Company be and is hereby given for effecting the following amendments in Clause III of the existing Memorandum of Association, dealing with the objects of the Company:‐

1. The sub‐heading III(B) “OBJECTS INCIDENTAL OR ANCILLARY TO THE ATTAINMENT OF THE MAIN OBJECTS” be substituted by the new sub‐heading “MATTERS WHICH ARE NECESSARY FOR FURTHERANCE OF THE OBJECTS SPECIFIED IN CLAUSE III(A)”, with existing objects appearing under sub clauses 2 to 46 thereof.

2. Under sub‐clause 38 and 39 of new sub‐heading “MATTERS WHICH ARE NECESSARY FOR FURTHERANCE OF THE OBJECTS SPECIFIED IN CLAUSE III(A)”, the words “Companies Act, 1956” be substituted with the words “Companies Act, 2013”.

3. Sub‐clauses 47 to 62 as appearing under the sub‐heading III(C) i.e. “OTHER OBJECTS”, be shifted under the new sub‐heading III(B) i.e. “MATTERS WHICH ARE NECESSARY FOR FURTHERANCE OF THE OBJECTS SPECIFIED IN CLAUSE III(A)”, vide creation of new sub clauses no. 47 to 62, the sub‐heading III(C) i.e. “OTHER OBJECTS”, be deleted.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all such acts, deeds, matters and things as may be deemed necessary and expedient to give effect to the aforesaid resolution.”

7. Change in the Name of the Company

To consider and, if thought fit, to pass, the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to provisions of Section 13 and Section 14 read with Section 4 and Section 5 of the Companies Act, 2013, read with relevant rules made there under and any other applicable provisions of the Companies Act, 2013, for the time being in force including any statutory modification or enactments made thereof from time to time and Articles of Association of the Company and subject to the approval of Stock Exchanges where shares of the Company are listed, the consent of the Members of the Company be and is hereby accorded to change the name of the Company from ‘MANDHANA INDUSTRIES LIMITED’ to ‘THE MANDHANA INDUSTRIES LIMITED’ or any other name as may be approved by the Registrar of Companies.

RESOLVED FURTHER THAT the name ‘MANDHANA INDUSTRIES LIMITED’ wherever it occurs in the Memorandum of Association and Articles of Association of the Company be substituted by ‘THE MANDHANA INDUSTRIES LIMITED’.

RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, any Director of the Company be and is hereby authorized to file requisite E-forms with the Registrar of Companies, Mumbai and to take all such steps as may be necessary and to do all such acts, deeds, matters and things, as may be necessary or incidental to give effect to the aforesaid resolution.”

8. Re-appointment of Mr. Purushottam C. Mandhana as Chairman and Managing Director of the Company


“RESOLVED THAT pursuant to the provisions of Sections 196, 197, 198 and 203 and all other applicable provisions, if any, of the Companies Act, 2013 and the rules made thereunder (including

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any statutory modification or re-enactment thereof ), read with Schedule V to the Companies Act, 2013, Regulations 2(zc) and 23(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, provisions contained under Articles of Association of the Company, the Nomination and Remuneration Policy of the Company and subject to such permissions and consent, if any, from the Statutory Authorities, approval is hereby accorded for re‐appointment of Mr. Purushottam C. Mandhana as Chairman and Managing Director of the Company for a period of 3 (three) years with effect from1st April, 2016 on the terms and conditions set out below:‐

I. Remuneration:

a) Salary:

Rs. 20,00,000/‐ per month with such increments as may be decided by the Board of Directors (which includes any committee thereof ) from time to time, but subject to the maximum salary of Rs. 25,00,000/‐ per month.

b) Commission:

Payment of commission of such amount for each Corporate Financial Year, as may be decided by the Board of Directors (which includes any committee thereof ) in its absolute discretion provided that aggregate commission paid to all the Managing Directors in any Corporate Financial Year shall not exceed 1% of the net profits of the Company as appearing in the Audited Annual Accounts

c) Perquisites:

(i) Medical Expenses

Reimbursement of actual medical expenses incurred in India and/or abroad including hospitalization, nursing home and surgical charges for himself and family.

(ii) Leave / Holiday Travel Expenses

Reimbursement of Leave/Holiday Travel expenses (like travel fare, lodging, boarding, conveyance and other expenses) incurred on one or more occasions in a year whether in India or abroad in respect of himself and family subject to the conditions that total reimbursement shall not exceed one month’s

basic salary per annum. The entitlement for any one year to the extent not availed shall be allowed to be accumulated upto next two year.

(iii) Club Fee

Reimbursement of membership fee upto three clubs in India including admission and life membership fees.

(iv) Personal Accident Insurance

Personal Accident Insurance Policy of such amount as may be decided by the Managing Director, the premium of which shall not exceed Rs. 15,000/‐ per annum.

(v) Contribution to Provident Fund, Superannuation and/or Annuity Fund

Company’s contribution to Provident Fund and Superannuation and/or Annuity Fund not exceeding 30% of salary in aggregate in a financial year.

(vi) Gratuity

Gratuity at the rate of half month’s salary for each completed year of service.

(vii) Leave

Leave with full pay or encashment thereof as per the Rules of the Company.

(viii) Electricity Expenses

Expenses pertaining to electricity at the residence of Mr. Purushottam C. Mandhana will be borne / reimbursed by the Company.

(ix) Other perquisites

Subject to overall ceiling on remuneration mentioned hereinabove, Mr. Purushottam C. Mandhana may be given any other allowances, benefits and perquisites as the Board of Directors (which includes any committee thereof ) may from time to time decide and allowed under the provisions of the law.

d) Amenities:

(i) Conveyance facilities

Company shall provide suitable conveyance facilities as may be required by Mr. Purushottam C. Mandhana and approved by the Board of Directors.

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(ii) Communication facilities

Company shall provide telephone, telefax and other communication facilities at the residence of Mr. Purushottam C. Mandhana.

Explanation:

Perquisites shall be evaluated as per Income Tax Rules, wherever applicable and in absence of any such rule, perquisites shall be evaluated at actual cost.

II. Minimum Remuneration:

In the event of loss or inadequacy of profits in any corporate financial year during the currency of tenure of service of Mr. Purushottam C. Mandhana, the aforesaid remuneration shall be paid as a minimum remuneration as provided under Section 197 and all other applicable provisions if any of the Companies Act, 2013.

RESOLVED FURTHER THAT Mr. Purushottam C. Mandhana shall be entitled to receive the remuneration with retrospective effect from 1st April, 2016, after the same is approved by members in the ensuing General Meeting.

RESOLVED FURTHER THAT Mr. Purushottam C. Mandhana shall be entitled to be paid/reimbursed by the Company all costs, charges and expenses as may be incurred by him for the purpose of or on behalf of the Company.

RESOLVED FURTHER THAT the draft of the Agreement of Employment, initialed by the Chairman for the purpose of identification, as placed before the Meeting, be and is hereby approved.

RESOLVED FURTHER THAT any one of the Non‐Executive Directors of the Company be and is hereby authorised to sign and execute the agreement between the Company and Mr. Purushottam C. Mandhana as the Chairman and Managing Director of the Company with effect from 1st April, 2016 on the terms and conditions approved by the members at the ensuing General Meeting.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to alter and vary the aforesaid terms and conditions as may be allowed by the law and agreeable to Mr. Purushottam C. Mandhana.”

9. Re-appointment of Mr. Manish B. Mandhana as Joint Managing Director of the Company


“RESOLVED THAT pursuant to the provisions of Sections 196, 197, 198 and 203 and all other applicable provisions, if any, of the Companies Act, 2013 and the rules made thereunder (including any statutory modification or re-enactment thereof ), read with Schedule V to the Companies Act, 2013, Regulations 2(zc) and 23(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, provisions contained under Articles of Association of the Company, the Nomination and Remuneration Policy of the Company and subject to such permissions and consents, if any, from the Statutory Authorities, approval is hereby accorded for re‐appointment of Mr. Manish B. Mandhana as Joint Managing Director of the Company for a period of 3 (three) years with effect from 1st April, 2016 on the terms and conditions set out below:‐

I. Remuneration:

a) Salary:

Rs. 14,00,000/‐ per month with such increments as may be decided by the Board of Directors (which includes any committee thereof ) from time to time, but subject to the maximum salary of Rs. 18,00,000/‐ per month.

b) Commission:

Payment of commission of such amount for each Corporate Financial Year, as may be decided by the Board of Directors (which includes any committee thereof ) in its absolute discretion provided that aggregate commission paid to all the Managing Directors in any Corporate Financial Year shall not exceed 1% of the net profits of the Company as appearing in the Audited Annual Accounts.

c) Perquisites:

(i) Medical Expenses

Reimbursement of actual medical expenses incurred in India and/or abroad including hospitalization, nursing home and surgical charges for himself and family.

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(ii) Leave / Holiday Travel Expenses

Reimbursement of Leave/Holiday Travel expenses (like travel fare, lodging, boarding, conveyance and other expenses) incurred on one or more occasions in a year whether in India or abroad in respect of himself and family subject to the conditions that total reimbursement shall not exceed one month’s basic salary per annum. The entitlement for any one year to the extent not availed shall be allowed to be accumulated upto next two years.

(iii) Club Fee

Reimbursement of membership fee upto three clubs in India including admission and life membership fees.

(iv) Personal Accident Insurance

Personal Accident Insurance Policy of such amount as may be decided by the Managing Director, the premium of which shall not exceed Rs. 15,000/‐ per annum

(v) Contribution to Provident Fund, Superannuation and/or Annuity Fund

Company’s contribution to Provident Fund and Superannuation and/or Annuity Fund not exceeding 30% of salary in aggregate in a financial year

(vi) Gratuity

Gratuity at the rate of half month’s salary for each completed year of service.

(vii) Leave

Leave with full pay or encashment thereof as per the Rules of the Company.

(viii) Electricity Expenses

Expenses pertaining to electricity at the residence of Mr. Manish B. Mandhana will be borne / reimbursed by the Company.

(ix) Other perquisites

Subject to overall ceiling on remuneration mentioned hereinabove, Mr. Manish B. Mandhana may be given any other allowances, benefits and perquisites as the Board of Directors (which includes any committee thereof ) may from time to time decide and allowed under the provisions of the law.

d) Amenities:

(i) Conveyance facilities

Company shall provide suitable conveyance facilities as may be required by Mr. Manish B. Mandhana and approved by the Board of Directors.

(ii) Communication facilities

Company shall provide telephone, telefax and other communication facilities at the residence of Mr. Manish B. Mandhana.

Explanation:

Perquisites shall be evaluated as per Income Tax Rules, wherever applicable and in absence of any such rule, perquisites shall be evaluated at actual cost.

II. Minimum Remuneration:

In the event of loss or inadequacy of profits in any corporate financial year during the currency of tenure of service of Mr. Manish B. Mandhana, the aforesaid remuneration shall be paid as a minimum remuneration as provided under Section 197 and all other applicable provisions, if any, of the Companies Act, 2013.

RESOLVED FURTHER THAT Mr. Manish B. Mandhana shall be entitled to receive the remuneration with retrospective effect from 1st April, 2016, after the same is approved by members in the ensuing General Meeting.

RESOLVED FURTHER THAT Mr. Manish B. Mandhana shall be entitled to be paid/reimbursed by the Company all costs, charges and expenses as may be incurred by him for the purpose of or on behalf of the Company.

RESOLVED FURTHER THAT the draft of the Agreement of Employment, initialed by the Chairman for the purpose of identification, as placed before the Meeting, be and is hereby approved.

RESOLVED FURTHER THAT any one of the Non‐Executive Director of the Company be and is hereby authorised to sign and execute the agreement between the Company and Mr. Manish B. Mandhana as the Joint Managing Director of the Company with effect from 1st April, 2016 on the terms and conditions approved by the members at the ensuing General Meeting.

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RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to alter and vary the aforesaid terms and conditions as may be allowed by the law and agreeable to Mr. Manish B. Mandhana.”

By Order of the Board of Directorsfor MANDHANA INDUSTRIES LIMITED

PURUSHOTTAM C. MANDHANA(Chairman & Managing Director)

Registered Office:Plot No. C-3, M.I.D.C., Tarapur Industrial Area, Boisar, Dist. Palghar - 401 506

Place : MumbaiDated: 2nd December, 2016

NOTES:

1. The relative Explanatory Statement pursuant to section 102 of the Companies Act, 2013 (Act) in respect of the business under Item Nos. 3 to 9 of the Notice, is annexed hereto. The relevant details as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (‘Listing Regulations’) of person/s seeking appointment/re-appointment as Director/s are also forms part of this notice.

2. A Member entitled to attend and vote at the Annual General Meeting (AGM) is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not be a Member of the Company. The instrument appointing the proxy, in order to be effective, must be deposited at the Company’s Registered Office, duly completed and signed, not less than FORTY-EIGHT HOURS before the meeting. Proxies submitted on behalf of limited companies, societies, etc., must be supported by appropriate resolutions/authority, as applicable. A person can act as proxy on behalf of Members not exceeding fifty (50) and holding in the aggregate not more than 10% of the total share capital of the Company. In case a proxy is proposed to be appointed by a Member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder.

3. Mr. Manish B. Mandhana has been non-retiring director in terms of the applicable provisions under the erstwhile Companies Act, 1956. However, in view of the provisions of the new Companies Act, 2013, Mr. Manish B. Mandhana as Director of the Company is now liable to retire by rotation. He being eligible, offers himself for re-appointment.

None of the directors or Key Managerial Personnel or their relatives except Mr. Manish B. Mandhana himself, Mr. Purushottam C. Mandhana and Mrs. Sangeeta M. Mandhana, is concerned or interested in the said resolution.

The details of the Directors seeking appointment/ re-appointment under Secretarial Standard on General Meeting (SS-2), and Regulation 36(3) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is given in the Report on Corporate Governance forming part of the Annual Report.

4. Members holding shares in dematerialized form are requested to intimate all changes pertaining to their bank details, National Electronic Clearing Service (NECS), Electronic Clearing Service (ECS), mandates, nominations, power of attorney, change of address, change of name, e-mail address, contact numbers, etc., to their Depository Participant (DP). Changes intimated to the DP will then be automatically reflected in the Company’s records which will help the Company and the Company’s Registrars and Share Transfer Agent, M/s. Link Intime India Private Limited, to provide efficient and better services. Members holding shares in physical form are requested to intimate such changes to M/s. Link Intime India Private Limited

Members holding Shares in physical form are requested to communicate any change in address, immediately to the Company’s Registrars and Share Transfer (R&T) Agent, M/s. Link Intime India Private Limited.

5. In case of joint holders attending the meeting, the Member whose name appears as the first holder in the order of names as per the Register of Members of the Company will be entitled to vote.

6. The Members are requested to note that, pursuant to the approval of Hon’ble High Court of Judicature at Bombay to the Scheme of Arrangement for Demerger of the retail division (“Demerged Undertaking”) of the Company, the Company had been under persistent process of implementation

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of demerging its Demerged Undertaking into the Resulting Company viz. The Mandhana Retail Ventures Limited and listing of its equity shares at the Stock Exchanges. Therefore, the Company had applied for extension of period for holding its 32nd Annual General Meeting (AGM) as it was challenging, onerous and arduous on the Company to hold meeting in the intervening period. The Company has received the order of the Registrar of Companies, Mumbai dated 28th September, 2016 under section 96(1) of the Companies Act, 2013, granting extension of three months from 30th September, 2016 to conduct the said AGM. The said AGM, as enumerated in the notice herein above, is being convened on 30th December, 2016, which is within the extended time granted by the Registrar of Companies.

7. Any Member desirous of getting any information on the accounts or operations of the Company is requested to forward his/her queries to the Company at least seven working days prior to the meeting, so that the required information can be made available at the meeting.

8. Members who have not encashed their Interim / Final Dividend for the financial year ended, 31st March, 2010, 31st March, 2011, 31st March, 2012, 31st March, 2013, 31st March, 2014 and 31st March, 2015 are requested to write to the R&T Agent of the Company giving necessary details. Given below is table of dates by which Members can claim the respective unclaimed dividend and dates by which such unclaimed amount shall be transferred to the Investor Education and Protection Fund (IE & PF).

Equity Dividend for Financial

year

Date of Declaration of Dividend

Dividend Date by which unclaimed dividend can be claimed

Proposed date of transfer of Unclaimed Equity Dividend to IE & PF

2009-10 27th September, 2010 7.5% 1st November, 2017 2nd November, 2017 2010-11 29th September, 2011 20% 3rd November, 2018 4th November, 2018 2011-12 20th February, 2012 10% 26th March, 2019 27th March, 2019 2011-12 24th September, 2012 10% 30th October, 2019 31st October, 20192012-13 19th September, 2013 20% 25th October, 2020 26th October, 20202013-14 18th September, 2014 20% 21st October, 2021 22nd October, 20212014-15 30th September, 2015 20% 27th October, 2022 28th October, 2022

9. Pursuant to the provisions of Sections 20(2), 101, 136(1) of the Companies Act, 2013 read with Rule 11 of the Companies (Accounts) Rules, 2014, the Company can send the documents like Notices, Annual Reports, etc. in electronic form to its Members, whose email addresses are registered with the Company / RTA / Depositories. Accordingly, this Notice of the 32nd AGM along with the Annual Report for FY 2015-16 is being sent by electronic mode to those shareholders whose email addresses are registered with the Company / RTA / Depositories, unless any Member has specifically requested for a physical copy. For Members who have not registered their email address, the physical copies are being sent by permitted mode of dispatch.

10. We hereby request the Members to note that the documents viz. Annual Report, Notice, etc. will be uploaded on the website of the Company viz. www.mandhana.com and made available for inspection at the Registered Office as well as the Head Office/ Corporate Office of the Company during the business hours. However, in case a Member wishes

to receive a physical copy of the said documents, he / she is required to send a letter or an e-mail to [email protected] or to [email protected] duly quoting his / her DP ID & Client ID or Folio number, as the case may be, and the said documents will be dispatched to the Members free of cost.

11. (I) Voting through electronic means:

i) In compliance with the provisions of Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended by the Companies (Management and Administration) Amendment Rules, 2015 and Regulation 44 of the Listing Regulations, the Company is pleased to provide the Members a facility to exercise their right to vote on resolutions proposed to be considered at the 32nd Annual General Meeting (AGM) by electronic means through e-Voting Services. The facility of casting votes by the Members using an electronic voting system

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from a place other than venue of the AGM (‘remote e-voting’) will be provided by Central Depository Services (India) Limited. In addition, the facility for voting through Ballot Papers shall also be made available at the AGM and the Members attending the AGM who have not cast their vote by remote e-voting shall be eligible to vote at the AGM.

ii) Based on the shareholding position (either in physical form or in dematerialized form) as on the cut-off date of 23rd December, 2016, a member shall be entitled to vote by way of remote e-voting or at the AGM. However, a person who is not a Member as on the cut-off date of 23rd December, 2016 should treat this Notice for information purpose only.

iii) The Members who have cast their vote by remote e-voting prior to the AGM may also attend the AGM, but shall not be entitled to cast their vote again.

iv) The remote e-voting period commences on Tuesday, 27th December, 2016 (10:00 am) and ends on Thursday, 29th December, 2016 (5:00 pm).

During this period, Members of the Company holding shares either in physical form or in dematerialized form, as on the cut-off date of 23rd December, 2016, may cast their vote by remote e-voting. The remote e-voting module shall be disabled by CDSL for voting thereafter. Once the vote on a resolution is cast by the Member, the Member shall not be allowed to change it subsequently.

The instructions for remote e-voting are as under:

(i) Open your web browser and log on to the e-voting website www.evotingindia.com during the voting period.

(ii) Click on “Shareholders” tab.

(iii) Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID,

b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,

c. Members holding shares in Physical Form should enter Folio Number registered with the Company.

(iv) Next enter the Image Verification as displayed and Click on Login.

(v) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any company, then your existing password is to be used.

(vi) If you are a first time user follow the steps given below:

a) Now, fill up the following details in the appropriate boxes:

For Members holding shares in Demat Form and Physical Form

PAN Enter your 10 digit alpha-numeric PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders)

Members who have not updated their PAN with the Company/Depository Participant are requested to use the sequence number which is provided as follows:

a) For Members to whom the notice of the AGM has been sent through e-mail, the sequence number has been provided in the body of the e-mail;

b) For Members to whom the notice of the AGM has been sent physically, the sequence number has been provided on the cover page of the Annual Report 2015-16.

DOB* Enter the Date of Birth as recorded in your demat account or in the company records for the said demat account or folio no. in dd/mm/yyyy format.

Dividend Bank Details*

Enter the Dividend Bank Details as recorded in your demat account or in the company records for the said demat account or folio number.

* Please enter the DOB or Dividend Bank Details in order to login. If the details are not recorded with the depository or the Company, please enter the member id / folio number in the Dividend Bank details field as mentioned in instruction no. (iii).

b) After entering these details appropriately, click on “SUBMIT” tab.

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c) Members holding shares in physical form will then directly reach the Company selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

d) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

(vii) Now, click on the Electronic Voting Sequence Number (EVSN) of the Company i.e. 161202004. This will take you to the voting page.

(viii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.

(ix) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

(x) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

(xi) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xii) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

(xiii) If Demat account holder has forgotten the password, then enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.

(xiv) Note for Non – Individual Shareholders and Custodians

Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.com and register themselves as Corporates.

A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].

After receiving the login details a compliance user should be created using the admin login and password. The Compliance user would be able to link the account(s) for which they wish to vote on.

The list of accounts should be mailed to [email protected] and on approval of the accounts, they would be able to cast their vote.

A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.

(xv) In case you have any queries or issues/grievance regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at https://www.evotingindia.com under help section or write an email to [email protected]. In this regard, you may also write an e-mail to the Company Secretary & Compliance Officer at [email protected].

II. Shri Nitin R. Joshi, Practicing Company Secretary (Membership No. FCS: 1884) (Address: 415, Marathon Max, Next to Udyog Shetra, Junction of L.B.S. Marg and Goregaon Link Road, Mulund (W), Mumbai 400 080) has been appointed as the Scrutinizer to scrutinize the entire voting process in a fair and transparent manner. Scrutinizer’s email address is: [email protected].

III. You can also update your mobile number and email id in the user profile details of the folio which may be used for sending future communication(s).

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IV. The voting rights of shareholders shall be in proportion to their shares in the paid up equity share capital of the Company as on the cut-off date of Friday, 23rd day of December, 2016.

V. Any person, who acquires shares of the Company and becomes Member of the Company after dispatch of the notice and holding shares as of the cut-off date i.e. 23rd December, 2016, may obtain the login ID and password by sending a request at [email protected] or to the Company at [email protected]. However, if you are already registered with CDSL for remote e-voting, then you can use your existing user ID and password for casting your vote. If you forget your password, then you can reset your password by using ‘Forgot User Details/Password’ option available on [email protected] or contact CDSL at its toll free no.: 18002005533.

VI. A member may participate in the AGM even after exercising his right to vote through remote e-voting but shall not be allowed to vote again at the AGM.

VII. A person, whose name is recorded in the Register of Members or in the register of beneficial owners maintained by the depositories as on the cut-off date only shall be entitled to avail the facility of remote e-voting as well as voting at the AGM through ballot paper.

VIII. The Chairman shall, at the AGM, at the end of discussion on all the resolutions on which the voting is to be held, allow voting with the assistance of the scrutinizer, by use of ‘Ballot Paper’ for all those Members who are present at the AGM but have not cast their votes by availing the “remote e-voting” facility.

IX. The Scrutinizer shall, after the conclusion of voting at the general meeting, first count the votes cast at the meeting and thereafter unblock the votes cast through remote e-voting in the presence of at least two witnesses, not in the employment of the Company and shall submit, not later than three days of the conclusion of the AGM, a Consolidated Scrutinizer’s Report of the total votes cast in favour or against, if any, to the Chairman or a person authorized by him/ her in writing, who shall countersign the same and declare the result of the voting forthwith.

X. The voting results shall be displayed in the prescribed format on the Notice Board of the Company at its Registered Office as well as the Head Office/ Corporate Office. The voting results declared along with the report of the Scrutinizer shall also be placed on the website of the Company, viz. www.mandhana.com and on the website of CDSL and immediately after the declaration of results by the Chairman or a person authorized by him / her in writing. The voting results shall also be forwarded to the BSE Limited & the National Stock Exchange of India Limited.

12. All documents referred to in the accompanying Notice and the Explanatory Statement shall be open for inspection at the Registered Office as well as the Head Office/ Corporate Office of the Company during normal business hours (10:30 am to 2.30 pm) on all working days except Saturdays, up to and including the date of the Annual General Meeting of the Company.




Place : Mumbai Dated: 2nd December, 2016

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EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013

Item No. 3:

Appointment of Statutory Auditors to fill the casual vacancy

The Company had appointed M/s. Vishal H. Shah & Associates, Chartered Accountants, as the Statutory Auditors of the Company at 30th Annual General Meeting of the Company held on 18th September, 2014, which was ratified in the 31st Annual General Meeting of the Company held on 30th September, 2015. The aforesaid appointment (including ratification) was made to hold the office of Statutory Auditor till the conclusion of 33rd Annual General Meeting of the Company.

M/s. Vishal H. Shah & Associates, Chartered Accountants, have tendered their resignation from the post of Statutory Auditors effective 8th September, 2016, resulting into casual vacancy in the office of Statutory Auditors of the Company as envisaged by section 139(8) of the Companies Act, 2013.

The Board of Directors at its meeting held on 2nd December, 2016, pursuant to the provisions of Section 139(8) of the Companies Act, 2013, has recommended the appointment of M/s. KPND & Co., Chartered Accountants, (Firm Registration No: 133861W) as the Statutory Auditors of the Company to fill the casual vacancy, subject to the approval by the Members in the Annual General Meeting of the Company.

M/s. KPND & Co., Chartered Accountants, will be appointed from the conclusion of 32nd Annual General Meeting till the conclusion of 37th Annual General Meeting of the Company, subject to ratification of the appointment by the Members at every Annual General Meeting held after the 32nd Annual General Meeting.

The Company has received consent and eligibility certificate from M/s. KPND & Co., Chartered Accountants, to act as Statutory Auditors of the Company, along with a confirmation that, their appointment, if made, would be within the limits prescribed under the Companies Act, 2013. Accordingly, consent of the Members is sought for passing an Ordinary Resolution as set out in Item No. 3 of the Notice for appointment and payment of remuneration to the Statutory Auditors.

None of the Directors, Key Managerial Personnel of the Company and their relatives is in any way concerned or interested, financially or otherwise, in the Resolutions at

Item No. 3. The Board recommends the Resolution at Item No. 3 for approval of the Members.

Item No. 4:

Appointment of the Cost Auditor

The Board of Directors, at its meeting held on 9th September, 2016, has appointed M/s. Babulal M. Parihar & Co., Cost Accountant, as the Cost Auditor of the Company for the FY 2016-17 at remuneration of Rs.1,25,000/- (Rupees One Lakh Twenty Five Thousand Only) plus Taxes at actuals, as may be applicable, subject to the ratification by the Members at the Annual General Meeting, pursuant to Section 148 of the Companies Act, 2013 & Rule 14 of the Companies (Audit & Auditors) Rules, 2014. The resolution at Item No. 4 of the Notice is set out as an Ordinary Resolution for ratification by the members in accordance with Section 148 of the Companies Act, 2013.

None of the Directors, Key Managerial Personnel of the Company and their relatives is in any way concerned or interested, financially or otherwise, in the Resolutions at Item No. 4. The Board recommends the Resolution at Item No. 4 for approval of the Members.

Item No. 5.

Adoption of new set of Articles of Association in alignment with the provisions contained under the Companies Act, 2013

The existing Articles of Association (“AOA”) of the Company is as per Companies Act, 1956. With the enforcement of Companies Act, 2013 and rules framed thereunder, the Articles of Association needs alteration since the clauses of the existing Articles of Association refer to Companies Act, 1956 and also some of the existing clauses are not in conformity with Companies Act, 2013.

In order to have Articles of Association in accordance with the Companies Act, 2013, it is prudent to adopt a new Articles of Association since number of alterations required in existing Articles of Association are voluminous.

The new Articles of Association to be adopted is available for inspection at the Registered Office as well as the Head/Corporate Office of the Company.

In order to adopt this new set of Articles of Association, the approval of shareholders is required by way of Special Resolution. The Board, accordingly, recommends the Special Resolution as set out in the notice for approval of shareholders.

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None of the Directors, Key Managerial Personnel of the Company and their relatives is in any way concerned or interested, financially or otherwise, in the Resolutions at Item No. 5. The Board recommends the Resolution at Item No. 5 for approval of the Members.

Item No. 6.

Alteration of Memorandum of Association in alignment with the provisions contained under the Companies Act, 2013

In the light of the relevant provisions of the Companies Act, 2013, the object clause of a Company is required to state the objects for which the Company is incorporated and any matter considered necessary in furtherance thereof.

Accordingly, the Board of Directors at their meeting held on 6th December, 2016, subject to necessary approval of the Shareholders of the Company, decided to amend the object clause of Memorandum of Association of the Company to the extent relevant, so as to align the same with the requirement of the Companies Act, 2013.

Accordingly, under the proposed amendment, it is, inter‐alia, proposed to rename the sub heading III(B) from “OBJECTS INCIDENTAL OR ANCILLARY TO THE ATTAINMENT OF THE MAIN OBJECTS”, to “MATTERS WHICH ARE NECESSARY FOR FURTHERANCE OF THE MAIN OBJECTS SPECIFIED IN CLAUSE III(A)”. Further, the objects as appearing under the sub heading “OTHER OBJECTS” be shifted to the said new sub heading “MATTERS WHICH ARE NECESSARY FOR FURTHERANCE OF THE MAIN OBJECTS SPECIFIED IN CLAUSE III(A)” etc. Accordingly, the approval of shareholders of the Company is required by way of a Special Resolution for the aforesaid proposed amendment in the Memorandum of Association of the Company.

The Board, accordingly, recommends the Special Resolution as set out in the notice for approval of shareholders.

None of the Directors, Key Managerial Personnel of the Company and their relatives is in any way concerned or interested, financially or otherwise, in the Resolutions at Item No. 6. The Board recommends the Special Resolution at Item No. 6 for approval of the Members.

Item No. 7.

Change in the Name of the Company

It is proposed to change the name of the Company from “MANDHANA INDUSTRIES LIMITED” to “THE MANDHANA INDUSTRIES LIMITED”, or any other name as may be approved by the Registrar of Companies, to enhance the exclusivity of the Company, subject to the approval of the Stock Exchanges where shares of the Company are listed.

Pursuant to the provisions of section 13(2) of the Companies Act, 2013, any alteration in the name clause of Memorandum of Association of the Company shall be made only after obtaining consent of the shareholders of the Companies by passing a special resolution and pursuant to the approval of Central Government (Registrar of Companies). The name of the Company in the Memorandum and Articles of Association of the Company shall be altered to give effect to the said change of name pursuant to the approval of Members.

None of the Directors, Key Managerial Personnel of the Company and their relatives is in any way concerned or interested, financially or otherwise, in the Resolutions at Item No. 7. The Board recommends the Special Resolution at Item No. 7 for approval of the Members.

Item No. 8:

Re-appointment of Mr. Purushottam C. Mandhana as Chairman and Managing Director of the Company:

Resolution under Item No. 8 of the Notice relates to the reappointment of Mr. Purushottam C. Mandhana (holding DIN 00025633) as Chairman and Managing Director of the Company for a further period of three years from 1st April, 2016 to 31st March, 2019 and approval of his remuneration and terms of reappointment. Mr. Purushottam C. Mandhana was appointed as the Chairman and Managing Director of the Company by the members at the 29th Annual General Meeting held on 19th September, 2013 for a period of 3 years from 1st April, 2013 to 31st March, 2016.

Brief profile of Mr. Purushottam C. Mandhana as required under Secretarial Standard on General Meeting (SS-2), and Regulation 36(3) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is given herein below:

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Name of the Director

Mr. Purushottam C. Mandhana

Director Identification Number

00025633

Date of joining Board

1st October, 1993

Profile of Director Mr. Purushottam Mandhana, aged 61 years, is one of the subscribers to the Memorandum of Association of the Company. He holds a bachelor’s degree in Commerce and has over 34 years of experience in the textile industry.

Nature of expertise in specific functional areas

Mr. Purushottam C. Mandhana is well versed with different textile technologies like dyeing and processing. He has successfully set up the weaving unit and has also played a pivotal role in the modernization of process unit. Under his administrative supervision, our Company’s export division has performed consistently. He currently overseas the overall management of all the divisions of our Company.

Nature of relationships with other Directors, Manager and other Key Managerial Personnel

Mr. Purushottam C. Mandhana is uncle of Mr. Manish B. Mandhana and uncle in law of Mrs. Sangeeta M. Mandhana.

No. of Shares held in Company

21,39,681 equity shares of Rs. 10/- each as of 31st March, 2016.

Directorships and Committee memberships in other Companies (excluding Foreign and Private Companies)

*The Mandhana Retail Ventures Limited (Formerly Mandhana Retail Ventures Limited)

Mandhana - WD Limited

* Ceased to be director w.e.f.8th August, 2016

Mr. Purushottam C. Mandhana will be re-appointed as the Chairman and Managing Director of the Company for a period of 3 years from 1st April, 2016 to 31st March, 2019 on terms and conditions and remuneration as set out in the resolution hereinabove. The notice period for termination of appointment is determinable as per Company’s policy.

The Remuneration and perquisite payable to Mr. Purushottam C. Mandhana are in conformity with the applicable provisions of the Companies Act, 2013 read with Schedule V to the said Act.

The approval of the Members is being sought for the appointment and remuneration payable to Mr. Purushottam C. Mandhana, as listed in the proposed resolution. A copy of the Draft Agreement proposed between the Company and Mr. Purushottam C. Mandhana is open for inspection by the members at the Registered Office as well as the Head/ Corporate Office of the Company between 11.00 a.m. to 2.00 p.m. on any working day of the Company.

Disclosure relating to remuneration last drawn by Mr. Purushottam C. Mandhana, and the number of Meetings of the Board of Directors attended by him during the FY 2015-16 are given in the Report on Corporate Governance forming part of the Annual Report.

Mr. Purushottam C. Mandhana himself, Mr. Manish B. Mandhana and Mrs. Sangeeta Mandhana are interested in this resolution.

Save and except above, none of the other Directors, Key Managerial Personnel of the Company and their relatives, are in any way concerned or interested, financially or otherwise, in the Resolutions at Item No. 8. The Board recommends the Resolution at Item No. 8 for approval of the Members.

Item No. 9:

Re-appointment of Mr. Manish B. Mandhana as Joint Managing Director of the Company:

Resolution under Item No. 9 of the Notice relates to the reappointment of Mr. Manish B. Mandhana (holding DIN 00025449) as Joint Managing Director of the Company for a further period of three years from 1st April, 2016 to 31st March, 2019 and approval of his remuneration and terms of reappointment. Mr. Manish B. Mandhana was appointed as the Joint Managing Director of the Company by the members at the 29th Annual General Meeting held on 19th September, 2013 for a period of 3 years from 1st April, 2013 to 31st March, 2016.

Brief profile of Mr. Manish B. Mandhana as required under Secretarial Standard on General Meeting (SS-2), and Regulation 36(3) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is given herein below:

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Name of the Director Mr. Manish B. MandhanaDirector Identification Number

00025449

Date of joining Board 30th September, 1995Profile of Director Mr. Manish B. Mandhana, aged

47 years, holds a bachelor’s degree in Commerce from the Mumbai University and has over 21 years of experience in the textile industry. He is one of the subscribers to the Memorandum of Association of the Company.

Nature of expertise in specific functional areas

Mr. Manish B. Mandhana is in overall charge of the export activities of Mandhana Industries Limited. His marketing and administrative abilities have helped the Company’s export division grow rapidly. He is in sync with the latest trends in the export market and understands the taste of the foreign fashion Industry.

Nature of relationships with other Directors, Manager and other Key Managerial Personnel

Mr. Manish B. Mandhana is Nephew of Mr. Purushottam C. Mandhana and Husband of Mrs. Sangeeta M. Mandhana.

No. of Shares held in Company

22,47,649 equity shares of Rs. 10/- each as of 31st March, 2016.

Directorships and Committee memberships in other Companies (excluding Foreign and Private Companies)

*The Mandhana Retail Ventures Limited (Formerly Mandhana Retail Ventures Limited)

Mandhana - WD Limited

#Nutech Global Limited

@Breakbounce India Limited

* Ceased to be director w.e.f.8th August, 2016# Ceased to be director w.e.f.28th September, 2016@ Ceased to be director w.e.f.25th August, 2016

Mr. Manish B. Mandhana will be re-appointed as the Joint Managing Director of the Company for a period of 3 years from 1st April, 2016 to 31st March, 2019 on terms and conditions and remuneration as set out in the resolution hereinabove. The notice period for termination of appointment is determinable as per Company’s policy.

The Remuneration and perquisite payable to Mr. Manish B. Mandhana are in conformity with the applicable provisions of the Companies Act, 2013 read with Schedule V to the said Act.

The approval of the Members is being sought for the appointment and remuneration payable to Mr. Manish B. Mandhana, as listed in the proposed resolution. A copy of the Draft Agreement proposed between the Company and Mr. Manish B. Mandhana is open for inspection by the members at the Registered Office as well as the Head/ Corporate Office of the Company between 11.00 a.m. to 2.00 p.m. on any working day of the Company.

Disclosure relating to remuneration last drawn by Mr. Manish B. Mandhana, and the number of Meetings of the Board of Directors attended by him during the FY 2015-16 are given in the Report on Corporate Governance forming part of the Annual Report.

Mr. Manish B. Mandhana, himself, Mr. Purushottam C. Mandhana and Mrs. Sangeeta M. Mandhana are interested in this resolution.

Save and except above, none of the other Directors, Key Managerial Personnel of the Company and their relatives, are in any way concerned or interested, financially or otherwise, in the Resolutions at Item No. 9. The Board recommends the Resolution at Item No. 9 for approval of the Members.




Place : Mumbai Dated: 2nd December, 2016

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DIRECTORS’ REPORTDear Shareholders,

The Directors have the pleasure in presenting the 32nd Annual Report and the Audited Accounts of the Company for the year ended 31st March, 2016.

FINANCIAL HIGHLIGHTS1

(Rupees in Lac)

2016 2015

Total Turnover 164,660.61 154,293.01

Other Income 702.79 656.17

Profit Before Interest, Depreciation and Taxation 24,964.08 23,367.30

Less: 1. Interest 11,729.21 9,701.26

2. Depreciation 4,013.60 3764.42

Profit Before Taxation 9,221.27 9,901.62

Less: Provision for Taxation

Current Tax 3.218.28 3,353.19

Deferred Tax 220.93 150.74

Net Profit for the Year 5,782.07 6,397.68

Less: Income Tax paid for earlier year 69.07 125.42

Profit after Taxation 5,713.00 6,272.26

Add: Balance of Profit from earlier years 33,952.16 29,341.58

Amount available for Appropriations 39,665.16 35,613.85

Add: Transfer from Debenture Redemption Reserve 475.00 100.00

Less: Dividend (Proposed)2 662.48 662.48

Tax on distributed Profits2 134.88 134.89

Transitional provision for depreciation as per schedule II of the Companies Act, 2013 (Net of Deferred Tax Liability) - 164.32

Transfer to General Reserve - 800.00

Balance carried forward 39,342.80 33,952.16

Note: 1. The Hon’ble High Court of Judicature at Bombay had vide its order dated 29th March, 2016 effective from 1st April, 2016,

approved the Scheme of Arrangement (“Scheme”) between Mandhana Industries Limited (“MIL”) and The Mandhana Retail Ventures Limited (“MRVL”) and their respective Shareholders and Creditors, pursuant to which the Retail Business of MIL has been demerged and transferred into MRVL from the appointed date viz. 1st April, 2014. Consequent of the demerger, the financial figures of the discontinued Retail Business of MIL is not included for current as well as previous period.

2. Please refer Dividend section forming part of the Directors’ Report.

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COMPANY PERFORMANCE AND BUSINESS OVERVIEW

During the year under review, the textiles and garments segment grew at a rate of 6.18% and 12.54% respectively, which resulted in your company achieving sales of Rs. 164,660.61 Lac, reflecting a growth of approximately 6.72% over the last fiscal. EBIDTA margin has marginally increased to 14.73% vis-à-vis 14.72%. The net profit for the year has decreased because of the increase in the interest expenses and longer working capital cycle, it has decreased from Rs. 6,272.26 Lac to Rs. 5,713.00 Lac. The margins for both the segments have become more competitive.

The management has taken several measures to ensure better management of working capital, monitoring of project performance on continuous basis and completion of projects as per schedule to avoid cost and time over run.

A detailed discussion of operations for the year ended 31st March, 2016 is provided in the Management Discussion and Analysis Report, which is presented in a separate section forming part of this Annual Report.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR 2015-16

During the year under review, the Hon’ble High Court of judicature at Bombay had, vide its order dated 29th March, 2016 sanctioned the Scheme of Arrangement (“Scheme”) between Mandhana Industries Limited (“MIL/ Company”) and The Mandhana Retail Ventures Limited (formerly Mandhana Retail Ventures Limited) (“MRVL”) and their respective shareholders and creditors under Section 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956. Pursuant to the Scheme, the retail business of MIL has been demerged and transferred into MRVL with effect from the Appointed Date i.e. 1st April, 2014.

DIVIDEND

In view of supplication of proposed Strategic Debt Restructuring, the Board of the Directors has rescinded the dividend recommended for the financial year ended 31st March, 2016.

CORPORATE GOVERNANCE

Reports on Corporate Governance and Management Discussion and Analysis, in accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), along with a certificate from Auditors regarding compliance of the Corporate Governance are given separately in this Annual Report.

All Board members and senior management personnel have affirmed compliance with the code of conduct for the year 2015-16. A declaration to this effect signed by

the Chairman and Managing Director of the Company is contained in this annual report.

PUBLIC DEPOSIT

Your Company has not accepted any public deposits under Chapter V of Companies Act, 2013.

NON CONVERTIBLE DEBENTURES (NCDs)

An aggregate amount of Rs. 19,00,00,000/- (Rupees Nineteen Crore only) towards Secured Redeemable Non-Convertible Debentures (NCDs) issued by the Company, has been redeemed during the year 2015-16 in accordance with terms of the issue of the NCDs. The details of outstanding NCDs as on 31st March, 2016 are provided in annexure to Note No. 3 on Long Term Liabilities forming part of Financial Statements contained in the Annual Report.

IDBI Trusteeship Services Limited is the Debenture Trustee for the Debenture holders whose details are provided in the Corporate Governance Section of the Annual Report.

The applicable listing fees have been paid to the stock exchanges.

DIRECTORS

In accordance with the provisions of the Companies Act, 2013, Mr. Manish B. Mandhana retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. The information as required to be disclosed under Regulation 36(3) of Listing Regulations, in case of re-appointment of directors, is provided in the notice of the ensuing annual general meeting. The Board of Directors has recommended his reappointment for consideration of the shareholders.

Mr. Biharilal C. Mandhana has resigned as a Director of the Company with effect from 10th June, 2016 on account of his ailing health. The Company places on record the valuable contribution of Mr. Biharilal C. Mandhana during his extensive tenure as Director with the Company.

Mr. Ghyanendra Nath Bajpai, Mr. Khurshed M. Thanawalla, Mr. Dilip G. Karnik and Mr. Prashant Asher have resigned as the Directors of the Company with effect from 25th June, 2016, 7th September, 2016, 27th June, 2016 and 7th September, 2016 respectively. Mr. Khurshed M. Thanawalla resigned as a Director of the Company in view of his decision to reduce his work and his formal business commitments. Mr. Ghyanendra Nath Bajpai, Mr. Dilip G. Karnik and Mr. Prashant Asher has tendered their resignation on account of their pre-occupations and prior commitments. The Company places on record the valuable contribution made by all the aforesaid Directors

21


during their tenure as Directors with the Company.

The Company is in the process of identifying suitable and experienced persons to be appointed for the office of the Independent Directors and is expected to finalise the persons to hold the said offices in the coming days.

For the year 2015-16, the Company has received declarations from all its erstwhile Independent Directors, confirming that they meet the criteria of independence as mentioned under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges and relevant provisions of the Listing Regulations.

BOARD EVALUATION

Evaluation of performance of all Directors is undertaken annually. The Company has implemented a system of evaluating performance of the Board of Directors and of its Committees and individual Directors on the basis of a structured questionnaire which comprises evaluation criteria taking into consideration various performance related aspects.

The Board of Directors has expressed their satisfaction with the evaluation process.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the year 4 Board Meetings were convened and held, details of which are given in the Corporate Governance Report section.

VIGIL MECHANISM / WHISTLE BLOWER POLICY FOR DIRECTORS AND EMPLOYEES

The Company has established a Vigil Mechanism, which includes a Whistle Blower Policy, for its Directors and Employees, to provide a framework to facilitate responsible and secure reporting of concerns of unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct & Ethics. The Whistle Blower Policy is posted on the website of the Company and the web-link to the same is http://www.mandhana.com/investorRelation.php

AUDIT COMMITTEE

The Audit Committee for the Financial Year ended 31st March, 2016 comprised of five members viz. 4 Independent Directors and 1 Executive Director, given as under:

1. Mr. Khurshed M. Thanawalla - Chairman*2. Mr. Ghyanendra Nath Bajpai*3. Mr. Prashant K. Asher*4. Mr. Dilip G. Karnik*5. Mr. Purushottam C. Mandhana

*Mr. Ghyanendra Nath Bajpai, Mr. Khurshed M. Thanawalla, Mr. Dilip G. Karnik and Mr. Prashant K. Asher have ceased to be Directors and consequently as members of the Audit Committee with effect from 25th June, 2016, 7th September, 2016, 27th June, 2016 & 7th September, 2016, respectively.

Further details on the Audit Committee are provided in the Corporate Governance Section.

NOMINATION AND REMUNERATION POLICIES

The Board of Directors has formulated a Policy which lays down a framework for selection and appointment of Directors and Senior Management and for determining qualifications, positive attributes and independence of Directors.

The Board has also formulated a Policy relating to remuneration of Directors, members of Senior Management and Key Managerial Personnel.

Details of the Nomination and Remuneration Policy are given under Annexure - ‘D’ to this Report.

RISK MANAGEMENT POLICY

The Company has a robust Risk Management framework to identify, measure and mitigate business risks and threats. This framework seeks to create transparency, minimize adverse impact on the business objective and enhance the Company’s competitive advantage. This risk framework thus helps in managing market, credit and operations risks and quantifies exposure and potential impact at a Company level.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

No loans, guarantees or Investments covered under sections 186 of the Companies Act, 2013, have been given or provided during the year.

RELATED PARTY TRANSACTIONS

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in ordinary course of business and on arm’s length basis. During the year, the Company had not entered into any contract/arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable.

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Prior omnibus approval of the Audit Committee has been obtained on an annual basis for transactions with related parties which are of a foreseeable and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted and a statement giving details of all transactions with related parties are placed before the Audit Committee for their review on a periodic basis.

MANAGERIAL REMUNERATION

Remuneration to Directors and Key Managerial Personnel

i. The percentage increase in remuneration of each Director and Company Secretary during FY2015-16, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for FY 2015-16 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

Sr. No.

Name of Director /KMP and Designation

Remuneration of Director/ KMP for FY

2015-16 (In Rupees)

% increase in remuneration in FY 2015-16

Ratio of remuneration

of each Whole-Time Director

to median remuneration of employees

Comparison of the

remuneration of KMP against

Company’s performance

1 Mr. Purushottam C. Mandhana -Chairman & Managing Director

2,43,99,600 0% 214.96 Profit after tax for FY 2015-16 is Rs. 5,782.07 Lac

as against Rs. 6,397.68 Lac in

FY 2014-15.

2 Mr. Biharilal C. Mandhana - Executive Director

73,83,600 0% 65.05

3 Mr. Manish B. Mandhana - Joint Managing Director

1,70,91,600 0% 150.58

4 Mrs. Sangeeta M. Mandhana- Non-Executive Director

50,000 N.A. N.A. N.A.

5 Mr. Ghyanendra Nath Bajpai-Independent Director*

4,75,000 N.A. N.A. N.A.

6 Mr. Khurshed M. Thanawalla - Independent Director*

5,00,000 N.A. N.A. N.A.

7 Mr. Dilip G. Karnik - Independent Director*

3,75,000 N.A. N.A. N.A.

8 Mr. Prashant K. Asher - Independent Director*

4,50,000 N.A. N.A. N.A.

9 Mr. Vinay Sampat – Vice President – Legal & Company Secretary

23,54,028 17.60% N.A. Profit after tax for FY 2015-16 is Rs. 5,782.07 Lacs

as against Rs. 6,397.68 Lacs in

FY 2014-15.

*Mr. Ghyanendra Nath Bajpai, Mr. Khurshed M. Thanawalla, Mr. Dilip G. Karnik and Mr. Prashant K. Asher has ceased to be Directors with effect from 25th June, 2016, 7th September, 2016, 27th June, 2016 & 7th September, 2016, respectively.

Note : Remuneration paid to each Whole-Time Director and KMP includes Salary, allowances, company’s contribution to provident fund and monetary value of perquisites, if any. The remuneration paid to Non-Executive and/or Independent Directors comprises of sitting fees only.

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ii. The median remuneration of employees of the Company for the financial year ended 31st March, 2016 was Rs. 1,13,508/-;

iii. In the financial year under review, there was an increase of 9.67% in the median remuneration of employees;

iv. There were 7,570 permanent employees on the rolls of the Company as on 31st March, 2016;

v. Average percentage decline in the salaries of employees other than the managerial personnel in the last financial year i.e. FY2015-16 was 1.37% as compared to FY 2014-15. No change has happened in the Managerial Remuneration as regards comparison of Managerial Remuneration over the said periods.

vi. It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

STATUTORY AUDITORS AND AUDITORS’ REPORTM/s. Vishal H. Shah & Associates, Chartered Accountants stepped down as the Statutory Auditors of the Company w.e.f. 8th September, 2016 on account of their pre-occupation.

Subsequently, in accordance with Sec 139 of the Companies Act, 2013, the Board of Directors of the Company in its meeting held on 2nd December, 2016 has recommended M/s. KPND & Co., Chartered Accountants (FRN: 133861W), to act as Statutory Auditors of the Company for a period of 5 years to hold office until the conclusion of the 37th Annual General Meeting of the Company in calendar year 2021. In accordance with the provisions of Section 139, 142 and other applicable provisions of the Companies Act, 2013 and of the Companies (Audit and Auditors) Rules, 2014, the appointment of the Statutory Auditors is required to be ratified by the shareholders at every Annual General Meeting during their tenure. M/s. KPND & Co., Chartered Accountants, have confirmed that they are eligible to act as the Statutory Auditors.

With regard to the outstanding Tax liability, the payment got delayed in view of the tax implications involved in contemplation of demerger of Retail Business of the Company to MRVL. Since, the demerger of the retail Business of the Company was approved by the Hon’ble High Court of Judicature at Bombay vide its order dated 29th March, 2016, effective from 1st April, 2016, the said Income Tax Liability was to be segregated and paid based on the respective revised Income Tax Returns of both, the Demerged and Resulting Companies separately. With regard to delay in repayment of dues to the bank, as mentioned in the Auditor’s Report, we hereby state that

the Bank of Baroda (lead Bank) has accorded its in-principle approval for supplication of Strategic Debt Restructuring (SDR) of the Company and majority of members bank have agreed to such invocation of SDR. The other statements made by the Auditors in their Report are self - explanatory and do not call for any further comments.

COST AUDIT REPORTM/s. Babulal M. Parihar & Co., Cost Accountants have been duly appointed as Cost Auditors by the Board of Directors for conducting Cost Audit in respect of products manufactured by the Company which are covered under the Cost Audit Rules for current financial year ending 31st March, 2017. They were also the Cost Auditor for the previous financial year ended 31st March, 2016. As required by Section 148 of the Companies Act, 2013, necessary resolution has been included in the Notice convening the Annual General Meeting, seeking ratification by Members to the remuneration proposed to be paid to the Cost Auditors for the financial year 31st March, 2016.

The Company has filed the Cost Audit Report for the year ended 31st March, 2016 with the Central Government within the prescribed time.

SECRETARIAL AUDIT REPORTPursuant to the provisions of Section 204 of the Companies Act, 2013, and the Rules made thereunder, the Company has appointed Mr. Nitin R. Joshi, Practicing Company Secretary (Certificate of Practice No. 1884 and Membership No.FCS-3137) as the Secretarial Auditor of the Company. The Secretarial Audit Report is annexed as Annexure - ‘E’ and forms an integral part of this Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Mr. Purushottam C. Mandhana, Chairman & Managing Director possesses extensive proficiency for financial and risk management operations garnered through his association with the Company from its inception and vast experience in the textile industry. He also heads the Finance Department of the Company and performing required duties and functions of a Chief Financial Officer.

CORPORATE SOCIAL RESPONSIBILITYThe Annual Report on Corporate Social Responsibility activities for FY 2015-16 is enclosed as Annexure – ‘C’.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has no subsidiary, Joint Venture and Associate Company as on 31st March, 2016.

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SIGNIFICANT EVENTS AFTER BALANCE SHEET DATE

The Company had entered into global exclusive Brand License Agreement with “Being Human - The Salman Khan Foundation” on 23rd December, 2010 effective from 1st January, 2011 to use trademark & logo of “Being Human” for all clothes range/clothing lines. Post approval of the Scheme, the Company and The Salman Khan Foundation agreed to terminate the erstwhile Brand License Agreement vide Termination Agreement dated 24th August, 2016 and simultaneously MRVL has entered into global exclusive Trademark License Agreement on even date to design, manufacture, retail and distribute men’s wear, women’s wear and accessories under “Being Human” trademark.

In terms of the Scheme, MRVL were required to issue and allot to each of the eligible members of MIL whose name was recorded as beneficial owners in depositories at the close of working hours on 23rd September, 2016 (“Record Date”) and as shareholders in the register of members of MIL as on that date in the ratio of 2 equity shares of MRVL for every 3 equity shares held by the equity shareholder in MIL. Accordingly, the Board of Directors of MRVL had on 27th September, 2016 allotted Equity Shares to those shareholders of MIL whose names appeared in the Register of Members as on the Record Date mentioned herein above.

Majority of the consortium of lenders from whom the Company has raised term loan/working capital have agreed to invoke Strategic Debt Restructuring on 26th October, 2016 considering 24th June, 2016 as a reference date subject to receiving in-principle approval from their respective sanctioning authorities.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has adequate internal financial controls in place with reference to financial statements. These are continually reviewed by the Company to strengthen the same wherever required. The internal control systems are supplemented by internal audit carried out by an independent firm of Chartered Accountants and periodical review by management. The Audit Committee of the Board addresses issues raised by both, the Internal Auditors and the Statutory Auditors.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under sub section (3)(c) and (5) of Section 134 of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, it is hereby confirmed that;

i) in the preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

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

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual financial statements on a going concern basis;

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

vi) 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.

PARTICULARS OF EMPLOYEESDetails of employee remuneration as required under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in Annexure - A forming part of this Report.

PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE AND OUTGOParticulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as per section 134(3)(2) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 for the year ended March 31, 2015 are provided under Annexure – ‘B’ to this report.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 is provided under Annexure - ‘F’ forming part of this Report.

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OTHERS

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. The details relating to deposits, covered under Chapter V of the Act, since neither has the Company accepted deposits during the year under review nor were there any deposits outstanding during the year.

2. Details relating to issue of equity shares including sweat equity shares, stock options, and shares with differential rights as to dividend, voting or otherwise, since there was no such issue of shares.

3. None of the Whole-Time Directors of the Company received 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.

Your Directors further state that during the year under review, there were no cases filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

The Directors take this opportunity to thank the Shareholders, Financial Institutions, Banks, Customers, Suppliers, Regulators, Government Authorities - Central and State Government & Local.

The Directors also wish to place on record their appreciation of the employees at all levels for their hard work, dedication and commitment.

For and on behalf of the Board of Directors

PURUSHOTTAM C. MANDHANA(Chairman and Managing Director)


ANNEXURE – ‘A’ to Directors’ ReportStatement pursuant to Section 197 of the Companies Act, 2013 and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Name & Designation Yearly Remuneration Received (Rs.)

Natures of Employment

Qualification and

Experience

Date of commencement of employment

Age Particulars of last

employmentMr. Purushottam C. Mandhana(Chairman and Managing Director)

2,43,99,600/- Contractual B.Com(36 Years)

01-04-1994 61-

Mr. Manish B. Mandhana(Joint Managing Director)

1,70,91,600/- Contractual B.Com(19 Years )

30-09-1995 48 Mandhana Exports Private Limited

Notes:1. Remuneration includes Salary, allowances, Company’s contribution to provident fund and monetary value of

perquisites, if any. 2. Nature of employment is contractual. Other terms and conditions are as per the company’s Rules.3. The Directors mentioned hereinabove are related to each other.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS


Place : MumbaiDated : 2nd December, 2016

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ANNEXURE – ‘B’ to Directors’ ReportConservation of Energy, Technology absorption, Foreign Exchange Earning and Outgo - Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988

CONSERVATION OF ENERGY:

The Company has always been conscious of the need for conservation of energy and has been sensitive in making progress towards this initiative. Various energy conservation measures have been taken at all the plants and offices. With the efforts put in by the Company for conservation of energy and effective measures adapted for the same, the energy consumption has reduced marginally.

The Company constantly improves on and installs various energy saving devices. The Company replaces old electrical drives and has been re-organizing production process by introducing improved systems which also conserves energy.

TECHNOLOGY ABSORPTION:

1. RESEARCH AND DEVELOPMENT

Your Company, committing itself Research & Development activities, has always played an imperative role for cost-effective expansion of business development. Research & Development has been implemented with objectives like continual efficiency enhancement, reductions in material costs, improving speed and quality of processes and innovation. The Design Department of the Company is constantly developing original designs to match the need of the customers in the wholesale and retail segment in this ever changing fashion world. The Company has always been conscious of the need for conservation of energy and has been sensitive in making progress towards this initiative.

2. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

The Company continues to integrate the latest proficient technology, innovations and improvement as introduced and suitable to the manufacturing operations carried out by the Company. It also adopts and up-grades its technology to sustain and presence in the domestic and international market.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Earnings : Rs. 23,817.99 LacOutgo : Rs. 1,539.31 Lac




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ANNEXURE – ‘C’ to Directors’ ReportAnnual Report on Corporate Social Responsibility activities for the financial year 2015-16

1. A brief outline of the Company’s Corporate Social Responsibility (CSR) policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs

India faces enormous challenges in provision of basic public services to large parts of the population, both in rural and urban centers. A lot of ground is to be covered in improving the quality of these services, albeit at a reasonable cost. There is also a growing realization that complex and seemingly insurmountable social problems cannot be solved by individual organizations or a single stakeholder group. It requires different parts of the ecosystem such as funders, government, non-profits, corporates and media to work collaboratively to create long-term social change.

In doing so, Mandhana Industries Limited (MIL) believes that - (a) It can play a meaningful role in bringing professionalism, leadership and discipline to projects in pursuit of Corporate Social Responsibility, (b) Innovation can play a crucial role in developing ‘out of the box’ solutions to seemingly intractable problems and (c) It is crucial that any solution backed by the Company has the potential to achieve scale and be replicable across large geographies of India. In doing so, the Company actively seeks partnerships, with government and private entities, in an open source relationship that seeks to maximize the impact of its solutions.

CSR has become mandatory from FY 2014-15 under the Companies Act, 2013. However, the Company has been pursuing CSR initiatives even before it was mandated by law.

MIL’s CSR initiatives aim to create solutions to some of India’s most pressing challenges. It envisages transforming Health, Education, Water and Social Sector Ecosystems through high impact solutions, thought leadership and partnerships.

Some of the CSR initiatives being pursued by MIL are:

The Company has proposed to promote ‘health care including preventive health care’ towards its Corporate Social Responsibility in collaboration with ‘Being Human – The Salman Khan Foundation’ and one or more other trusts meeting the criteria as delineated under Section 135 of the Companies Act, 2013 and the rules framed thereunder.

Web link to CSR Policy: http://www.mandhana.com/investorRelation.php

2. Composition of the CSR Committee

Name CategoryMr. Dilip G. Karnik – Chairman* Non - Executive and Independent DirectorMr. Ghyanendra Nath Bajpai* Non - Executive and Independent DirectorMr. Khurshed Thanawalla* Non - Executive and Independent DirectorMr. Purushottam C. Mandhana Executive Director

*Mr. Ghyanendra Nath Bajpai, Mr. Khurshed M. Thanawalla & Mr. Dilip G. Karnik have ceased to be Directors and consequently as members of the CSR Committee with effect from 25th June, 2016, 7th September, 2016 & 27th June, 2016, respectively.

The composition of the Committee is in compliance with Section 135 of the Companies Act, 2013.

3. Average net profit of the Company for last three financial years

Rs. 10,125.88 Lac.

4. Prescribed CSR Expenditure

Rs. 202.52 Lac representing 2% of the Average Net Profit of the Company for the last three financial years.

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5. Details of CSR spent during the financial year:

(a) Total amount spent for the financial year – Rs. 100 Lac.

(b) Amount unspent, if any – 102.52 Lac.

(c) Manner in which the amount spent during the financial year:

(1) (2) (3) (4) (5) (6) (7) (8)Sr. No.

CSR Project / Activity identified

Sector in which the Project is covered

Locations Amount outlay

(budget) project or

program wise

Amount spent on the projects or programs

Cumulative expenditure

up to the reporting

period

Amount spent directly

or through Implementing

Agency1. Little Heart

ProgramHealth Care

Mumbai, Jaipur & Delhi

Not Available Rs. 30,51,661/- Rs. 30,51,661/- Implementing Agency – Being Human – The Salman Khan Foundation

2. Preventable Blindness Program

Health Care

Murbad, Mochiwadi, Patna, Gorakhpur & Sardar Nagar

Not Available Rs. 9,30,507/- Rs. 9,30,507/- Implementing Agency – Being Human – The Salman Khan Foundation

6. In case the Company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the Company shall provide the reasons for not spending the amount in its Board Report.

The Company has already spent sizeable amount towards various CSR activities during the year. The Company is evaluating more CSR programs, activities and initiatives for further CSR spending.

7. Responsibility Statement of the Corporate Social Responsibility Committee

The implementation and monitoring of Corporate Social Responsibility (CSR) Policy, is in compliance with CSR objectives and Policy of the Company.




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ANNEXURE – ‘D’ to Directors’ ReportNOMINATION AND REMUNERATION POLICY

1. PREAMBLE

1.1 Mandhana Industries Limited (the ‘Company’) recognizes the importance of attracting, retaining and motivating personnel of high calibre and talent for the purpose of ensuring efficiency and high standard in the conduct of its affairs and achievement of its goals besides securing the confidence of the shareholders in the sound management of the Company. For the purpose of attaining these ends, the Company has constituted a Nomination and Remuneration Committee which is entrusted with the task of devising a transparent reasonable and fair policy of remuneration for its directors, key managerial personnel and other employees.

1.2 The Companies Act, 2013 vide sub-section (3) of section 178, the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement as amended by the Securities and Exchange Board of India vide Master Circular dated April 17, 2014 makes it mandatory for the Board of Directors of every listed company to constitute a Nomination and Remuneration Committee.

1.3 The objective of the Nomination and Remuneration Committee is to assist the Board of Directors of the Company and its controlled entities in fulfilling its responsibilities to shareholders by :

1.3.1 ensuring that the Board of Directors is comprised of individuals who are best able to discharge the responsibilities of directors in consonance with the Companies Act, 2013 and the norms of corporate governance contained in the Companies (Corporate Social Responsibility Policy) Rules, 2014; and

1.3.2 ensuring that the nomination processes and remuneration policies are equitable and transparent.

1.4 The responsibilities of the Nomination and Remuneration Committee include:

1.4.1 formulating a criteria for determining qualifications, positive attributes and independence of a director;

1.4.2 recommending to the Board of Directors a policy, relating to the remuneration for the directors, key managerial personnel and senior management employees;

1.4.3 formulating a criteria for evaluation of performance of Independent Directors and the Board of Directors and on the basis of the report of performance evaluation, it shall be determined whether to extend or continue the term of appointment of the independent director;

1.4.4 devising a policy on Board diversity; and

1.4.5 identifying persons who are qualified to become directors and who may be appointed as part of the ‘senior management’ or core management team of the Company in accordance with the criteria laid down, and recommending to the Board of Directors the appointment and removal of such personnel.

1.5 This Nomination and Remuneration Policy has been formulated with a view to :

1.5.1 devise a transparent system of determining the appropriate level of remuneration throughout all levels of employees and teams in the Company;

1.5.2 encourage personnel to perform to their highest level;

1.5.3 provide consistency in remuneration throughout the Company;

1.5.4 offer incentives on the premise of aligning the performance of the business with the performance of key employees and teams within the Company; and

1.5.5 set out the approach to diversity on the Board as delineated in the Annexure to this Policy.

1.6 The Nomination and Remuneration Policy elucidates the types of remuneration to be offered by the Company and factors to be considered by the Board of Directors of the Company, Nomination and Remuneration Committee and management of the Company in determining the appropriate remuneration policy for the Company.

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1.7 The Nomination and Remuneration Policy applies to the Company’s senior management employees, including its Key managerial personnel and Board of Directors.

2. DEFINITIONS

Some of the key terms used in the Nomination and Remuneration Policy are as under:

2.1 ‘Board’ means the Board of Directors of Mandhana Industries Limited or the Company.

2.2 ‘Committee’ means the Nomination and Remuneration Committee constituted by the Board of Directors of the Company in accordance with Section 178 of the Companies Act, 2013.

2.3 ‘Director’ means a director appointed on the Board of the Company including executive; non-executive; and independent directors.

2.4 ‘Employee’ means every senior management employee, including Key managerial personnel and directors on the Board.

2.5 ‘Key managerial personnel’ includes managing director, or Chief Executive Officer or manager and in their absence, a whole-time director; company secretary; and Chief Financial Officer.

2.6 ‘Member’ means a director of the Company appointed as member of the Committee.

2.7 ‘Nomination and Remuneration Policy’ shall mean the policy of remuneration of directors, key managerial personnel and other employees of the Company determined by the Nomination and Remuneration Committee.

2.8 ‘Senior management’ or ‘Senior management employees’ means the personnel of the company who are members of its core management team excluding Board of Directors comprising all members of management one level below the executive directors, including the functional heads.

3. NOMINATION AND REMUNERATION COMMITTEE

3.1 The Committee shall be formed by the Board of the Company. It shall consist of three or more non-executive directors out of which not less than one-half shall be independent directors. The Board of the Company shall nominate directors as Members of the Committee from time to time.

3.2 The Chairman of the Committee shall be an independent director but shall not be the Chairperson of the Company. He shall be present

at the Annual General Meeting, to answer the shareholders’ queries and may determine as to who should answer the queries.

3.3 The presently nominated members of the Committee are :

(1) Mr. Khurshed M. Thanawalla (Chairman)

(2) Mr. Ghyanendra Nath Bajpai

(3) Mr. Dilip Karnik

(4) Mr. Prashant Asher

4. LETTER OF Appointment OR CONTRACT OF EMPLOYMENT

4.1 The Company shall issue a Letter of Appointment to Non-executive directors setting out the terms and conditions, if any and the same shall be approved by the Board in consonance to the provision of the Companies Act, 2013 and applicable clauses of the Listing Agreements and any amendments thereto.

4.2 Executive directors, key managerial personnel and senior management employees shall enter into a contract with the Company or a Letter of Appointment shall be issued by the Company clearly setting out the terms and conditions of the remuneration package for such person. The contract of employment/Letter of Appointment may set out the expectations for the performance, the key performance indicators, measures and criteria for assessment or evaluation of performance.

4.3 The Committee and the Board shall approve the contracts of employment/letter of appointment of directors and Key Managerial Personnel. For senior management employees, such appointments shall be considered and approved by the Managing Director of the Company and brief particulars of such appointment(s) made by the Managing Director shall be placed before the Committee at regular intervals for its noting and ratification.

The Board shall disclose the terms and conditions of any contract of employment/letter of appointment in accordance with the law.

5. REMUNERATION STRUCTURE

5.1 REMUNERATION TO DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board shall, in consultation with the Committee approve and finalize the forms of remuneration to be offered to directors and key managerial personnel.

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The remuneration package shall be composed of amounts that are fixed and variable and the endeavour of the Board and the Committee shall be to strike a balance between the fixed and variable components and thereby promote sustainable value for the Company and its shareholders over time.

5.1.1 Fixed Remuneration

The contract of employment / letter of appointment entered into by the executive directors / key managerial personnel with the Company shall demarcate the cost to the Company, fixed gross salary or base salary payable to the employee. The fixed remuneration or salary shall be determined according to complexities of the position and role of the executive directors / key managerial personnel, the relevant laws and regulations, conditions prevalent in the labour market and the scale of the business relating to the position. The fixed remuneration will reflect the core performance requirements and expectations of the Company.

5.1.2 Performance Based Remuneration or Incentive-Based Payments

The performance-based or incentive-based payments may form part of the variable component of the salary payable to the executive directors / key managerial personnel. In addition to the fixed remuneration, the Company shall implement a system of bonuses and incentives reflecting short and long term performance objectives appropriate to the working of the Company and designed to lay emphasis on the direct relationship between performance and remuneration. Performance based remuneration shall be proportionate to and contingent upon the attainment of specific performance targets by executive directors / key managerial personnel in the Company. Incentive-based payments take into account factors such as performance of the executive directors / key managerial personnel, his conduct, responsibilities, position and role and shall be calculated as a percentage of the fixed remuneration.

5.1.3 Severance Fees or Termination Benefits

Each contract of employment / letter of appointment entered into by the executive directors and key managerial personnel with the Company may demarcate in advance the entitlement to payment upon termination of employment for each employee. Making of such payments shall be approved by the Board and the Committee and shall be in consonance with the Nomination and Remuneration Policy of the Company.

5.1.4 Employee Benefits

The Company shall comply with all legal and industrial obligations in determining the benefits available with employees, namely short-term benefits such as salaries, social security contributions, profit sharing and bonuses, post-employment benefits such as gratuity, pension retirement benefits, post-employment life insurance and post-employment medical care; other long-term employee benefits, including long-service leave, long-term disability benefits and termination benefits.

5.2 REMUNERATION TO NON-EXECUTIVE DIRECTORS

The Non-executive directors shall be paid sitting fees for attending each of the Meetings of the Board of Directors and Committees as may be approved by the Board of Directors from time to time. The Non-executive directors may be paid commissions and other benefits as may be prescribed by the Board of Directors in conformity of the applicable provisions of the Companies Act, 2013 and rules notified thereunder from time to time.

6. DISCLOSURES

6.1 The Nomination and Remuneration Policy shall be disclosed in the Board’s report of the Company prepared in accordance with sub-section (3) of section 134 of the Companies Act, 2013.

6.2 The Nomination and Remuneration Policy and the criteria for evaluation of performance or evaluation criteria as laid down by the Committee shall be disclosed in the Annual Report of the Company.

6.3 Payments to non-executive directors shall be either disclosed in the Annual Report of the Company or put up on the website of the Company and reference

32


drawn thereto in the Annual Report. Further, the number of shares and convertible instruments held by non-executive directors shall be disclosed by the Company in its Annual Report.

6.4 With regard to payment of remuneration, the section on the corporate governance of the Annual Report of the Company shall contain the following disclosures, namely :

6.4.1 All elements of remuneration package of individual directors summarized under major groups, such as salary, benefits, bonuses, stock options, pension etc;

6.4.2 Details of fixed component and performance linked incentives, along with the performance criteria;

6.4.3 Service contracts, notice period, severance fees; and

6.4.4 Stock option details, if any - and whether issued at a discount as well as the period over which accrued and over which exercisable.

7. REVIEW AND IMPLEMENTATION

7.1 The Managing Director shall conduct an evaluation of performance for senior management employees on an annual basis to monitor and review, and if necessary, revise the appropriateness of each remuneration package.

7.2 The Committee shall be responsible for monitoring the implementation of the Nomination and Remuneration Policy, conducting a review of the same from time to time and advising the Board on the mode of revision of the policy such as inclusion of long-term incentives that would contribute towards creating a sustainable value for shareholders of the Company.

8. AMENDMENT

The Board of Directors reserves the right to amend or modify the Nomination and Remuneration Policy in whole or in part, at any time without assigning any reason whatsoever. However, no such amendment or modification will be binding on the employees, key managerial personnel and senior management employees unless the same is notified to them in writing.

Annexure BOARD DIVERSITY POLICY

1. PURPOSE

This Board Diversity Policy (‘Policy’) sets out the approach to diversity on the Board of Directors (‘Board’) of Mandhana Industries Limited (‘MIL’/’the Company’).

2. SCOPE

This Policy applies to the Board. It does not apply to employees generally.

3. POLICY STATEMENT

MIL recognizes and embraces the importance of a diverse Board in its success. MIL believes that a truly diverse Board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will ensure that the Company retains its competitive advantage.

MIL believes that a diverse Board will contribute to the achievement of its strategic and commercial objections, including to:

Drive business results;

Make corporate governance more effective;

Enhance quality and responsible decision making capability;

Ensure sustainable development; and

Enhance the reputation of the Company.

The Nomination and Remuneration Committee (‘Committee’) is responsible for reviewing and assessing the composition and performance of the Board, as well as identifying appropriately qualified persons to occupy Board positions.

While all appointments to the Board will continue to be made on merit, the Committee will consider the benefits of diversity (including but not limited to the attributes listed above) in identifying and recommending persons for Board membership, as well as in evaluating the Board and its individual members.

Further, the Committee will ensure that no person is discriminated against on grounds of religion, race, gender, pregnancy, childbirth or related medical conditions, national origin or ancestry, marital

33


status, age, sexual orientation, or any other personal or physical attribute which does not speak to such person’s ability to perform as a Board member.

Accordingly, the Committee shall:

Assess the appropriate mix of diversity, skills, experience and expertise required on the Board and assess the extent to which the required skills are represented on the Board;

Make recommendations to the Board in relation to appointments, and maintain an appropriate mix of diversity, skills, experience and expertise on the Board, and

Periodically review and report to the Board requirements, if any, in relation to diversity on the Board.

The Board shall have an optimum combination of executive, non-executive and independent directors in accordance with requirements of the Articles of Association of the Company, the Companies Act, 2013, Listing Agreement and the statutory, regulatory and contractual obligations of the Company.

The effective implementation of this Policy requires that shareholders are able to judge for themselves whether the Board as constituted is adequately diverse. To this end, Mil shall continue to provide sufficient information to shareholders about the size, qualifications and characteristics of each Board member.

4. RESPONSIBILITY AND REVIEW

The Committee will review this Policy periodically and recommend appropriate revisions to the Board.



34


ANNEXURE – ‘E’ to Directors’ ReportSECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED MARCH 31, 2016

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To, The Members, Mandhana Industries Limited. 205-214, Peninsula Centre, Dr. S.S. Rao Marg, Parel, Mumbai 400 012.

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Mandhana Industries Limited (hereinafter called the company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing my opinion thereon.

Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on March 31,2016 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, and in the manner reported hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March, 31, 2016 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the Rules made under that Act;

(ii) The Securities Contracts (Regulations) Act, 1956 (‘SCRA’) and the Rules made under that Act;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed under that Act;

(iv) The Foreign Exchange Management Act, 1999 and the Rules and Regulations made under that Act to the extent applicable to Foreign Direct Investment (FDI), Overseas Direct Investment (ODI) and External Commercial Borrowings (ECB);

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(b) SEBI (Prohibition of Insider Trading) Regulations, 1992, to the extent applicable and SEBI (Prohibition of Insider Trading) Regulations, 2015 made effective from 15th May,2015;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; (Not applicable to the Company during the Audit Period)

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; (Not applicable to the Company during the Audit Period)

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (Not applicable to the Company during the Audit Period)

(f ) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the Company during the Audit Period) and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

35


(Not applicable to the Company during the Audit Period)

(vi) The Management has identified and confirmed the following laws as specifically applicable to the Company:

I. The Legal Metrology Act, 2009

II. The Trade Mark Act, 1999

I further report that for the compliance of Labour Laws and other General Laws, my examination and reporting is based on the documents, records as produced and shown to me and the information and explanation as provided to me, by the officers and management of the Company and to the best of my judgment and understanding of the applicability of the different enactments upon the Company, in my opinion there are adequate systems and processes exist in the Company to monitor and ensure compliance with applicable General Laws and Labour Laws.

I further report that the Company has complied with the applicable clauses/regulations of the following:

(i) Secretarial Standards with regards to Meeting of Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India and made effective 1st July 2015;

(ii) The Equity Listing Agreement, to the extent applicable, entered in to by Company with National Stock Exchange of India Limited and BSE Limited; and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 made effective from 1st December 2015.

During the period under review and as per the explanations and clarifications given to me and the representations made by the Management, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, etc. mentioned above subject to the following observations:

(i) The Company could not spend the eligible profit on Corporate Responsibility Measures. However the company has spent Rs.1,00,00,000/- (Rupees One crore only) during the period under audit.

(ii) The Chairman and Managing Director of the Company is discharging the functions of Chief Financial Officer.

I further report that

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All decisions at Board meetings and Committee Meetings are carried out unanimously as recorded in the minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be.

I further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period, the Hon’ble High Court of Judicature at Bombay has approved and sanctioned the Scheme of Arrangement for demerger of the retail business of Mandhana Industries Limited into Mandhana Retail Ventures Limited.

Date: 2nd August, 2016 (NITIN R. JOSHI)

Place: Mumbai FCS No. 3137 C.P. No 1884

Note: This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.

36


Annexure ‘A’To, The Members, Mandhana Industries Limited 205-214, Peninsula Centre, Dr. S.S. Rao Marg, Parel, Mumbai - 400 012

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.

4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

Date: 2nd August, 2016 (NITIN R. JOSHI)

Place: Mumbai FCS No. 3137 C.P. No 1884

37


ANNEXURE – ‘F’ to Directors’ ReportFORM NO. MGT 9

EXTRACT OF ANNUAL RETURN As on financial year ended on 31.03.2016

Pursuant to Section 92 ( 3 ) of the Companies Act, 2013 and rule 12 (1) of the Company Management & Administration ) Rules, 2014.

I. REGISTATION & OTHER DETAILS :

i. CIN L17120MH1984PLC033553Registration Date 25th July, 1984Name of the Company Mandhana Industries LimitedCategory / Sub-category of the Company Non-Government Company.

Company Limited by Shares / Indian

Address of the Registered Office & Contact Details Plot No. C-3, MIDC, Tarapur Industrial AreaBoisar, Dist : Palghar – 401 506Tel : 91-2525-605704/05/06Fax : 91-22-43539358

ii. Address of the corporate Office & Contact Details 205-214, Peninsula Centre,Dr. S. S. Rao Road,Parel, Mumbai – 400 012Tel. : 91-22-43539191Fax : 91-22-43539216email : [email protected] : www.mandhana.com

iii. Whether Listed Company Yes. (BSE Limited & National Stock Exchange of India Limited)

iv. Name, Address & contact Details of the Registrar & Transfer Agent, if any.

Link Intime India Private LimitedUnit: Mandhana Industries Ltd.)C-13, Pannalal Silk Mills CompoundL.B.S Marg, Bhandup (West)Mumbai – 400 078Tel : 91-22-25946970 : 91-22-25946969email : [email protected]

II PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

All the business activities contributing 10% or more of the total turnover of the Company are given below:-

Sr. No.

Name & Description of main product / services

NIC Code of the Product / Service* % to total turnover of the Company #

1 Textiles and Garments Manufacturing Company

131 - Spinning, weaving and finishing of textiles 87.30

141 - Manufacture of wearing apparel, except fur apparel

12.70

*As per National Industrial Classification - Ministry of Statistics and Programme Implementation

#On the basis of Gross Turnover

38


III PARTICULARS OF HOLDING, SUBSIDIARY & ASSOCIATE COMPANIES:

The Company does not have any Subsidiary / Associate Company.

IV SHAREHOLDING PATTERN (Equity Share Capital. Break up as % to total Equity)

(i) Category-wise Shareholding

Category of shareholders No of Shares held at the beginning of the year

No of Shares held at the end of the year

% Change During

the yearDemat Physical Total % of

Total Shares

Demat Physical Total % of Total

Shares A. Promoters(1) Indian : a) Individual/HUF 1,28,12,675 0 1,28,12,675 38.68 1,31,13,704 0 1,31,13,704 39.59 0.91 b) Central Government/

State Government 0 0 0 0 0 0 0 0 0

c) Bodies Corporate 14,97,734 0 14,97,734 4.52 14,97,783 0 14,97,783 4.52 0 d) FI / Banks 0 0 0 0 0 0 0 0 0 e) Any other – Relative of

Directors 91,25,189 0 91,25.189 27.55 94,52,131 0 94,52,131 28.54 0.99

Sub-Total (A)(1) 2,34,35,598 0 2,34,35,598 70.75 2,40,63,618 0 2,40,63,618 72.65 1.90(2) Foreign : a) Individual – NRI 0 0 0 0 0 0 0 0 b) Other Individuals 0 0 0 0 0 0 0 0 c) Bodies Corporate 0 0 0 0 0 0 0 0 d) F I / Banks 0 0 0 0 0 0 0 0 e) Any other 0 0 0 0 0 0 0 0Sub-Total (A)(2) 0 0 0 0 0 0 0 0Total Shareholding of Promoter and Promoter Gr.(A)=(A)(1)+(A)(2)

2,34,35,598 0 2,34,35,598 70.75 2,40,63,618 0 2,40,63,618 72.65 1.90

B. Public Shareholding (1) Institutions : a) Mutual Funds / UTI 153 0 153 0 0 0 0 0.00 0.00 b) Banks / FI 6,02,800 0 6,02,800 1.82 12,55,925 0 12,55,925 3.79 1.97 c) Central Government /

State Government 0 0 0 0 0 0 0 0 0.00

d) Venture Capital Fund 0 0 0 0 0 0 0 0 0.00 e) Insurance Companies 10,84,981 0 10,84,981 3.28 3,50,000 0 3,50,000 1.06 -2.22 f ) Foreign Portfolio

Investor 8,85,000 0 8,85,000 2.67 2,76,074 0 2,76,074 0.83 -1.84

g) Foreign Venture Capital Investors

0 0 0 0 0 0 0 0 0.00

h) Qualified Foreign Investors

0 0 0 0 0 0 0 0 0.00

i) Any other 0 0 0 0 0 0 0 0 0.00 FIIs 2,25,288 0 2,25,288 0.68 31,560 0 31,560 0.09 -0.59Sub-Total (B)(1) 27,98,222 27,98,222 8.45 19,13,559 0 19,13,559 5.78 -2.67

39


Category of shareholders No of Shares held at the beginning of the year

No of Shares held at the end of the year

% Change During

the yearDemat Physical Total % of

Total Shares

Demat Physical Total % of Total

Shares (2) Non Institutions : a) Bodies Corporate 48,41,266 0 48,41,266 14.62 52,20,522 0 52,20,522 15.76 1.14 b) Individuals : Individual

Shareholders holding Nominal share Capital up to Rs. 1 lakh

5,25,178 10,053 5,35,231 1.62 6,19,747 9,553 6,19,747 1.87 0.22

Individual Shareholders holding Nominal share Capital in Excess of Rs. 1 lakh

9,93,700 0 9,93,700 2.99 9,32,195 0 9,32,195 2.81 -0.18

c) Qualified Foreign Investors

0 0 0 0 0 0 0 0 0.00

d) Any Other: 1) Directors 20,000 0 20,000 0.06 20,000 0 20,000 0.06 0.00 2) Clearing Members 2,10,589 0 2,10,589 0.64 48,651 0 48,651 0.14 0.50 3) NRI-Rept 11,378 0 11,378 0.03 17,149 0 17,149 0.05 0.02 4) NRI-Non Rept 17,319 0 17,319 0.05 866 0 866 0.00 -0.05 5) H.U.F. 2,60,610 0 2,60,610 0.79 2,87,606 0 2,87,606 0.86 0.07Sub-Total (B)(2) 68,80,040 10,053 68,90,093 20.80 71,37,183 9,553 71,46,736 21.58 0.78Total Public Shareholding (B)=(B)(1)+(B)(2)

96,78,262 10,053 96,88,315 29.25 90,50,742 9,553 90,60,295 27.35 -1.90

C. Shares held by Custodian for GDRs & ADRs

0 0 0 0 0 0 0 0 0

Grand Total = A + B + C 3,31,13,860 10,053 3,31,23,913 100.00 331,14,360 9,553 33,123,913 100.00 0.00

(ii) Shareholding of Promoters :

Sl No

Shareholders Name Shareholding at the beginningOf the year

Shareholding at the end of the year

% change inShareholding

during theyear

No. of Shares

% of Total

Shares ofthe

Company

% of SharesPledged/

Encumber-Red to Total

shares

No. of Shares

% of Total

Shares ofthe

Company

% of Shares

Pledged/Encumber-

red to Total

shares1 Mr. Biharilal C. Mandhana 16,82,000 5.08 4.98 17,02,065 5.14 4.98 0.062 Mr. Purushottam C. Mandhana 20,93,081 6.32 6.04 21,39,681 6.46 6.04 0.143 Mr. Manish B. Mandhana 22,10,454 6.67 6.28 22,47,649 6.79 6.28 0.124 Mr. Priyavrat P. Mandhana 36,13,140 10.91 0.61 38,03,709 11.48 0.61 0.575 Purushottam C. Mandhana(HUF) 32,14,000 9.70 5.59 32,20,600 9.72 1.36 0.02

40


(iii) Change in Promoters’ shareholding :

Sl No.

Name Shareholding at the beginning of the year

Cumulative shareholding during the year

No of Shares % of total shares of the

Company


Company1 Mr. Biharilal C. Mandhana

At the beginning of the year 16,82,000 5.08 16,82,000 5.0820.07.2015 Market Purchase 10,070 0.03 16,92,070 5.1118.02.2016 Market Purchase 5,030 0.02 16,97,100 5.1319.02.2016 Market Purchase 4,965 0.01 17,02,065 5.14At the end of the year 17,02,065 5.14

2 Mr. Purushottam C. MandhanaAt the beginning of the year 20,93,081 6.32 20,93,081 6.3230.03.2015 Market Purchase 5,010 0.02 20,98,081 6.3420.07.2015 Market Purchase 15,590 0.05 21,13,681 6.3817.02.2016 Market Purchase 12,920 0.04 21,26,601 6.4219.02.2016 Market Purchase 5,045 0.02 21,31,646 6.4422.02.2016 Market Purchase 4,015 0.01 21,35,661 6.4523.02.2016 Market Purchase 4,020 0.01 21,39,681 6.46At the end of the year 21,39,681 6.46

3 Mr. Manish B. MandhanaAt the beginning of the year 22,10,454 6.67 22,10,454 6.6730.03.2015 Market Purchase 5,010 0.02 22,15,464 6.6920.07.2015 Market Purchase 12,060 0.04 22,27,524 6.7317.02.2016 Market Purchase 12,110 0.04 22,39,634 6.7722.02.2016 Market Purchase 4,020 0.01 22,43,654 6.7823.02.2016 Market Purchase 3,995 0.01 22,47,649 6.79At the end of the year 22,47,649 6.79

4 Mr. Priyavrat P. MandhanaAt the beginning of the year 36,13,140 10.91 36,13,140 10.9130.04.2015 Market Purchase 10,012 0.03 36,23,152 10.9405.06.2015 Market Purchase 10,200 0.03 36,33,352 10.9708.06.2015 Market Purchase 1,600 0.00 36,34,952 10.9710.06.2015 Market Purchase 1,500 0.00 36,36,452 10.9811.06.2015 Market Purchase 5,700 0.02 36,42,152 11.0008.07.2015 Market Purchase 13,070 0.03 36,55,222 11.0320.07.2015 Market Purchase 16,045 0.05 36,71,267 11.0821.08.2015 Market Purchase 10,000 0.03 36,81,267 11.1125.08.2015 Market Purchase 8,339 0.03 36,89,606 11.1415.09.2015 Market Purchase 6,000 0.02 36,95,606 11.16

41


Sl No.

Name Shareholding at the beginning of the year

Cumulative shareholding during the year


Company


Company16.09.2015 Market Purchase 4,125 0.01 36,99,731 11.1718.09.2015 Market Purchase 4,000 0.01 37,03,731 11.1801.10.2015 Market Purchase 7,105 0.02 37,10,836 11.2006.10.2015 Market Purchase 13,280 0.04 37,24,116 11.2409.10.2015 Market Purchase 13,080 0.04 37,37,196 11.2815.10.2015 Market Purchase 31,078 0.10 37,68,274 11.3816.11.2015 Market Purchase 12,855 0.04 37,81,129 11.4212.02.2016 Market Purchase 22,580 0.06 38,03,709 11.48At the end of the year 38,03,709 11.48

5 Mr. Purushottam C. Mandhana(HUF)At the beginning of the year 32,14,000 9.70 32,14,000 9.7016.11.2015 Market Purchase 6,600 0.02 32,20,600 9.72At the end of the year 32,20,600 9.72

(iv) Shareholding Pattern of Top 10 Shareholders ( other than Directors, Promoters & Holders Of GDRs & ADRs )

Sl. No.

For each of the Top 10 Shareholders Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of Shares % of total Shares of the

Company


Company1. Sudha Biharilal Mandhana

At the beginning of the year 20,85,970 6.30 20,85,970 6.3030.04.2015 Market Purchase 10,020 0.03 20,95,990 6.3303.06.2015 Market Purchase 7,600 0.02 21,03,590 6.3505.06.2015 Market Purchase 2,000 0.01 21,05,590 6.3617.06.2015 Market Purchase 10,100 0.03 21,15,690 6.3918.06.2015 Market Purchase 6,050 0.02 21,21,740 6.4108.07.2015 Market Purchase 13,060 0.03 21,34,800 6.4415.07.2015 Market Purchase 8,065 0.03 21,42,865 6.4720.07.2015 Market Purchase 12,040 0.04 21,54,905 6.5124.08.2015 Market Purchase 23,520 0.07 21,78,425 6.5801.10.2015 Market Purchase 7,302 0.02 21,85,727 6.6007.10.2015 Market Purchase 8,155 0.02 21,93,882 6.6213.10.2015 Market Purchase 5,310 0.02 21,99,192 6.6416.10.2015 Market Purchase 9,162 0.03 22,08,354 6.6719.10.2015 Market Purchase 12,583 0.03 22,20,937 6.7016.11.2015 Market Purchase 12,825 0.04 22,33,762 6.7412.02.2016 Market Purchase 22,590 0.07 22,56,352 6.81At the end of the year 22,56,352 6.81

42


Sl. No.




Company


Company2. Prema Purushottam Mandhana

At the beginning of the year 20,75,764 6.27 20,75,764 6.2703.06.2015 Market Purchase 8,100 0.02 20,83,834 6.2917.06.2015 Market Purchase 10,100 0.03 20,93,934 6.3218.06.2015 Market Purchase 7,050 0.02 21,00,984 6.3408.07.2015 Market Purchase 12,050 0.04 21,13,034 6.3815.07.2015 Market Purchase 5,070 0.01 21,18,104 6.3920.07.2015 Market Purchase 14,040 0.05 21,32,144 6.4424.08.2015 Market Purchase 20,153 0.06 21,52,297 6.5019.10.2015 Market Purchase 10,075 0.03 21,62,372 6.5320.10.2015 Market Purchase 7,479 0.02 21,69,851 6.5521.10.2015 Market Purchase 5,660 0.02 21,75,511 6.5723.10.2015 Market Purchase 15,078 0.04 21,90,589 6.6118.02.2016 Market Purchase 5,020 0.02 21,95,609 6.63At the end of the year 21,95,609 6.63

3 Mahan Synthetic Textiles Pvt. Ltd.At the beginning of the year 14,97,783 4.52 14,97,783 4.52At the end of the year 14,97,783 4.52

4 Sangeeta Manish MandhanaAt the beginning of the year 13,63,485 4.12 13,63,485 4.1203.06.2015 Market Purchase 5,000 0.01 13,68,485 4.1304.06.2015 Market Purchase 2,000 0.01 13,70,485 4.1405.06.2015 Market Purchase 2,000 0.00 13,72,785 4.1411.06.2015 Market Purchase 5,100 0.02 13,77,585 4.1608.07.2015 Market Purchase 12,040 0.04 13,89,625 4.2020.07.2015 Market Purchase 10,545 0.03 14,00,170 4.23At the end of the year 14,00,170 4.23

5 Biharilal C. Mandhana (HUF )At the beginning of the year 10,98,000 3.31 10,98,000 3.31At the end of the year 10,98,000 3.31

6 Arnold Holding LimitedAt the beginning of the year 5,56,304 1.68 5,56,304 1.6803.04.2015 – Transfer (7,024) 0.02 5,49,280 1.6610.04.2015 – Transfer (25,000) 0.08 5,24,280 1.5817.04.2015 – Transfer (4,500) 0.01 5,19,780 1.5701.05.2015 – Transfer 10,500 0.03 5,30,280 1.6008.05.2015 – Transfer 6,075 0.02 5,36,355 1.6215.05.2015 – Transfer 70,070 0.21 6,06,425 1.8322.05.2015 – Transfer 51,249 0.16 6,57,674 1.99

43


Sl. No.




Company


Company05.06.2015 – Transfer 42,710 0.12 7,00,384 2.1126.06.2015 – Transfer 84,000 0.26 7,84,384 2.3703.07.2015 – Transfer 999 0.00 7,85,383 2.3724.07.2015 – Transfer 1,29,123 0.39 9,14,506 2.7607.08.2015 – Transfer 34,690 0.11 9,49,196 2.8728.08.2015 – Transfer 4,016 0.01 9,53,212 2.8816.10.2015 – Transfer (3,212) 0.01 9,50,000 2.8731.12.2015 – Transfer 34,999 0.10 9,84,999 2.9722.01.2016 – Transfer (23,271) 0.07 9,61,728 2.9029.01.2016 – Transfer 8,468 0.03 9,70,196 2.9305.02.2016 – Transfer (5,000) 0.02 9,65,196 2.9112.02.2016 – Transfer (86) 0.00 9,65,110 2.9119.02.2016 – Transfer (15,110) 0.04 9.50.000 2.87At the end of the year 9,50,000 2.87

7 Arnav M MandhanaAt the beginning of the year 8,14,000 2.46 8,14,000 2.46At the end of the year 8,14,000 2.46

8 Manish B. Mandhana (HUF )At the beginning of the year 7,84,000 2.37 7,84,000 2.37At the end of the year 7,84,000 2.37

9 Win Sure Trade Invest Pvt. Ltd.At the beginning of the year NIL 0.00 NIL 0.0011.09.2015 Transfer 4,02,600 1.22 4,02,600 1.2230.09.2015 Transfer (27,000) 0.09 3,75,600 1.1309.10.2015 Transfer 24,300 0.08 3,99,900 1.2116.10.2015 Transfer 17,500 0.05 4,17,400 1.2623.10.2015 Transfer 7,500 0.02 4,24,900 1.2812.02.2016 Transfer 29,000 0.09 4,53,900 1.3719.02.2016 Transfer 9,000 0.03 4,62,900 1.4026.02.2016 Transfer (32,500) 0.10 4,30,400 1.3004.03.2016 Transfer (5,500) 0.02 4,24,900 1.2831.03.2016 Transfer 2,59,789 0.78 6,84,689 2.07At the end of the year 6,84,689 2.07

10 Life Insurance corporation of IndiaAt the beginning of the year 6,66,421 2.01 6,66,421 2.0117.04.2015 – Transfer (6,383) 0.02 6,60,038 1.9924.04.2015 – Transfer (1,707) 0.00 6,58,331 1.99At the end of the year 6,58,331 1.99

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(V) Shareholding of directors & KMP :Sl

No.Name Shareholding at the

beginning of the yearCumulative shareholding

during the yearNo of Shares % of total

shares of the Company


Company1 Mr. Biharilal C. Mandhana

At the beginning of the year 16,82,000 5.08 16,82,000 5.0820.07.2015 Market Purchase 10,070 0.03 16,92,070 5.1118.02.2016 Market Purchase 5,030 0.02 16,97,100 5.1319.02.2016 Market Purchase 4,965 0.01 17,02,065 5.14At the end of the year 17,02,065 5.14

2 Mr. Purushottam C. MandhanaAt the beginning of the year 20,93,081 6.32 20,93,081 6.3230.03.2015 Market Purchase 5,010 0.02 20,98,081 6.3420.07.2015 Market Purchase 15,590 0.05 21,13,681 6.3817.02.2016 Market Purchase 12,920 0.04 21,26,601 6.4219.02.2016 Market Purchase 5,045 0.02 21,31,646 6.4422.02.2016 Market Purchase 4,015 0.01 21,35,661 6.4523.02.2016 Market Purchase 4,020 0.01 21,39,681 6.46At the end of the year 21,39,681 6.46

3 Mr. Manish B. MandhanaAt the beginning of the year 22,10,454 6.67 22,10,454 6.6730.03.2015 Market Purchase 5,010 0.02 22,15,464 6.6920.07.2015 Market Purchase 12,060 0.04 22,27,524 6.7317.02.2016 Market Purchase 12,110 0.04 22,39,634 6.7722.02.2016 Market Purchase 4,020 0.01 22,43,654 6.7823.02.2016 Market Purchase 3,995 0.01 22,47,649 6.79At the end of the year 22,47,649 6.79

4 Mr. Ghyanendra Nath BajpaiAt the beginning of the year 20,000 0.06 20,000 0.06At the end of the year 20,000 0.06

5 Sangeeta Manish MandhanaAt the beginning of the year 13,63,485 4.12 13,63,485 4.1203.06.2015 Market Purchase 5,000 0.01 13,68,485 4.1304.06.2015 Market Purchase 2,000 0.01 13,70,485 4.1405.06.2015 Market Purchase 2,000 0.00 13,72,785 4.1411.06.2015 Market Purchase 5,100 0.02 13,77,585 4.1608.07.2015 Market Purchase 12,040 0.04 13,89,625 4.2020.07.2015 Market Purchase 10,545 0.03 14,00,170 4.23At the end of the year 14,00,170 4.23

6 Vinay Sampat – Company SecretaryAt the beginning of the year 0 0 0 0At the end of the year 0 0 0 0




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Management Discussion and Analysis1. Industry Structure and Development

Global Economy

The past year has been a challenging year for the Textile Industry with lots of ups and downs. Inspite of the above, the industry has been able to maintain its steady performance during the year under review. The recoveries in US European and Asian economies is good for the Industry and will boost the exports to these economies.

Textile Industry has played a key role in the country’s progress over the years and the situation is likely to gain momentum in the times ahead. The Industry continues to hold a dominant position in country’s economic structure because of its huge contribution towards employment generation. Stiff competition from China, Bangladesh, Sri Lanka and other emerging economies, will have negative impact on Business Profit, The relative competitiveness of Industry is dependent upon the Yarn, Dyes & Chemicals prices, exchange rates and prevalent interest rates regime. Any increase in the prices of raw material will make the things difficult for the Textile Industry resulting weak demand and thin margins. The recovery of the textile industry seems to be round the corner as domestic demand is expected to pick up this year on account of improved economic sentiments. Inspite of the adverse market conditions prevailing in various business segments in which the Company operates, the overall performance of the Company during the year has improved compared to that of the previous year. There is confidence of a revival in global the economic outlook in the coming years though this view is not presently supported by economic fundamentals driven by higher economic growth in the advance economies and constrained by moderate growth in emerging markets.

Indian Economy

The Indian textile industry market share presently is USD 108 billion, out of which USD 68 billion is domestic consumption and USD 40 billion is exports, due to which India emerges as the second largest exporter after China having 6% share in the global trade. The industry is taking all steps to promote textile exports, which is the need of the hour. Costs are increasing due to rising input costs, including

labour and power. The fall in the Rupee against the US dollar should act positively for promotion of exports. Focus on new product development and value added products is continuing in this segment.

India has the potential to double its market size in the long run as China is losing its competitive advantage in textiles mainly on account of increasing labour & power costs, the appreciating Yuan, and focus on the domestic market with high value products. The shift from China to India is expected to happen in the long run, to make India a dependable source of supply for the World. Increasing competition from countries like Bangladesh, Vietnam, Pakistan and Sri Lanka due to favorable tariff structures on exports to developed markets like the US, EU, Canada, Australia, etc poses a significant challenge to Indian exports.

A ‘Make in India’ campaign has been unveiled by the Prime Minister. The Make in India’ scheme also puts in place the systems to address in a timely manner queries of potential investors. At present, the Government of India allows 100% Foreign Direct Investment (FDI) under the automatic route in the textile sector, subject to all applicable regulations and laws, which effectively backs the Make in India program for the textile and garment industry. Under the ‘Make in India’ initiative, investment opportunities for foreign companies and entrepreneurs are available across the entire value chain of synthetics, value–added and specialty fabrics, fabric processing set–ups for all kinds of natural and synthetic textiles, technical textiles, garments, and retail brands.

2. The Company

Mandhana Industries Limited, a multi-division, multi-geography company is one of India’s leading textile and garment manufacturer. The Company manufactures products at its state-of-the-art facilities which finds acceptance across 25 nations globally. Vertical integration enables the Company to span the entire textile value chain enhancing growth opportunities.

Segmental Review

The technical performance of our Textile unit viz. yarn dyeing, Weaving & Processing has been steady and there has been some growth in turnover. Due to

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46

a general market recession, the demand and prices for textile products remained weak. In the Domestic market, with the help of continuous new product development and increasing Value added product supply, the Company is offering a wide range of high quality products to all categories of the customers with continual developments in blends, weaving structures, designs, finishes, etc.

Liquidation of old accumulated inventory coupled with longer working capital cycle can impact the future profit negatively. Increase in price on account of currency fluctuation helped in protecting the margins. Various initiatives undertaken for cost optimization, particularly in labour and power, helped the unit to maintain its margin at reasonable levels.

Financial Overveiw

Revenue stood at ` 1646.61 crore in 2015-16 against ` 1542.93 crore in 2014-15 owing to an increase in the sales of fabrics due to the team’s ability to offer innovative weaves and finishes. Revenue from the textiles business increased by 6.18% over 2014-15 – it stood at ` 1437.41 crores in 2015-16 & Garment business increased by 12.54% over 2014-15, it stood at ` 209.20 crores.

The EBIDTA margin stood stagnant at 14.73% in 2015-16 against 14.72% in 2014-15.

The Company reported a marginal decline of 38bps and delivered a Net Profit of ` 57.134 crore in 2015-16 against ` 62.72 crore in 2014-15.this decline was primarily due to increase in interest costs.

3. Risks and Concerns

The US dollar has strengthened continuously against the Indian Rupee and other currencies, due to the turmoil in the China market and recession in the European market. Due to a demand recession across the globe, increasing prices in Indian markets has become extremely difficult. The input costs are continuously increasing without commensurate increase in selling prices.

Changes in China’s Textile Policy severely affected the country’s export to that country. In spite of the above, we are of the firmed opinion that the future of the Textile Industry is quite promising. We hope that with the recoveries in economies of U.S.A and European Union will propel the growth of the Textile

Industry. Ever growing retailing sector and increased purchasing power of both urban and rural people, are still present in the economy and will lead to the growth of the Industry. The shifting of orders from China to India, due to various favourable factors will also help the Industry to increase its global share.

Outlook: To overcome the challenges and competition, we have taken various initiatives to reduce the operational cost, development of new innovative value added products, and exploring new markets based on certain parameters, to achieve better margins in the future.

Some smaller manufacturing set-ups, which enjoy lower cost of production due to advantageous levels of overhead expenses and taxes, have upgraded the quality of their products, and provide good competition to large units in terms of both, quality and price.

The Company has a well established framework of internal controls in all areas of its operations, including suitable monitoring procedures and competent personnel. In addition to statutory audit, the financial controls of the Company at various locations are reviewed by the Internal Auditors, who report their findings to the Audit Committee of the Board.

The Audit Committee meets on a regular basis to review the progress of the internal audit initiatives, significant audit observations and planning and implementation of follow-up action required. The Company conducts its business with integrity and high standards of ethical behaviour and in compliance with the laws and regulations that govern its business

The Company wide awareness of risk management policies and practices is being inculcated to minimize the adverse effect of risks on the operating results and the subject of management of risks are being approached in a planned and co–ordinated manner. .

4. Internal Control Systems

The Company has a benefit of internal control systems developed over years which ensured that all transactions are satisfactorily recorded and reported and all assets are protected against loss from an unauthorized use or otherwise. The internal control systems are supplemented by an internal

47


audit system carried out by independent firms of Chartered Accountants and a periodical review by the management. The Audit Committee of the Board meets at a regular interval and advises on significant issues raised by, both, the Internal Auditors and the Statutory Auditors. The process of internal control and systems, statutory compliance, risk analysis and its management and information technology are woven together to provide a meaningful support to the management process. The system adopted, especially relating to internal control systems are adequate and commensurate with the nature of its business and size of its operations, though continuous efforts are being made to strengthening the same.

5. Human Resources

In the past few years, as the job market has opened widely, the demand for talents has been continuously rising and continuous learning has therefore become inevitable. As such, the Company continued thrust on Human Asset Management and Development activity. In order to cope with this requirement for talent, apart from locating talents from outside market where ever necessary, the Company also focused on the activity of nurturing and developing its human capital from within, by the process of training and upgrading competence level.

On the Industrial Relations front, a cordial relationship has been maintained with the workmen in the manufacturing units. Your Company has put in place a series of HRD measures including appraisal of employees, recognition and reward for good work, training etc., In the context of the changing business scenario, professional competence and skills are being nurtured keeping the growth perspective in mind. These efforts have started yielding intangible results and it is expected that continuation of such efforts will start yielding tangible results too, in future.

Health and Safety Measures:

As a conscientious and caring employer, the Company actively pursues safety and health measures continuously. Modern occupational health and medical services are accessible to all employees through well-equipped occupational health centres at all manufacturing units. At all our plants, adequate safety measures for prevention of any untoward incident have always been taken. The Company has a range of policies, including on quality, safety and health aspects to guide the employees’ work practices, actions and decisions. The Company strives to continuously improve the effectiveness of its policies and the employees are encouraged to contribute their best in this direction. All employees are obliged to ensure that they fully understand all policies and they do fully comply with the requirements thereof.

The Company has adopted a progressive policy for helping employees to develop their organizational skills, knowledge and abilities to achieve efficiency. The focus of all aspects of Human Resource Development is on developing a superior workforce so that the organization and individual employee can accomplish their work goals of service to customers.

Cautionary Statement :

The statements in this report on ‘Management Discussion and Analysis’ describing the Company’s objectives, estimates, expectations or projections, outlook etc., may constitute ‘forward looking statements’ within the meaning of the applicable securities laws and regulations. Actual results may differ from such expectations, projections etc., whether express or implied. These statements are based on certain assumptions and expectations of future events over which the Company has no direct control. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments, information or events.

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CORPORATE GOVERNANCE REPORTCompany’s philosophy on code of Corporate Governance

Corporate governance is a process, which safeguards and adds value in long term for various “stakeholder” such as shareholders, creditors, customers, government and employees. The culmination of good corporate governance is and will be transparency and professionalism in conduct of all the activities of the Company, responsive management and implementation of policies and procedures laid down by the Company to ensure high ethical standards and fulfilling corporate social obligations and responsibilities. Your Company believes in adopting the well accepted Corporate Governance practices and benchmarks the same and strives to improve them continuously.

Corporate Governance Structure

The Company has three tiers of Corporate Governance structure, viz.:

(i) Strategic Supervision – by the Board of Directors comprising the Executive and Non-Executive Directors.

(ii) Executive Management – by the Corporate Management comprising the Executive Directors.

(iii) Operational Management – by the Operational Heads of Business Divisions.

The three-tier corporate governance structure not only ensures greater management accountability and credibility but also facilitates increased business autonomy, performance, discipline and development of business leaders.

I. BOARD OF DIRECTORS

Composition, Category of Directors, other Directorships and Committee Membership

The composition of Board of Directors during the year ended March 31, 2016 are in conformity with Regulation 17 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 (“Listing Regulations”) read with Section 149 of the Companies Act, 2013.

The following table provides the comprehensive detail of the category of Directors and the number of other Directorship and Committee Membership held by them as on 31st March, 2016:

Name of the Director Category of Director Number of other

Directorship held (includes

private Companies)

Number of Committee memberships in

domestic Companies (including this Company)

As Chairman As Member

Mr. Purushottam C. Mandhana Executive Chairman 7 - 1Mr. Biharilal C. Mandhana 1 Executive 4 - -Mr. Manish B. Mandhana Executive 5 - 1Mr. Ghyanendra Nath Bajpai 2 Non - executive and Independent 13 3 9Mr. Khurshed M. Thanawalla 3 Non - executive and Independent 6 4 4Mr. Dilip G. Karnik 4 Non - executive and Independent 1 - 2Mrs. Sangeeta M. Mandhana Non - Executive - - -Mr. Prashant Asher 5 Non - executive and Independent 9 1 4

1 Mr. Biharilal C. Mandhana ceased as Director w.e.f. 10th June, 2016 2 Mr. Ghyanendra Nath Bajpai ceased as Director w.e.f. 25th June, 2016 3 Mr. Khurshed M. Thanawalla ceased as Director w.e.f. 7th September, 2016 4 Mr. Dilip G. Karnik ceased as Director w.e.f. 27th June, 2016 5 Mr. Prashant K. Asher ceased as Director w.e.f. 7th September, 2016

Note: In accordance with Regulation 26(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Membership/Chairmanship only of the Audit Committees and Stakeholders’ Relationship Committees of all the Public Limited Companies has been considered.

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The Board met 4 times during the financial year under review on the following dates:

(1) 29th May, 2015 (2) 13th August, 2015(3) 3rd November, 2015 (4) 9th February, 2016

Attendance

The following table gives the number of Board Meeting attended during financial year 2015-16 and attendance at the last Annual General Meeting (AGM).

Name of the Director Number of Board Meetings attended

Attendance at the last AGM held on 30th September, 2015

Mr. Purushottam C. Mandhana 4 YesMr. Biharilal C. Mandhana 4 YesMr. Manish B. Mandhana 4 YesMr. Ghyanendra Nath Bajpai 4 YesMr. Khurshed M. Thanawalla 4 YesMr. Dilip G. Karnik 3 NoMrs. Sangeeta M. Mandhana 1 NoMr. Prashant Asher 4 Yes

Code of Conduct

The Company has adopted the Code of Conduct –

- for Directors and Senior Management of the Company

- for prevention of Insider Trading {as required by SEBI (Prohibition of Insider Trading) Regulations, 2015}

The full text of the Code is displayed on the Company’s website www.mandhana.com.

All the Board Members and Senior Managerial Personnel have affirmed the Compliance with Code of Conduct and a declaration to that effect signed by the Chairman and Managing Director has been obtained.

Remuneration of Directors

Remuneration paid/payable to the Directors for the year ended 31st March, 2016:-

Name of the Director Salaries and Perquisites (Rs.)

Commission (Rs.)

Sitting Fees (Rs.)

Total (Rs.)

Mr. Purushottam C. Mandhana 2,43,99,600 Nil Nil 2,43,99,600Mr. Biharilal C. Mandhana 73,83,600 Nil Nil 73,83,600Mr. Manish B. Mandhana 1,70,91,600 Nil Nil 1,70,91,600Mr. Ghyanendra Nath Bajpai Nil Nil 4,75,000 4,75,000Mr. Khurshed M. Thanawalla Nil Nil 5,00,000 5,00,000Mr. Dilip G. Karnik Nil Nil 3,75,000 3,75,000Mrs. Sangeeta M. Mandhana Nil Nil 50,000 50,000Mr. Prashant K. Asher Nil Nil 4,50,000 4,50,000

Notes:

1. Salaries and Perquisites include Salary, allowances, company’s contribution to provident fund and monetary value of perquisites, if any. The terms of appointment of Executive Directors as approved by shareholders, are contained in their respective Agreements entered into with the Company. The tenure of office of the Whole-Time Directors is three years from their respective dates of appointments. The notice period for

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termination of appointment is determinable as per company’s policy. While there is no specific provision for payment of severance fees for any of the Executive Directors, the Board is empowered to consider the same at its discretion, taking into account attendant facts and circumstances.

2. The Company does not pay any remuneration to the Non-Executive Directors except sitting fees @ Rs.50,000/- for each meeting of the Board of Directors and Audit Committee of the Board of Directors attended and Rs.25,000/- for each meeting of the other Committees of the Board attended by the Independent Directors, which is within the limits prescribed under the provisions of the Companies Act, 2013 and Article 153 of the Articles of Association of the Company.

3. There was no pecuniary relationship or transactions with Non - Executive Directors vis-à-vis the Company other than sitting fees and commission.

4. The Company has not provided any ESOP Scheme to its directors and employees.

Inter-se Relationships among directors

Mr. Purushottam C. Mandhana and Mr. Biharilal C. Mandhana are the brothers. Mr. Manish B. Mandhana is the son of Mr. Biharilal C. Mandhana and nephew of Mr. Purushottam C. Mandhana and husband of Mrs. Sangeeta M. Mandhana. Mrs. Sangeeta M. Mandhana is wife of Mr. Manish B. Mandhana and daughter-in-law of Mr. Biharilal C. Mandhana and Mr. Purushottam C. Mandhana.

Board Evaluation

Evaluation of performance of all Directors is undertaken annually. The Company has implemented a system of evaluating performance of the Board of Directors and of its Committees and individual Directors on the basis of a structured questionnaire which comprises evaluation criteria taking into consideration various performance related aspects.

The Board of Directors has expressed their satisfaction with the evaluation process.

Shareholding of Non-Executive Directors

The individual shareholding of non-executive directors as on 31st March, 2016 as follows:

Name of Director No. of shares heldMr. Ghyanendra Nath Bajpai 20,000Mrs. Sangeeta M. Mandhana 14,00,170

Details of directors seeking reappointment

Details of the Directors seeking reappointment at the ensuing Annual General Meeting (AGM) alongwith the brief profile of the Directors form part of the notice convening the ensuing AGM.

II. AUDIT COMMITTEE

Composition of the Audit Committee

The Audit Committee comprises of Four Non-Executive Directors and One Executive Director as on 31st March, 2016:-

Sr. No.

Name Position

1. Mr. Khurshed M. Thanawalla 1 Chairman2. Mr. Ghyanendra Nath Bajpai 2 Member3. Mr. Prashant K. Asher 3 Member4. Mr. Dilip G. Karnik 4 Member5. Mr. Purushottam C. Mandhana Member

1 Mr. Khurshed M. Thanawalla ceased as Director w.e.f. 7th September, 2016

2 Mr. Ghyanendra Nath Bajpai ceased as Director w.e.f. 25th June, 2016

3 Mr. Prashant K. Asher ceased as Director w.e.f. 7th September, 2016

4 Mr. Dilip G. Karnik ceased as Director w.e.f. 27th June, 2016

Notes:

Mr. Khurshed M. Thanawalla, Chairman of the Audit Committee possesses the requisite accounting and financial knowledge.

Mr. Vinay Sampat, Company Secretary, is the Secretary to the Audit Committee.

The minutes of the Audit Committee Meeting are noted by the Board of Directors of the Company in the subsequent Board Meeting.

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Meetings and attendance during the year

There were 4 meetings of the Audit Committee held during the year as follows:

(1) 29th May, 2015 (2) 13th August, 2015 (3) 3rd November, 2015 (4) 9th February, 2016

Name of the Director Number of Audit Committee Meetings

attendedMr. Khurshed M. Thanawalla 4Mr. Ghyanendra Nath Bajpai 4Mr. Prashant K. Asher 4Mr. Dilip G. Karnik 3Mr. Purushottam C. Mandhana 4

Notes:

The Statutory Auditors, Internal Auditors, Joint Managing Director and Senior Finance Personnel are permanent invitees to the meetings of the Committee.

Terms of Reference

The Power and the terms of the Audit Committee, are as stated herein below:

(A) Powers of the Audit Committee:

1. To investigate any activity of within its terms of reference.

2. To seek information from any employee

3. To obtain outside legal or other professional advice.

4. To secure attendance of outsiders with relevant expertise, if it considers necessary.

(B) Role of the Audit Committee:

1. oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;

2. recommendation for appointment, remuneration and terms of appointment of auditors of the Company;

3. approval of payment to statutory auditors for any other services rendered by the statutory auditors;

4. reviewing, with the management, the annual financial statements and auditor’s report thereon before submission to the board for approval, with particular reference to:

(a) matters required to be included in the director’s responsibility statement to be included in the board’s report in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013;

(b) changes, if any, in accounting policies and practices and reasons for the same;

(c) major accounting entries involving estimates based on the exercise of judgment by management;

(d) significant adjustments made in the financial statements arising out of audit findings;

(e) compliance with listing and other legal requirements relating to financial statements;

(f ) disclosure of any related party transactions;

(g) modified opinion(s) in the draft audit report;

5. reviewing, with the management, the quarterly financial statements before submission to the Board of Directors for approval;

6. reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the board to take up steps in this matter;

7. reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;

8. approval or any subsequent modification of transactions of the listed entity with related parties;

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9. scrutiny of inter-corporate loans and investments;

10. valuation of undertakings or assets of the listed entity, wherever it is necessary;

11. evaluation of internal financial controls and risk management systems;

12. reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

13. reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;

14. discussion with internal auditors of any significant findings and follow up there on;

15. reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;

16. discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

17. to look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;

18. to review the functioning of the whistle blower mechanism;

19. approval of appointment of chief financial officer after assessing the qualifications, experience and background, etc. of the candidate;

20. Carrying out any other function as is mentioned in the terms of reference of the audit committee.

The audit committee also reviews the following information:

1) management discussion and analysis of financial condition and results of operations;

2) statement of significant related party transactions (as defined by the audit committee), submitted by management;

3) management letters / letters of internal control weaknesses issued by the statutory auditors;

4) internal audit reports relating to internal control weaknesses; and

5) the appointment, removal and terms of remuneration of the chief internal auditor shall be subject to review by the audit committee.

6) statement of deviations:

(a) quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s) in terms of Regulation 32(1).

(b) annual statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice in terms of Regulation 32(7).

(C) Board disclosures – Risk management:

The Company has laid down procedures to inform the Board about the risk assessment and minimizing risk by means of properly defined risk management frame work.

The terms of reference of the Audit Committee are in accordance with Section 177 of the Companies Act, 2013 and Regulation 18 the Listing Regulations. The Committee acts as a link between the Management, Auditors and Board of Directors of the Company and has full access to the financial information.

Recommendations of the Audit Committee, if any, are considered and implemented by the Board from time to time.

III. Nomination & Remuneration Committee

Composition of the Nomination & Remuneration Committee

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The Nomination & Remuneration, (‘Remuneration Committee’) Committee comprises of Four Non-Executive Directors and Independent Director as on 31st March, 2016:-

Sr. No.

Name Position

1. Mr. Khurshed M. Thanawalla 1 Chairman2. Mr. Ghyanendra Nath Bajpai 2 Member3. Mr. Prashant K. Asher 3 Member4. Mr. Dilip G. Karnik 4 Member


2 Mr. Ghyanendra Nath Bajpai ceased as Director w.e.f. 25th June, 2016

3 Mr. Prashant K. Asher ceased as Director w.e.f. 7th September, 2016


Notes:

Mr. Vinay Sampat, Company Secretary, is the Secretary to the Remuneration Committee.

The minutes of the Remuneration Committee Meeting are noted by the Board of Directors of the Company in the subsequent Board Meetings.

Meeting and attendance during the year

There were 2 meetings of the Nomination & Remuneration Committee held during the year on 29th May, 2015 and 9th February, 2016.

Name of the Director Number of Nomination & Remuneration

Committee Meetings attended

Mr. Khurshed M. Thanawalla 2Mr. Ghyanendra Nath Bajpai 2Mr. Prashant K. Asher 2Mr. Dilip G. Karnik 1

Terms of Reference

The terms of reference of the Committee are aligned with the terms of reference provided under Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations stated as under:

1) formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the board of directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees;

2) formulation of criteria for evaluation of performance of independent directors and the board of directors;

3) devising a policy on diversity of board of directors;

4) identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the board of directors their appointment and removal; and

5) whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.

IV. STAKEHOLDERS’ RELATIONSHIP COMMITTEE

Composition of the Stakeholders’ Relationship Committee

The Stakeholders’ Relationship Committee comprises of Two Non-Executive Directors and One Executive Director as on 31st March, 2016:-

Sr. No.

Name Position

1. Mr. Khurshed M. Thanawalla 1 Chairman2. Mr. Manish B. Mandhana Member3. Mr. Dilip G. Karnik 2 Member



Notes:

The minutes of the Stakeholders’ Relationship Committee Meeting are noted by the Board of Directors of the Company in the subsequent Board Meeting/s.

Mr. Vinay Sampat, Company Secretary is the Secretary to the Stakeholders’ Relationship Committee and is also been designated as the Compliance Officer of the Company.

54


There was one meeting of the Stakeholders’ Relationship Committee held during the year under review on 9th February, 2016.

Name of the Director Number of Stakeholders’ Relationship Committee

Meetings attendedMr. Khurshed M. Thanawalla 1Mr. Manish B. Mandhana 1Mr. Dilip G. Karnik 1

During the year under review, the Company has not received any grievances/ complaints from the Shareholders.

The SCORES website of SEBI for redressing of grievances of the investors is being visited at regular intervals by the Company Secretary and there are no pending complaints registered with SCORES for the financial year ended 31st March, 2016.

There are no pending cases of share transfer as on 31st March, 2016.

As per Regulation 46(2)(j) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the email ID for grievance Redressal and other relevant details of the Company is [email protected].

As per Regulation 46(2)(k) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the contact information of designated official of the company viz. Mr. Vinay Sampat, Company Secretary of the Company is [email protected]; Telephone No. 022-43539191.

Terms of Reference

The terms of reference of the Committee are aligned with the terms of reference provided under Section 178 of the Companies Act, 2013 and Para B of Part D of Schedule II of the Listing Regulations as stated below:

1) Efficient transfer of shares; including review of cases for refusal of transfer/ transmission of shares and debentures;

2) Redressal of shareholder and investor complaints like transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc.;

3) Issue of duplicate/split/consolidated share certificates;

4) Allotment and listing of shares;

5) Review of cases for refusal of transfer/ transmission of shares and debentures;

6) Reference to statutory and regulatory authorities regarding investor grievances; and

7) Ensure proper and timely attendance and redressal of investor queries and grievances.

V. INDEPENDENT DIRECTORS

Meeting of Independent Directors

The Company’s Independent Directors met on 23rd February, 2016 without the presence of Executive Directors or members of the management and reviewed matters pertaining to Performance Evaluation of the Board/Committees and the Directors. Out of the 4 Independent Directors, three Independent Directors attended the meeting.

Familiarization Programme for Independent Directors

The Company has established a Familiarisation Programme for Independent Directors. The details of this familiarization programme uploaded on the website of the Company. The weblink to this is http://www.mandhana.com/investorrelations.html.

VI. SUBSIDIARY COMPANY(IES)

The Company does not have any subsidiary Company(ies).

55


VII. GENERAL BODY MEETINGS a) Particulars of the Annual General Meetings for the last three years:-

Particulars Date Venue Time Details of Special Resolutions passed29th AGM(2012-13)

19th September, 2013

C-2, MIDC, Tarapur Industrial Area, Boisar, Palghar - 401 506

11:00 a.m. No Special resolutions passed.

30th AGM (2013-14)


C-2, MIDC, Tarapur Industrial Area, Boisar, Palghar - 401 506

11:00 a.m. Special resolutions passed for –1) Increase in Authorised Capital from Rs.40

Crore to Rs.50 Crore2) Alteration of Clause V of the Memorandum

of Association.3) Substitution of Clause 3 of Articles of

Association.4) Raising of funds under Section 62(1)(c) of

the Companies act, 2013.5) Appointment of Mr. Priyavrat P. Mandhana

to hold office or place of profit in the Company.

31st AGM (2014-15)


C-2, MIDC, Tarapur Industrial Area, Boisar, Palghar – 401 506

12:30 p.m. No Special resolutions passed.

Note: The Chairman of Audit Committee was present at all above Annual General Meetings.

b) Particulars of the Extra-ordinary General Meeting / Special resolution passed through postal ballot

During the year 2015-16, neither any Extra-Ordinary General Meeting was held nor any special resolution passed/proposed through postal ballot.

c) Court Convened Meeting Pursuant to the Order made on 15th October,

2015 in the Company Summons for Direction No. 814 of 2015, by the Hon’ble High Court of Judicature at Bombay, the Court Convened Meeting was held on 27th November, 2015 at Plot No.C-2, M.I.D.C., Tarapur Industrial Area, Boisar, District Palghar – 401 506 for demerger and vesting of the retail business of the Company in Mandhana Retail Ventures Limited. At the Court Convened Meeting the Shareholders had approved the Scheme of Demerger between the Company and Mandhana Retail Ventures Limited.

Mr. Nitin R. Joshi, the Practicing Company Secretary, was appointed as Scrutinizer for the above mentioned Court Convened Meeting.

The Hon’ble High Court of Judicature at Bombay has passed the Order for demerger of retail business to Mandhana Retail Ventures Limited on 29th March, 2016 and the same was filed with the Registrar of Companies, Maharashtra, Mumbai, on 31st March, 2016

through E-Form INC-28 and the Scheme of demerger took effect from the appointed date i.e. 1st April, 2014.

VIII. DISCLOSURES During the year under review, besides the transaction

reported elsewhere in the Annual Report, there were no other related party transactions with the promoters, Directors and the Management that has a potential conflict with the interest of the Company at large.

The Board has approved a policy for related party transactions which has been uploaded on the website of the Company and can be accessed at http://www.mandhana.com/investorRelation.php:

All the transactions with related parties are periodically placed before the Audit Committee. Transactions with related parties, as per requirements of Accounting Standards 18, are disclosed in Note no. 33 to the Accounts in the Annual Report and they are not in conflict with the interest of the Company at large.

During the financial year 2015-16, the Company had managed the foreign exchange risk and hedged to the extent considered adequate. The Company enter in to forwards contracts for hedging net foreign exchange exposures against exports and import.

No strictures/penalties have been imposed on the Company by any Statutory Authorities on any matters relating to the capital markets during the last 3 years.

56


VIGIL MECHANISM / WHISTLE BLOWER POLICY FOR DIRECTORS AND EMPLOYEES

The Company has established a Vigil Mechanism, which includes a Whistle Blower Policy, for its Directors and Employees, to provide a framework to facilitate responsible and secure reporting of concerns of unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct & Ethics. The details of establishment of Vigil Mechanism / Whistle Blower Policy is posted on the website of the Company and the weblink to the same is http://www.mandhana.com/investorRelation.php. No Director / employee has been denied access to the Audit Committee.

COMPLIANCE WITH MANDATORY / NON MANDATORY REQUIREMENTS

During the year, the Company has complied with all the applicable mandatory requirements of the Listing Regulations.

The status of compliance with discretionary recommendations and adoption of the non-mandatory requirements as specified in regulation 27(1) of the SEBI (LODR) Regulations, 2015, is provided below:

a. The Board: The Chairman of the Company is Executive Director.

b. Shareholder Rights: Half-yearly and other Quarterly financial statements are published

in newspapers, uploaded on company’s website www.mandhana.com and same are not being sent to the shareholders.

c. Modified Opinion(s) in Audit Report: The explanations towards the statements in the Auditor’s Report qualifying the financial statements, are provided in the Director’s Report forming part of this Annual Report.

d. Separate posts of Chairperson and Chief Executive Officer: Mr. Purushottam C. Mandhana is the Chairman and Managing Director of the Company.

e. Reporting of Internal Auditor: The Internal Auditor reports to the Audit Committee.

IX. MEANS OF COMMUNICATION The Company published Unaudited Quarterly/

Half Yearly Results and Audited Yearly results in the Economic Times/ Business Standard /Free Press Journal (English) and Maharashtra Times/ Navshakti (Regional).

As per requirements of Listing Agreement applicable for the part of the year and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, all data relating to the quarterly financial results, shareholding pattern etc. is provided on the Company’s website i.e. www.mandhana.com within the time frame prescribed in this regard.

X. GENERAL SHAREHOLDERS’ INFORMATION: The Company is registered in the state of Maharashtra, India. The Corporate Identification Number (CIN) allotted to

the Company by Ministry of Corporate Affairs (MCA) is L17120MH1984PLC033553.1. Annual General Meeting

- Date and Time : 30th December, 2016 at 10:00 a.m.- Venue : Plot No. C-2, M. I. D. C, Tarapur Industrial Area, Boisar, Dist: Palghar - 401 506.

2. Financial Calendar for announcement of results(tentative)

:

a) Unaudited Third Quarter Results : On or before 14th February, 2017b) Annual Results (Audited) : On or before 30th May, 2017

3. Financial Year Reported : 1st April, 2015 to 31st March, 20164. Dividend Payment Date : No dividend has declared by the Company for the financial year 2015-165. Face Value of equity Shares : Rs.10/- per equity share6. Date of Book Closure : Saturday, 24th December, 2016 to Friday, 30th December, 2016 (both day inclusive)7. Listing on Stock Exchanges : The Equity Shares of the Company are listed on

(1) BSE Limited (BSE)(2) National Stock Exchange of India Limited (NSE) The Company has paid the listing fees to the Stock Exchanges within the prescribed time.

8. Stock Code/ Symbol - ISIN : INE087J01010- Script Code for BSE : 533204- Script Symbol for NSE : MANDHANA

9. Market price Data

57


The Market price data covering period April 2015 to March 2016 is given below:

MonthBSE NSE

High Date Low Date High Date Low DateRs. Rs. Rs. Rs.

April 2015 314.00 30.04.2015 265.00 30.04.2015 301.90 17.04.2015 265.10 30.04.2015May 2015 284.80 06.05.2015 244.10 12.05.2015 287.90 04.05.2015 244.10 13.05.2015June 2015 269.00 25.06.2015 242.20 12.06.2015 268.50 18.06.2015 242.40 12.06.2015July 2015 270.50 15.07.2015 250.00 14.07.2015 273.00 15.07.2015 249.10 14.07.2015August 2015 277.60 05.08.2015 242.00 25.08.2015 274.00 05.08.2015 242.00 25.08.2015September 2015 285.00 15.09.2015 250.10 02.09.2015 287.60 02.09.2015 249.10 08.09.2015October 2015 278.00 05.10.2015 263.10 26.10.2015 278.00 01.10.2015 262.40 27.10.2015November 2015 279.40 04.11.2015 262.90 30.11.2015 290.00 04.11.2015 261.20 30.11.2015December 2015 310.00 31.12.2015 261.30 02.12.2015 311.00 31.12.2015 261.30 02.12.2015January 2016 344.00 04.01.2016 279.40 20.01.2016 344.95 04.01.2016 281.10 20.01.2016February 2016 304.90 09.02.2016 267.00 29.02.2016 307.20 09.02.2016 265.00 29.02.2016March 2016 345.00 22.03.2016 268.20 01.03.2016 317.00 18.03.2016 268.20 01.03.2016

Trading Volumes

The traded volume of shares at BSE and NSE were as follows:

Month BSE (Shares) NSE (Shares) Total (Shares)April 2015 2,68,724 1,78,051 4,46,775May 2015 5,17,244 5,45,440 10,62,684June 2015 3,62,931 3,81,566 7,44,497July 2015 6,34,974 6,19,832 12,54,806August 2015 1,64,746 2,20,337 3,85,083September 2015 4,06,335 4,05,563 8,11,898October 2015 5,86,215 5,75,729 11,61,944November 2015 3,70,219 3,99,032 7,69,251December 2015 6,43,919 11,09,170 17,53,089January 2016 4,30,333 8,30,565 12,60,898February 2016 5,14,269 5,76,253 10,90,522March 2016 6,24,252 8,43,816 14,68,068

Performance in comparison to broad-based indices such as BSE/NSE Sensex (Month-end closing):

Month BSE NSEShare Price Sensex Share Price S&P CNX Nifty

April 2015 279.90 27,011.31 268.90 8,181.50May 2015 251.10 27,828.44 252.90 8.433.65June 2015 257.70 27,780.83 257.75 8,368.50July 2015 260.40 28,114.56 260.65 8,532.85August 2015 260.90 26,283.09 259.50 7,971,30September 2015 270.50 26,154.83 273.45 7,948.90October 2015 266.90 26,656.83 268.55 8,065.80November 2015 264.10 26,145.67 261.95 7,935,25December 2015 307.80 26,117,54 308.45 7,946.35January 2016 292.20 24,870.69 293.00 7,563.55February 2016 274.20 23,002.00 274.20 6,987.05March 2016 291.50 25,341,86 293.50 7,738.40

58


27,011.31

27828.44

27,780.83

28,114.56

26,283.09

26,154.8326,656.83 26,145.67

26,117.5424,870.69

23,002.00

25,341.86

279.9

251.1

257.7260.4

260.9270.5

266.9 264.1

307.8

292.2

274.2

291.5

210

220

230

240

250

260

270

280

290

300

310

22,000.00

Apr-15

May-15

Jun-15

Jul-1

5Aug-15

Sep-15

Oct-15

Nov-15

Dec-15

Jan-16

Feb-16

Mar-16

23,000.00

24,000.00

25,000.00

26,000.00

27,000.00

28,000.00

29,000.00

30,000.00

Sensex Share Price

Apr-15

May-15

Jun-15

Jul-1

5Aug-15

Sep-15

Oct-15

Nov-15

Dec-15

Jan-16

Feb-16

Mar-16

8,181.508,433.65 8,368.50 8,532.85

7,971.307,948.90

8,065.807,935.25

7,946.35

7,563.556,987.05

7,738.40

268.9

252.9

257.75260.65 259.5

273.45

268.55261.95

308.45293

274.2

293.5

220

230

240

250

260

270

280

290

300

310

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00

10,000.00

S&P CNX Nifty Share Price

XI. Registrar and Transfer Agent : XII. Debenture Trustee Link Intime India Private Limited(Unit : Mandhana Industries Limited)C/13, Pannalal Mills Compound,L. B. S. Marg, Bhandup (W),Mumbai 400 078.Tel : 022 – 2594 6970Fax : 022 – 2594 6969E.mail: [email protected]: www.linkintime.co.in

IDBI Trusteeship Services LimitedAsian Building, Ground Floor,17, R. Kamani Marg, Ballard Estate, Mumbai – 400 001.Tel : +91 22 4080 7000Fax : +91 22 6631 1776E-mail: [email protected] : www.idbitrustee.co.in

59


XIII. Plant Locations :

MANDHANA DYEINGPlot No. E-25, MIDC, Tarapur Industrial Area,District Palghar – 401 506.

MANDHANA WEAVING HOUSE (Shirting Division)Plot No. C-2, MIDC, Tarapur Industrial Area,District Palghar – 401 506

MANDHANA WEAVING HOUSEPlot No. E-33, MIDC, Tarapur Industrial Area,District Palghar – 401 506.

MANDHANA DYEING – UNIT IIPlot No. C-3, MIDC, Tarapur Industrial Area,District Palghar – 401 506.

Garment DivisionPlot No. E-132, MIDC, Tarapur Industrial Area,District Palghar – 401 506.

Garment DivisionB Wing, Ganpati Baug,T. J. Road, Sewree (West)Mumbai – 400 015.

Baramati Hi-Tech Textile Park Ltd.,Plot No.17-20, Plot No.E-1/2, M.I.D.C. Industrial Area, Baramati – 413 133.

Garment DivisionPlot No.31, Survey No.161, Laggare Village, Yeshwanthpura, Hobli, Bangalore North Taluka,Bengaluru – 560 058.

Garment DivisionNo. 26/A, Peenya, II Phase, Peenya Industrial Area, Near NTTF Bus Stop, Bengaluru - 560 058

Garment DivisionNo. 21-D, 2nd Phase, Peenya Industrial Area, Bengaluru - 560 058

Garment DivisionUnit No. 36/2, Maruti Plaza, Mabanayakanahalli, Dasanpura, Hobli, Tumur Road, Bengaluru - 562 123

XIV. Share Transfer System

Link Intime India Private Limited is the Registrar and Transfer Agents of the Company. Transfer of shares are approved by the Board of Directors or the Stakeholders’ Relationship Committee which meets at opportune time and if the documents are complete and in order in all respects, the same are registered and returned to the transferees within the stipulated time.

XV. Dematerialization of shares

The Company has signed agreements with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and Link Intime India Private Limited to offer depository services to its shareholders and has paid respective charges for the benefit of the members.

Your Company confirms that the entire Promoters’ holding have being converted into the electronic form and the same is in line with the directives issued by the Securities and Exchange Board of India.

The shares of your Company are regularly traded at the BSE Limited and the National Stock Exchange of India Limited and hence have good liquidity.

XVI. Voting through electronic means

Pursuant to Section 108 of the Companies Act, 2013 and the rules made thereunder, every listed company is required to provide its members facility to exercise their right to vote at general meetings by electronic means.

The Company has entered into an arrangement with CDSL, the authorized agency for this purpose, to facilitate such e-voting for its members.

The shareholders would therefore be able to exercise their voting rights on the items put up in the Notice of AGM, through such e-voting method.

e-Voting shall be open for a period of three days, i.e. from Tuesday, 27th day of December, 2016 at 10:00 a.m. to Thursday, 29th day of December, 2016 till 5:00 p.m. and Mr. Nitin R. Joshi, Practicing Company Secretary shall act as the scrutinizer for the e-voting process.

Detailed procedure is given in the Notice of the AGM and also placed on the website of the Company.

Shareholders may get in touch with the Company Secretary for further assistance.

60


XVII. (a) Distribution of Shareholding as on 31st March, 2016

No. of Shares No. of Holders % of Shareholders No. of Shares % of Shareholding1 – 500 2035 83.78 211273 0.64501 – 1000 122 5.02 95975 0.291001- 2000 72 2.96 111295 0.342001 – 3000 34 1.40 84086 0.253001 – 4000 17 0.70 62798 0.194001 – 5000 16 0.66 75977 0.235001 – 10000 28 1.15 217817 0.6610001 & Above 105 4.32 32264692 97.41

(b) Shareholding pattern as on 31st March, 2016

Category Code

Category of Shareholder No. of Shareholders

Total no. of shares

Total Shareholding

as a percentage

of total no. of Shares

(A) Shareholding of Promoter and Promoter Group (A)

18 2,40,63,618 72.65

(B) Public Shareholding (1) Institutions (a) Mutual Funds/ UTI 0 0 0 (b) Venture Capital Funds 0 0 0 (c) Alternate Investment Funds 0 0 0 (d) Foreign Venture Capital Investors 0 0 0 (e) Foreign Portfolio Investor(Corporate) 7 2,76,074 0.83 (f ) Financial Institutions/ Banks 5 12,55,925 3.79 (g) Insurance Companies 1 3,50,000 1.06 (h) Provident Funds / Pension Funds 0 0 0 Central Government/ State Government 0 0 0 (i) Any Other (specify): FIIs 3 31,560 0.10Sub Total (B) (1) 16 19,13,559 5.78(2) Central Government/ State Government(s)/

President of India0 0 0

Sub Total (B) (2) 0 0 0(2) Non-Institutional

(a) Bodies Corporate 130 52,20,522 15.76(b) Individuals i. Individual shareholders holding

nominal share capital upto Rs. 2 Lac2,050 8,21,794 2.48

ii. Individual shareholders holding nominal share capital in excess of Rs. 2 Lac

16 7,30,148 2.20

61


Category Code

Category of Shareholder No. of Shareholders

Total no. of shares

Total Shareholding

as a percentage

of total no. of Shares

(c) Any Other (specify): i. Hindu Undivided Family 111 2,87,606 0.87 ii. Director/ Relative 1 20,000 0.06 iii. Clearing Member 47 48,651 0.15 iv. NRI (Repatriate) 18 17,149 0.05 v. NRI (Non-repatriate) 6 866 0.00Sub Total (B) (3) 2,379 71,46,736 21.57Total Public Shareholding (B) = (B)(1) + (B)(2)+(B)(3)

2,395 90,60,295 27.35

TOTAL (A) + (B) 2,413 3,31,23,913 100.00

(C) Shares held by Custodian and against which Depository Receipts have been issued

0 0 0

GRAND TOTAL (A)+(B)+(C) 2,413 3,31,23,913 100.00Note: In the Promoters and Promoters’ Group, the shareholding spread across various demat accounts of the shareholders are consolidated on the basis of Permanent Account Numbers. However, total number of demat accounts / Folios of the shareholders under this category stands at 34.

(c) Dematerialization of shares and liquidity

Out of 3,31,23,913 equity shares 3,31,14,360 equity shares representing 99.97% are in dematerialized form as on 31st March, 2016. The equity shares of the Company are traded at BSE Limited and National Stock Exchange of India Limited.

(d) Reconciliation of Share Capital Audit Report

In accordance with SEBI guidelines, quarterly Secretarial Audit is undertaken by a Practicing Company Secretary for reconciling the total admitted capital with the records of the depositories, viz. NSDL and CDSL.

The Reconciliation of Share Capital Audit inter alia, certifying that the shares in demat mode and in physical form tally with the issued/paid up capital, the Register of Members is duly updated, etc.; is submitted to BSE Limited and National Stock Exchange of India Limited on a quarterly basis. The said report is also placed before the meetings of Board of Directors.

(e) Disclosure in compliance with Regulation 39(4) of the SEBI (Listing Obligations & Disclosure

Requirements) Regulations, 2015 for the year 2015-16

1. Aggregate no. of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the beginning of the year

Shareholders – 6 Outstanding Equity Shares – 362

2. No. of shareholders who approached the issuer for transfer of shares from the Unclaimed Suspense Account during the year

Shareholders – NIL

3. No. of shareholders to whom shares were transferred from the Unclaimed Suspense account during the year

Shareholders – NIL

4. Aggregate no. of shareholders and the outstanding shares lying in the Unclaimed Suspense Account at the end of the year.

Shareholders – 6 Outstanding Equity Shares – 362

5. The voting rights on the aforesaid shares lying in the Unclaimed Suspense Account shall remain frozen till the rightful owners of such shares claim the shares.

62


XVIII. STATUS OF COMPLIANCE WITH MANDATORY REQUIREMENTS AND ADOPTION OF NON MANDATORY REQUIREMENTS:

i. The Company, being a listed public limited company as on 31st March, 2016, attracts provisions of Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR). The Company has complied with the mandatory provisions of Regulation 27 of the SEBI LODR.

ii. Adoption/non-adoption of non-mandatory requirement as on 31st March, 2016.

(a) The Company has an Executive Chairman and the office provided to him for performing his executive duties is also utilized by him for discharging his duties as a Chairman. No separate office is maintained for the non-executive Chairman of the Audit Committee, Nomination & Remuneration Committee and the Stakeholders’ Relationship Committee, but secretarial and other assistance is provided to them whenever needed, to enable them to discharge their responsibility effectively.

(b) The Company has also adopted the non-mandatory requirement as specified in Annexure - XIII of the Listing

Agreement regarding unqualified financial statements.

XIX. ADDRESS FOR CORRESPONDENCE

M/s Link Intime India Private Limited(Unit : Mandhana Industries Limited)C/13, Pannalal Mills Compound,L. B. S. Marg, Bhandup (W),Mumbai – 400 078.Tel : 022 – 2594 6970Fax :022 - 2594 6969email : [email protected]

The Company Secretary,Mandhana Industries Limited205-214, Peninsula Centre,Dr. S. S. Rao Road,Mumbai – 400 012.Tel : 022 – 4353 9191Fax : 022 – 4353 9358email : [email protected]

For and on behalf of the Board of Directors

PURUSHOTTAM C.MANDHANA(Chairman and Managing Director)

Place : MumbaiDate : 2nd December, 2016

63


CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER CERTIFICATION

To, The Board of Directors, Mandhana Industries Limited

I, undersigned in my capacity as Chairman and Managing Director and Chief Financial Officer of Mandhana Industries Limited (“The Company”), to the best of my knowledge and belief, certify that:

a) I have reviewed the Financial Statements and the Cash Flow Statement for the year ended 31st March, 2016 and based on my knowledge and belief :

i. these statements do not contain any materially untrue statements or omit any material fact or contain statements that might be misleading;

ii. these statements together present a true and fair view of the Company’s affair and are in compliance with the existing Accounting Standards, applicable Laws and Regulations.

b) I further state that to the best of our knowledge and belief, there are no transactions entered into by the Company during the year which are fraudulent, illegal or violative of companies code of conduct.

c) I hereby declare that all the members of the Board of Directors and Senior Management Personnel have confirmed compliance with the Code of Conduct as adopted by the Company.

d) I am responsible for establishing and maintaining internal controls for financial reporting and I have evaluated the effectiveness of the internal control system over Financial Reporting of the Company and have disclosed to the Auditors and the Audit Committee, deficiencies in the designs or operations of such internal controls, if any of which they are aware and the steps I have taken or proposed to take to rectify the deficiencies.

e) I have indicated, wherever applicable to the Auditors and Audit Committee :

i. significant changes, if any, in the internal control over financial reporting during the year;

ii. significant changes, if any, in the accounting policies made during the year and that the same have been disclosed in the notes to the financial statements; and

iii. instances of significant fraud of which I have become aware and involvement therein, if any, of the management or an Employee having a significant role in the Company’s internal control system over financial reporting.

For MANDHANA INDUSTRIES LIMITED

PURUSHOTTAM C.MANDHANA (Chairman and Managing Director)

Place : Mumbai Date : 2nd December, 2016

64


AUDITOR’S CERTIFICATE ON COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

To The Members of Mandhana Industries Limited

We have examined the compliance of conditions of Corporate Governance by Mandhana Industries Limited for the year ended 31st March, 2016, as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges for the period from April 1, 2015 to November 30, 2015 and the Chapter IV to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) from the period December 1, 2015 to March 31, 2016.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied in all material respects with the conditions of Corporate Governance as stipulated in the Listing Agreement with the Stock Exchanges / Listing Regulations for the year ended 31st March, 2016.

We further state that our examination of such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Vishal H. shah & Associates

Chartered Accountants

Vishal H. Shah

Proprietor

Place : Mumbai Membership No: 101231

Date : 10th June, 2016 FRN : 116422W

65


INDEPENDENT AUDITOR’S REPORTTo the members of Mandhana Industries Limited

Report on the financial statements

We have audited the accompanying financial statements of Mandhana Industries Limited (“the Company’), which comprise the balance sheet as at 31 March 2016, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

The Company’s board of directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (‘the Act’) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016, and its profit and its cash flows for the year ended on that date.

Report on other legal and regulatory requirements

1 As required by the Companies (Auditors Report) Order, 2016 (‘the Order’), issued by the Central Government of India in terms of sub–section (11) of section 143 of the Companies Act, 2013,and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2 As required by section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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(b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The balance sheet, the statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of accounts.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2016 from being appointed as a director in terms of section 164(2) of the Act.

(f ) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure A”

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of ourinformation and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financial position.

ii. The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses on long term contracts including derivative contracts; and

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund.

FOR VISHAL H. SHAH & ASSOCIATESChartered AccountantsFRN -116422W VISHAL H. SHAHProprietorMembership No.-101231

Place : Mumbai Date : 24th May, 2016

ANNEXURE B REFERRED TO THE AUDITORS’ REPORT(Referred to in paragraph 1 under ‘Report on other legal and regulatory requirements’ of our report of even date)

i) (a) The Company is maintaining proper records to show full particulars including quantitative details and situation of all fixed assets.

(b) We are informed that the Company has formulated a program of physical verification of all the fixed assets over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Accordingly, the physical verification of the fixed assets has been carried out by management during the year and no material discrepancies were noticed on such verification.

(c) We are informed that title deeds in respect of all the immovable properties either free hold or lease hold are held in the name of the Company except for immovable property viz. factory building situated at Sewrree, Mumbai. Company has entered into Memorandum of Understanding but registered title deed is not executed in favour of the Company.

ii) We have relied on the Inventory Audit carried out by:

M/S KPND & Co., Chartered Accountants, for verification and valuation of inventory at Tarapur plants and warehouses and at all retail stores of the Company as on 31st March, 2016 and

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M/S B. Choraria & Mates, Chartered Accountants, for verification and valuation of inventory at Bangalore plants and warehouses of the Company as on 31st March, 2016.

We have framed our opinion on various areas of Inventory as mentioned below based on Inventory Audit Report submitted by the above Chartered Accountants Firms:

(a) As explained to us, inventory has been physically verified by management at reasonable intervals during the year. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii) The Company has granted unsecured loan to a Private Limited Company covered in the register maintained under section 2(76) of the Companies Act, 2013.

(a) The terms and conditions of the grant of such loans are not prejudicial to the company’s interest;

iv) We are informed that Company has not contravened the provisions of S. 185 and S. 186 of The Companies Act, 2013 in respect of loans, investments and guarantees granted.

vi) We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules prescribed by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.

vii) (a) According to the information and explanations given to us and as per the records of the Company examined by us, in our opinion, the Company is regular in depositing undisputed statutory dues including provident fund, employees state insurance, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues with the appropriate authorities except for Income Tax. According to the information and explanations given to us, there were no undisputed amounts payable in respect of provident fund, employees state insurance, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues outstanding as at 31st March, 2016 for a period of more than six months from the date they became payable except for income tax mentioned below:

Name of the Statute Nature of the dues Amount (` in Cr)

Period to which the amount relates

Due Date

Income Tax Act, 1961 Corporate Tax 23.94 A.Y. 2015-16 Various Dates upto 31st March 2015

Income Tax Act, 1961 Corporate Advance Tax 29.47 A.Y. 2016-17 Various Dates upto 31st march 2016

(b) According to the information and explanations given to us and according to the records of the Company, there are no dues of income-tax or sales-tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited with the appropriate authorities on account of any dispute except as given below:

Name of the Statute

Nature of the disputed dues

Amount (` in crores)

Period to which the amount

relates

Forum where dispute is pending

Central Excise Act, 1944

Excise Duty 2.91 May’01 to May’03 Mumbai High Court & Settlement Commission

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viii) According to the records of the Company examined by us and the information and explanations given to us, the Company has defaulted in repayment of dues to the banks at the balance sheet date.

Name of the Bank Amount of Default (` In Crores)

Due Date Nature of facility

Allahabad bank 7.5 31.03.2016 Term loanAllahabad bank 0.21 22.03.2016 Term loanAllahabad bank 1.29 31.03.2016 Term loanAllahabad bank 2.97 31.03.2016 Term loanBank of Baroda 3.00 31.03.2016 Term loanState bank of India 0.47 31.03.2016 Term loanAxis Bank* 2.50 31.03.2016 Term loan

*This Term loan is transferred to Mandhana Retail Venture Limited due to scheme of demerger.

ix) The term loans outstanding at the beginning of the year have been applied for the purposes for which they were raised and those raised during the year were not strictly identifiable in terms of their end use.

x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of fraud by the Company or on the Company by its officers / employees noticed or reported during the year, nor have we been informed of such case by management.

xi) Company has paid managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act.

xiii) Company has carried out all transactions with the related parties in compliance with Section 188 and 177 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc as required by the accounting standards and Companies Act, 2013.

Clauses 3(iii)(b), 3(iii)(c), 3(v), 3(xii), 3(xiv) and 3(xv) of the Order are not applicable to the Company.



Annexure A referred to in paragraph 1(f) of Our Report of even date to the members of MANDHANA INDSUSTRIES LIMITED on the Financial Statements of the company for the year ended 31st March, 2016

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

We have audited the internal financial controls over financial reporting of MANDHANA INDUSTRIES LIMITED (“the Company”) as of 31st March 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls

based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (‘the Guidance Note’) issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Act .

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Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting are established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement in the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

Internal financial control over financial reporting is a process designed by the Company to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made

only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Further, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate owing to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate or for other reasons.

Opinion

In our opinion, Based on representations provided to us by the Management, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.



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70

BALANCE SHEET AS AT 31ST MARCH, 2016(` In Lacs)

PARTICULARS NOTE No.

AS AT 31.03.2016

AS AT 31.03.2015

I. EQUITY AND LIABILITIES1 Shareholders' Funds

a) Share Capital 1 3,312.39 3,312.39 b) Reserves & Surplus 2 57,055.40 52,139.76

60,367.79 55,452.15 2 Non-current liabities

a) Long-Term Borrowings 3 22,463.99 25,275.82 b) Deferred Tax Liabilities(Net) 4 8,375.29 8,154.36 c) Other Long Term Liabilities 5 49.04 26.75 d) Long Term Provisions 6 101.97 95.50 Total Non Current Liabilities 30,990.29 33,552.43

3 Current Liabilitiesa) Short-Term Borrowings 7 62,224.14 50,508.72 b) Trade Payables 8,850.83 9,401.42 c) Other Current Liabilities 8 14,599.88 12,946.64 d) Short Term Provisions 9 6,212.95 3,254.39 Total Current Liabilities 91,887.80 76,111.17

TOTAL EQUITY AND LIABILITIES 1,83,245.87 1,65,115.75

II. ASSETS1 Non-Current Assets

a) Fixed Assets 10 i) Tangible Assets 52,670.40 54,919.22 ii) Intangible Assets 5.54 35.60 Sub Total 52,675.94 54,954.82

b) Long Term Loans and Advances 11 3,231.82 3,367.90 Total Non-Current Assets 55,907.76 58,322.73

2 Current Assetsa) Current Investments 12 0.25 0.25 b) Inventories 13 54,243.85 53,213.21 c) Trade Recievables 14 52,918.54 40,836.88 d) Cash and Cash Equivalents 15 1,143.55 1,160.47 e) Short-term loans and advances 16 15,138.51 8,442.14 f ) Other Current Assets 17 3,893.41 3,140.07 Total Current Assets 1,27,338.11 1,06,793.02

TOTAL ASSETS 1,83,245.87 1,65,115.75

The Notes are integral part of the Balance Sheet and Profit & Loss AccountAs per our report of even date attached FOR MANDHANA INDUSTRIES LIMITEDVISHAL H. SHAH & ASSOCIATESChartered Accountants Purushottam C. Mandhana Biharilal C. Mandhana FRN -116422W Chairman & Managing Director Director

Vishal H. Shah Manish.B. Mandhana Vinay Sampat Proprietor Joint Managing Director Company SecretaryMembership No:101231

Place : MumbaiDate : 24th May, 2016

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71

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2016(` In Lacs)

PARTICULARS NOTE No.

For Year Ended 31.03.2016

For Year Ended 31.03.2015

I IncomeRevenue From Operations 18 1,64,660.61 1,54,293.01

II Other Income 19 702.79 656.17

III Total Revenue (I + II) 1,65,363.40 1,54,949.18

IV ExpensesCost of Materials Consumed 20 72,846.89 68,996.60 Cost of goods Traded 21 35,712.60 39,465.76 Changes in inventories of finished good work-in-progress and Stock-in-Trade

22 808.15 (3,080.01)

Manufacturing and Operating Costs 23 16,047.28 14,584.66 Employee Benefit Expenses 24 10,182.56 7,558.74 Finance Costs 25 11,729.21 9,701.26 Depreciation & Amortisation Expenses 10 4,013.60 3,764.42 Other Expenses 26 4,801.84 4,056.13 Total Expenses 1,56,142.13 1,45,047.56

V Profit before tax ( III - IV ) 9,221.27 9,901.62

VI Tax ExpenseCurrent Tax 3,218.28 3,353.19 Deferred Tax 220.93 150.74

VII Profit (Loss) for the year (V - VI) 5,782.07 6,397.68 Income Tax paid for earlier Year 69.07 125.42 Balance carried to Balance Sheet 5,713.00 6,272.26

Earning Per Equity Share of ` 10 each Basic EPS ( ` ) 17.25% 18.94%Diluted EPS ( ` ) 17.25% 18.94%Weighted average number of shares outstanding

The Notes are integral part of the Balance Sheet and Profit & Loss AccountAs per our report of even date attached FOR MANDHANA INDUSTRIES LIMITEDVISHAL H. SHAH & ASSOCIATESChartered Accountants Purushottam C. Mandhana Biharilal C. Mandhana FRN -116422W Chairman & Managing Director Director



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CASH FLOW STATEMENT FOR THE PERIOD FROM 1/4/2015 TO 31/03/2016 (` In Lacs)

Current Year Previous Year Cash Flows from Operating Activities

Net Profit before taxation and extraordinary item 9,221.27 9,901.62

Adjustments for: Depreciation charged to Profit & Loss A/c 4,013.60 3,764.42 Provisionfor Diminution in Value of Current Investments (8.22) Finance Charges and Gain/Loss on variation in Foreign Exchange Rates

557.69 199.20

Surplus on sales of Investment (Net) - (19.37) Income from conversion of Stock to investment - 12.18 Land premium w/off 15.14 15.14 Loss on sale of fixed assets 76.23 3.51 Profit on sale of fixed assets - (0.50) Interest Expenses 11,171.52 9,502.06

Operating profit before working capital changes 25,055.44 23,370.03

Decrease (Increase) in Inventories (1,030.64) (1,116.57) Decrease (increase) in Debtors (12,081.65) (2,498.44) Decrease (Increase) in Shor term loan and Advances (7,498.27) (1,852.80) (Decrease) Increase in Creditors (550.59) 887.67 (Decrease) Increase in other liabilities 2,357.56 238.11

Cash generated from operations 6,251.85 19,028.01 Income Tax Paid (340.18) (3,338.01)

Net cash flow from / (used in) operating activities 5,911.67 15,690.00

Cash flows from investing activities Purchase of fixed assets (1,888.67) (4,315.08) Proceeds from sales of fixed assets 62.59 30.61 Capital Advances against Fixed Assest 184.64 2,110.30 FD placed with banks (170.41) (47.44) Investments - 94.13

Net cash from / (used in) investing activities (1,811.85) (2,127.48)

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CASH FLOW STATEMENT FOR THE PERIOD FROM 1/4/2015 TO 31/03/2016 (` In Lacs)

Current Year Previous Year Cash flow from financing activities

Increase in share capital - - Increase in long term borrowings (Net) (3,476.00) (8,304.55) Increase (Decrease) in Working Capital finance 9,657.73 5,626.87 Increase (Decrease) in unsecured loans 1,500.00 (300.00) Dividend Paid (inclusive of dividend tax) (797.37) (775.07) Interest paid (11,171.52) (9,502.06)

Net cash from financing activities (4,287.15) (13,254.79)

Net increase in cash and cash equivalents (187.33) 307.71

Cash & cash equivalents at the beginning 422.48 114.77

cash & cash equivalents at the end 235.15 422.48 (As per note)

(187.33) 307.71

(The cash flow statement has been prepared in accordance with the requirement of Accounting Standard AS - 3 "Cash Flow Statement" issued by The Institute Of Chartered Accountants of India.

As per our report of even date attached FOR MANDHANA INDUSTRIES LIMITEDVISHAL H. SHAH & ASSOCIATESChartered Accountants Purushottam C. Mandhana Biharilal C. Mandhana FRN -116422W Chairman & Managing Director Director



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NOTES TO THE FINANCIAL STATEMENT

(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015NOTE-1 - SHARE CAPITAL

Authorised4,99,90000 Equity Shares of ` 10/- each 4,999.00 4,999.00 10,000 preference shares of ` 10 /- each 1.00 1.00

5,000.00 5,000.00 Issued, Subscribed & Paid Up

3,31,23,913 Equity shares of ` 10 each fully paid up 3,312.39 3,312.39

TOTAL 3,312.39 3,312.39

The Company has only one class of equity shares having at par value of ` 10 per share. Each shareholder is eligible for one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders, except in case of interim dividend. In the event og liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.

Disclosure pursuant to Note no. 6(A)(g) of Part I of Schedule VI to the Companies Act, 1956 (if more than 5%)

Name of Shareholder As at 31st March,2016 As at 31st March,2015No. of

Shares held% of

Holding No. of Shares

held% of Holding

PRIYAVRAT P. MANDHANA JT. PURUSHOTTAM C. MANDHANA

38,03,709 11.48 36,13,140 10.91

PURUSHOTTAM C. MANDHANA (HUF) 32,20,600 9.72 32,14,000 9.70 MANISH B. MANDHANA JT. SANGEETA M. MANDHANA 22,47,649 6.79 22,10,454 6.67 PURUSHOTTAM C. MANDHANA JT. PREMA P. MANDHANA 21,39,681 6.46 20,93,081 6.32 PREMA P. MANDHANA JT. PURUSHOTTAM C. MANDHANA 21,95,609 6.63 20,75,734 6.27 SUDHA B. MANDHANA JT. BIHARILAL C. MANDHANA 22,56,352 6.81 20,85,970 6.30 BIHARILAL C. MANDHANA JT. SUDHA B. MANDHANA 17,02,065 5.14 16,82,000 5.08

1,75,65,665 1,69,74,379

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(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015

NOTE 2 RESERVES AND SURPLUS A. Capital Reserve ( Special Capital Incentive )

Opening Balance 25.00 25.00 Add: Addition during the year - -Closing Balance 25.00 25.00

B. Share Premium 10,947.62 10,947.62 Add: Addition during the year - -Closing Balance 10,947.62 10,947.62

C. General Reserve Opening Balance 5,314.97 4,514.97 Add: Addition during the year - 800.00 Closing Balance 5,314.97 5,314.97

D. Debentures Redemption ReserveOpening Balance 1,900.00 2,000.00 Add: Addition during the year - -Less: Transfer to Profit & Loss Account 475.00 100.00 Closing Balance 1,425.00 1,900.00

E. Surplus i.e Balance in Profit & Loss AccountOpening Balance* 33,952.17 29,341.58 Add: Surplus during the year 5,713.00 6,272.27 Transter from Debentures Redemption Reserve 475.00 100.00 Less: Proposed Dividends (Inclusive of Dividend Distribution Tax) 797.36 797.37 Less: Trasitional Provision for Depreciation as per Schedule II of the Companies Act 2013

- 164.32

Transfer to Reserves - 800.00 Closing Balance 39,342.80 33,952.17

TOTAL 57,055.40 52,139.76

* Due to demerger the an amount of ` 2208.26 was reduced from reserve & surplus on 31.03.14

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(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015

NOTE 3 LONG TERM LIABILITIES a) Debenture (Secured ) (Refer Note 1) 3,300.00 5,700.00

b) Term Loan (Secured ) (Refer Note 2) From Banks 19,163.99 19,575.82

TOTAL 22,463.99 25,275.82

Note 1 Debentures Outstanding at the year end are redeemable as follows

Nos Particulars Allotment Date

Debenture Holder

AS AT 31.03.2016

Redemption Ratio from Allotment Date

20 12.25 Secured Redeemable Non convertible Debentures of ` 10,00,000/- each

28-03-2013 L&T Finance Limited

1,20,00,000 10:10:10:10:15:15:15:15 redeemable at the end of 18th, 24th, 30th, 36th, 42nd,48th, 54th & 60th months respectively from the Allotment Date



1,80,00,000



1,80,00,000



1,80,00,000



1,80,00,000



1,80,00,000



1,80,00,000


28-03-2013 Allahabad Bank

1,05,00,000 30:30:40 redeemable at the end of 36th,48th &60th months respectively from the Allotment Date



1,05,00,000



1,40,00,000


28-03-2013 Bank of India 5,25,00,000 30:30:40 redeemable at the end of 36th,48th &60th months respectively from the Allotment Date


28-03-2013 Bank of India 5,25,00,000


28-03-2013 Bank of India 7,00,00,000


03-10-2013 Canara Bank 3,00,00,000 30:30:40 redeemable at the end of 36th, 48th & 60th months respectively from the Allotment Date


03-10-2013 Canara Bank 3,00,00,000


03-10-2013 Canara Bank 4,00,00,000

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Nos Particulars Allotment Date

Debenture Holder

AS AT 31.03.2016

Redemption Ratio from Allotment Date


15-03-2013 Indian Overeseas Bank

4,20,00,000 30:30:40 redeemable at the end of 36th,48th & 60th months respectively from the Allotment Date



4,20,00,000



5,60,00,000

All the Debentures are secured by all the movable & Immovable assets Situated at Plot no E-25 & E-33,MIDC Tarapur.

Note 2 Nature of Security and terms of repayment for Long Term secured borrowings

Sr no.

Name of Bank Sanctioned Amount

Balance Outstanding as on 31st March 2016 (` In Lacs)

Interest Rate at Period end

Nature of Securities Repayment terms of interest and principal

1 Corporation Bank, IFB, Mumbai.

Term Loan of ` 1237.00 Lac

NIL (154.80)

12.75% (13.35%)

Secured by Hypothecation of Fixed Assets except vehicles at Peenya Ind. Area, Bangalore

32 equal quarterly installments of ` 38.65 Lacs. Commencing from 30/04/2008, last instalment will fall due on 29/02/2016.

Term Loan of ` 2200.00 Lac (Inclusive of Buyer's Credit of ` 562.81 Lacs

1925.23 (667.83)

12.40% (13.50%)

Extension of Paripassu first charges on land & building and P&M of the Bangalore Unit no-2

Quarterly installments of ` 91.67 lacs each Commencing from the next quarter after a moratorium period of 12 month from the date of first drawndown.

2 Allahabad Bank,Nariman Point, Mumbai.


NIL (213.08)

NA (12.55%)

(Secured by Hypothecation of Plant & Machinery & Mortage of immovable properties at C-2, MIDC, Tarapur)

6 equal quarterly installments of ` 222.00 Lacs Commencing from 31/03/2013,last installment will fall due on 30/06/2015.


30.00 (93.04)

12.00% (12.55%)

10 equal quarterly installments of ` 21.00 Lacs Commencing from 31/03/2013,last installment will fall due 30/06/2016.


901.88 (1287.08)

12.00% (12.55%)

15 equal quarterly installments of ` 129.00 Lacs Commencing from 31/03/2013,last installment will fall due 30/09/2017


4381.44 (5155.44)

12.00% (12.55%)

25 equal quarterly installments of ` 257.82 Lacs Commencing from 31/03/2013,last installment will fall due 31/03/2020.

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Sr no.






4332.16 (1204.01)

12.00% (12.55%)

32 quarterly installlments with 1st installment of ` 90 Lacs falling due in June 2016, thereafter installments of ` 112.5 Lacs each for next 8 quarters, thereafter installment of ` 135 Lacs each for next 16 quarters, thereafter installments of ` 168.8 Lac each for next 4 quarters and for last 3 quarters installment of ` 225 lacs each ending March 2024.


750.00 (2874.84)

12.70% (13.25%)

8 quarterly installments with first installment of 250 Lac falling due in June 2014, thereafter 4 equal installement of 625 Lac each for next 4 quarters and last 3 installments of 750 Lacs each due in last 3 quarters ending March 2016.

3 Axis Bank Limited


1875.00 (2500.00)

13.00% (13.65%)

(Secured by Hypothecation of Plant & Machineries & Mortage of immovable properties of fixed assets of the Company excluding Assets charged on exclusive basis)

Repayable in 32 quarterly instalments commencing from 31/12/2010 and last instalment will fall due on 30/09/2018.

Bank of Baroda Term Loan of ` 8000.00 Lac

3000.00 (3750.00)

12.15% (12.75%)

Indian Bank Term Loan of ` 1250.00 Lac

468.70 (624.95)

13.70% (14.00%)

Punjab National Bank


1687.14 (2249.63)

14.00% (14.00%)

State Bank of India (Erstwhile State Bank of Saurashtra) *


561.97 (702.58)

13.75% (14.25%)

4 Axis Bank Limited

Term Loan of ` 9500.00 Lac (Inclusive of Buyer's Credit of ` 469.60 (Lacs)

3712.38 (4971.90)

13.00% (13.65%)

(Secured by Hypothecation of Plant & Machinery at Plot No. 17-20 & 34-39, Baramati Hitech Textile Park, MIDC, Baramati

32 equal quarterly installments of ` 297.00 Lacs Commencing from 31/12/2012and last instalment will fall due on 30/09/2020.

79


Sr no.





5 Bank of Baroda Term Loan of ` 1200.00 Lac

525.00 (675.00)

12.15% (12.75%)

(Secured by Hypothecation of specified plant & machinery installed at Plot No. E-33, MIDC, Tarapur)

In 32 quarterly instalments commencing from 31/12/2011 and last instalment will fall due on 30/09/2019.

6 Karur Vyasya Bank


1562.50 (2187.50)

12.40% (12.75%)

(first pari-passu charge secure by hypothecation of Plant & Machinery & Mortage of immovable properties situated at E-25 and E-33, MIDC, Tarapur)

16 equal quarterly installments of ` 156.25 Lacs commencing from Dec 2014 and with last installment falling due on Sept 2018.

7 Saraswat Bank Term Loan of ` 2000.00 Lac

2000.00 (NIL) 12.50% (12.75%)

(first pari-passu charge secure by hypothecation of Plant & Machinery & Mortage of immovable properties situated at E-25 and E-33, MIDC, Tarapur)

13 equal quarterly installments of ` 153.85 Lacs commencing from April 2018 and with last installment falling due on July 2020.

Installments falling due in respect of all the above long term loans including NCDs upto 31.03.2017(for Previous Year 31.03.2016) and installment due but not paid have been grouped under”Current maturities of Long Term debt”. (Refer Note 8)

NOTE 4 DEFERRED TAX LIABILITIES(` In Lacs)

Particulars Deferred Tax Liability/ (Asset) as at 01.04.2015

Current Year charge/(credit)

Deferred tax Liability/(Asset) as at 31.03.2016

Deferred Tax Liabilities:Difference between book and tax Depreciation 8208.34 227.00 8435.35 Deferred Tax AssetAdjustment on account of application of AS-15 (53.98) (6.08) (60.06)TOTAL 8,154.36 220.93 8,375.29

80


(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015

NOTE 5 OTHER LONG TERM LIABILITIESVehicle loans from Banks / Finance Co. 49.04 26.75

TOTAL 49.04 26.75

(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015

NOTE 6 LONG TERM PROVISIONSProvision for employee benefitsGratuity (unfunded) 101.97 95.50

TOTAL 101.97 95.50

(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015

NOTE 7 “SHORT TERM BORROWINGS”SecuredLoans repayable on demandFrom Banks 58,469.07 50,508.72 (Including ` 8,121.86 Lacs (Previous year ` 7,655.06 Lacs)in foreign currency)(The working capital loans / Packing Credit from Banks., are secured against hypothecation of present and future stock in trade and Book Debts )

(Of the above ` Nil (Previous year Nil) are further Guaranteed personally by the Promoter Directors.)

UnsecuredFrom Others 3,755.07 -

TOTAL 62,224.14 50,508.72

81


(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015

NOTE 8 “OTHER CURRENT LIABILITIES”Current Maturities of long-term debt 10,949.41 11,635.86 Deposits/Advances from Dealers, Agent etc. 228.25 227.00 Statutory Dues 209.75 185.20 Advance against Sales 1,739.21 105.60 Accured loss on outstanding Forward Contract 105.67 79.71 Salary Payable 805.29 447.66 Other Payables (Including Interest Payable on Debentures) 562.30 265.63

TOTAL 14,599.88 12,946.64

(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015

NOTE 9 “SHORT TERM PROVISIONS”(a) Provision for employee benefits Gratuity - Funded 74.73 63.33 Gratuity - Unfunded(b) Others Proposed Dividend 662.48 662.48 Tax on proposed Dividend 134.88 134.89

(b) Provision for Income Tax (Net of Advance Taxes) 5,340.87 2,393.69

TOTAL 6,212.95 3,254.39

82

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(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015

NOTE 11 “LONG TERM LOANS AND ADVANCES”Capital Advances* 960.00 1,144.64 Unsecured, Considered Goods

Security Deposits 2,271.82 2,223.26 Unsecured, Considered GoodsTOTAL 3,231.82 3,367.90

* Capital Advances Includes advance for Garment Project at Baramati

NOTE 12 "CURRENT INVESTMENTS"A. Details of Trade Investments

(` In Lacs)Sr. No.

Name of the Body

Corporate

Subsidiary / Associate

/ JV/ Controlled

Entity / Others

No. of Shares / Units

Quoted / Unquoted

Partly Paid / Fully paid

Amount in Lacs

Whether stated at

Cost Yes / No

If Answer to Column (9)

is 'No' - Basis of Valuation

31-03-16 31-03-15 31-03-16 31-03-15

(a) Investment Properties

NIL NIL NIL NIL

(b) Investement in Equity InstrumentsThe Saraswat Co-Op Bank Ltd

Others 2,500 2,500 Unquoted Fully Paid

0.25 0.25 YES

TOTAL 0.25 0.25

84


(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015NOTE 13 "INVENTORIES" Finished Goods 37,792.83 39,164.11 Raw Materials 13,008.39 11,358.48 Store & Spares 1,299.26 1,110.37 Work in Process 2,143.39 1,580.25 TOTAL 54,243.85 53,213.21

Details of Finished GoodsFINISHED GOODSGrey Fabric 19,672.56 16,697.46 Finish Fabric 15,338.39 18,648.69 Garments 2,781.88 3,817.96

37,792.83 39,164.11 Details of Raw MaterialsRAW MATERIALSYarn 1,498.74 1,858.15 Grey Fabric 10,122.24 6,340.07 Finish Fabric 1,387.41 3,160.26

13,008.39 11,358.48 Details of Work in ProgressWORK IN PROGRESSYarn 119.12 153.61 Finish Fabrics 1,629.24 1,282.04 Garments 395.03 144.60

2,143.39 1,580.25 For Mode of Valuation, refer Annexure I

(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015NOTE 14 “TRADE RECEIVABLES”Trade receivables outstanding for a period less than six months from the date they are due for paymentUnsecured, considered good* 52,096.71 40,479.63 Trade receivables outstanding for a period exceeding six months from the date they are due for paymentUnsecured, considered good 821.82 357.25 Unsecured, considered doubtful 115.25 115.25 Less: Provision for Doubtful Debts (115.25) (115.25)TOTAL 52,918.54 40,836.88 *Includes an amount of ` 505.83 Lacs receivable from Mandhana Retail Ventures Limited.

85


(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015

NOTE 15 “CASH AND CASH EQUIVALENTS”(i) Cash and Cash Equivalents

a. Balances with Banks 179.09 371.11 b. Cash on Hand 56.06 51.37

(ii) Other Bank Balancesa. Balances with banks to the extent held as margin money 908.40 737.99

TOTAL 1,143.55 1,160.47

* Margin Money of ` 382.15 lacs ( Previous Year ` 324.15 lacs ) paid for Bank Guaranty to Sales tax Department & MSEB and reamining for LC Margin due course of Business.

(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015NOTE 16 "SHORT TERM LOANS AND ADVANCES" a. Loans and advances to related parties 1.35 1,654.25

Mandhana Retail Ventures LimitedUnsecured, Considered Good

b. Others 15,137.15 6,787.89 Unsecured, Considered Good

TOTAL 15,138.51 8,442.14

(` In Lacs) AS AT

31.03.2016 AS AT

31.03.2015NOTE 17 "OTHER CURRENT ASSETS"a. Exports Incentives receivable 873.70 911.57 b. TUF Interest Subsidy Receivable 2,239.24 1,264.13 c. Claims and Other Receivable 48.41 54.96 d. Vat Refund Receivable 300.33 581.75 e. Forward Contract Premium Receivable 295.97 227.73 f. Pre Paid Expenses 135.75 99.93

TOTAL 3,893.41 3,140.07

86


(` In Lacs) For Y.E.

31.03.2016 For Y.E.

31.03.2015

NOTE 18 "REVENUE FROM OPERATIONS" Sale of Products1) Local Sales 1,35,470.42 1,33,995.91 2) Export Sales 23,817.99 16,416.59

Sale of Services1) Processing & Services Charges 3,243.65 2,519.83 2) Duty Drawbacks & Other Export Entitlements 2,128.55 1,360.68

TOTAL 1,64,660.61 1,54,293.01

Details of Sales of Prodcuts: (` In Lacs)Class of GoodsLocal GoodsFabrics 1,32,979.02 1,30,760.17 Garments 2,474.03 3,136.64 Yarn 17.37 99.10 (A) TOTAL 1,35,470.42 1,33,995.91

ExportsFabrics 7,914.99 2,315.71 Garments 15,903.00 14,100.88 (B) TOTAL 23,817.99 16,416.59


31.03.2016 For Y.E.

31.03.2015

NOTE 19 “OTHER INCOME”Interest Income 125.78 137.42 Foreign Exchange Fluctuation 468.04 325.11 Profit /(Loss) on Sale of Assets (76.23) (3.01)Profit on sale of Mutual Fund & Shares - 19.37 Provision for diminution in value of current investments - 8.22 Miscellaneous Income 185.21 169.05

TOTAL 702.79 656.17

87



31.03.2016 For Y.E.

31.03.2015

NOTE 20 "COST OF MATERIAL CONSUMED"

Opening Stock 11,358.48 13,330.60 Purchases 74,496.80 67,024.48

85,855.28 80,355.08 Less: Closing Stock 13,008.39 11,358.48 TOTAL 72,846.89 68,996.60


31.03.2016 % For Y.E.

31.03.2015%

Imported and Indigenous Raw Materials Consumed Imported 367.81 0.50% 784.83 1.14%Indigenous 72,479.08 99.50% 68,211.77 98.86%

72,846.89 100.00% 68,996.60 100.00%

(` In Lacs)Details of Raw Materials ConsumedClass of GoodsFabric 57,504.08 53,144.26 Yarn 15,342.81 15,852.34 TOTAL 72,846.89 68,996.60


31.03.2016 For Y.E.

31.03.2015

NOTE 21 “PURCHASE OF STOCK IN TRADE”Fabrics 35,506.65 39,383.69 Garments 205.95 82.07 TOTAL 35,712.60 39,465.76

88



31.03.2016 For Y.E.

31.03.2015

NOTE 22 “CHANGES IN INVENTORIES OF FINISHED GOOD WORK-IN-PROGRESS AND STOCK-IN-TRADE”Opening StockFinished Goods 39,164.11 35,780.94 Work-in-Progress 1,580.25 1,883.41

TOTAL 40,744.36 37,664.35

Closing StockFinished Goods 37,792.83 39,164.11 Work-in-Progress 2,143.39 1,580.25 TOTAL 39,936.21 40,744.36

Total Increase in Stock (808.15) 3,080.01


31.03.2016 For Y.E.

31.03.2015

NOTE 23 “MANUFACTURING AND OPERATING COSTS” Consumption of Auxilliary Materials 6,681.68 5,707.11 Packing Materials 630.73 576.08 Garment Stitching Charges 1,871.72 1,612.55 General Factory Expenses 55.72 61.24 Labour Charges 644.05 944.80 Power, fuel and water charges 5,611.28 5,198.54 Repair and Maintenance to machinery 102.24 150.85 Testing & Inspection Fees 141.54 163.58 Yarn Winding,Sizing & Weaving Charges 308.33 169.92 TOTAL 16,047.28 14,584.66

Imported and Indigenous Auxiliary Materials ConsumedParticulars AS AT

31.03.2016% AS AT

31.03.2015%

Imported 253.12 3.79% 126.58 2.22%Indigenous 6,428.56 96.21% 5,580.53 97.78%TOTAL 6,681.68 100.00% 5,707.11 100.00%

89



31.03.2016 For Y.E.

31.03.2015NOTE 24 "EMPLOYEE BENEFIT EXPENSES " Salary& Wages (inclusive of Bonus,Gratuity & other Allowances) 9,050.19 6,753.35 Contribution to P.F, ESIC, etc 877.26 576.61 Employee's Welfare and amenities 255.11 228.78 TOTAL 10,182.56 7,558.74


31.03.2016 For Y.E.

31.03.2015NOTE 25 “FINANCE COSTS”Banks/Financial Institutions for Term Loans 2,755.58 3,603.14 (Net of interest subsidy claim of ` 1073.55 Lacs (Previous Year 1348.89 lacs) under TUF scheme)Debenture 's Holder 944.83 1,013.64 Banks for Working Capital 7,034.71 4,816.26 Net Loss on Currency fluctuation and translation 557.69 199.20 Others 436.41 69.01 TOTAL 11,729.21 9,701.26


31.03.2016 For Y.E.

31.03.2015NOTE 26 “OTHER EXPENSES”Auditor's Remuneration 13.66 13.48 Bank Charges & Commission 335.29 375.33 Commission on Sales 436.15 358.24 Communication Expenses 52.34 50.16 Courier Charges 138.01 113.39 Director's Remuneration & Sitting Fees 498.75 496.31 Donations 105.37 2.56 Electricity Charges 37.71 37.19 Freight / Transportation (Net) 1,226.38 927.79 General Office Expenses 84.08 71.71 Insurance (Net) 76.61 85.66 Land Premium W/off 15.14 15.14 Legal & Licence Fees 53.69 43.26 Printing & Stationary Charges 59.32 42.12 Repair & maintenance 55.77 45.84 Proffesional Fees 284.75 337.36 Rent & Municipal Taxes 491.98 428.33 Octroi, Rates & Taxes 60.18 46.04 Advertisement & Sales Promotion Expenses 104.18 68.80 Travelling Expenses 316.26 236.39 Watch & Ward Exp. 111.82 90.75 Miscellaneous Expenses 244.44 170.27 TOTAL 4,801.84 4,056.13

Details of payments to auditors (included in Auditor's Remuneration)a. Statutory Audit Fees 10.25 10.11 b. Tax Audit Fees 3.42 3.37 TOTAL 13.66 13.48

90


27 Value of Imports calculated on C.I.F. basis in respect of:(` In Lacs)

Particulars F.Y. 2015-16 F.Y. 2014-15 a. Auxiliary Material, Yarn,Garment & Accessory 620.93 319.68 b . Capital Goods 27.43 1,033.35

28 Expenditure in Foreign Currency on account of: (` In Lacs)Particulars F.Y. 2015-16 F.Y. 2014-15 a. Export Sales Commission 182.80 87.64 b. Interest 468.52 1,300.80 c. Foreign Travelling 95.28 60.78 d. Others 144.35 158.29

29 Earnings in Foreign Currency on account of: (` In Lacs)Particulars F.Y. 2015-16 F.Y. 2014-15 Export of Goods calculated on FOB Value 23,817.99 16,416.59

30 A. No interest is paid / payable during the year to any enterprise registered under the MSME.

B. The quantum of dues to small scale industrial undertakings is not determined.

31 Balances of Debtors ,Creditors and Loans & Advances have been as per books, and are subject to confirmation.

32 Disclosures in respect of derivative instruments.

(a) Derivatives instruments outstanding.

(Figures In Lacs)Sr. No.

PARTICULARS CURRENCY FORWARD AMOUNT

C F.Y. 2015-2016

FORWARD AMOUNT

F.Y. 2014-2015

TYPE OF CONTRACT

1 Against Exports USD /INR USD 117.20 USD 112.57 SaleEUR/USD EUR 2.00 NIL SaleEUR/INR EUR 6.00 EUR 4.50 SaleGBP/INR NIL GBP 2.00 Sale

(b) All derivative and financial instruments acquired by the company are for hedging purpose only.

(c) Foreign currency exposures that are not hedged by derivative instruments:

(Figures In Lacs)Particulars Currency F.Y. 2015-2016 F.Y. 2014-2015Secured Loans USD 128.76 124.08Secured Loans EURO 2.03 4.86Secured Loans GBP Nil 0.03Outstanding Capital Commitments (Import LC) USD Nil Nil

EURO Nil Nil

91


33 Related Party Disclosures

1. Relationship :-

Key Management Personnel and their Relatives. Relationship Mr. Purushottam C. Mandhana Chairman & Managing DirectorMr. Biharilal C. Mandhana Executive DirectorMr. Manish B. Mandhana Joint Managing DirectorMrs. Prema P. Mandhana Wife of Mr. Purushottam MandhanaMr. Priyavrat P. Mandhana Son of Mr. Purushottam MandhanaMrs. Sudha B. Mandhana Wife of Mr. Biharilal MandhanaMrs. Sangeeta M. Mandhana Wife of Mr. Manish MandhanaMs. Preeti P. Mandhana Daughter of Mr. Purushottam Mandhana

b) Entities over which key Management Mahan Synthetic Textiles Private Limited Personnel and their relatives are able Balaji Corporation To exercise significant influence Golden Seam Industries Pvt. Ltd.

Mandhana Retail Vantures limited

2. Transactions with related parties :

(` in Lacs)Particulars Referred in

1(a) Above Referred in 1(b) Above

Purchases :Fabrics & Garments 1.52

(6.82)Sales :Fabrics & processing chgs. 2,528.48

(3,124.56)Expenses :Directors Remuneration & Perquisites 480.00

(480.00)Salary to Relatives of Directors 29.47

(19.77)Rent To Directors & Relatives of Directors 53.08

(47.82)Deposits against premises: 2,002.00

(2,002.00)Note:- Figures in brackets represents previous years figure.

Outstanding :

Advances/(Payable) (net) (478.82) 2,104.50

92


34 OPERATING LEASE

The Company has entered in to non-cancelable operating lease. The tenure of such agreements ranges from eleven month to seventy two months. There are no purchase option in these agreements. Lease agreements provide the option to Company to renew the lease period at the end of lease period.

DUE TOTAL MINIMUM LEASE PAYMENTS OUTSTANDING

AS AT 31ST MARCH,2016

AS AT 31ST MARCH,2015

Not later than one year 466.79 427.55Later than one year and not later than five year' 842.53 1082.71later than five year - - Total 1309.31 1,510.26 Operating lease rentals debited to profit and loss accounts (net) 474.52 430.77Operating lease capitalized to Fixed Assets NIL NIL

35 DISCLOSURES PURSUANT TO ACCOUNTING STANDARD -15 “EMPLOYEE BENEFITS”

Consequent to the adoption of Accounting Standard on Employee Benefits (AS-15) (Revised 2005) issued by the institute of Chartered Accountants of India, the following disclosers have been made as required by the Standard.

A) Defined Contribution Plans

The Company has recognized the following amounts in the Profit and Loss Account for Defined Contribution

(` In Lacs)plans:Particulars F.Y. 2015-16 F.Y. 2014-15Provident Fund 730.92 470.92

The Company’s provident Fund is administered by the Maharashtra & Karnataka State Governments.

B) State Plans

The Company has recognized the following amounts in the profit & loss account for contribution to state

(` In Lacs)plans:Particulars F.Y. 2015-16 F.Y. 2014-15Employee’s State Insurance 144.26 104.24

C) Defined Benefit Plans

Contribution to Gratuity Funds:

During the year under review company has made provision for gratuity plan for all its eligible employees based on actuarial valuation certified by the actuary as on 31-03-2016. Company has already framed Gratuity scheme through trust fund managed by LIC for certain class of employees and for other employees provisions has been made in the books and fund for the same shall be set up in due course of time.

93


The details of the Company’s Gratuity Fund for its employees are given below which is certified by the actuary and relied upon by the auditors. (` In Lacs)

Particulars March 31,2016 March 31,2015 Funded Unfunded Total Funded Unfunded Total

Components of employer expenses1) Current Service Cost 9.28 54.64 63.92 9.28 37.35 46.63 2) Interest Cost - 19.97 19.97 6.72 13.04 19.76 3) Expected Return on Plan Assets (11.60) - (11.60) (9.13) - (9.13)4) Net Actuarial (Gain) /Loss 1.13 (55.55) (54.42) 13.20 (22.78) (9.57)5) Total expense/(Gain) recognized in

the Profit and Loss Account(1.18) 19.05 17.87 20.07 27.61 47.69

Net Assets /Liability recognised in Balance Sheet1) Present Value of Defined benefit

obligation(105.36) (194.55) (299.91) (103.20) (175.50) (278.70)

2) Fair Value of plan assets 123.22 - 123.22 119.88 - 119.88 3) Assets/ (Liability) recognized in

Balance Sheet.17.86 (194.55) (176.70) 16.67 (175.50) (158.83)

Change in Present Value of the Defined Benefit Obligation1) Opening Present Value of obligation 103.20 175.50 278.70 84.01 147.88 231.89 2) Interest Cost - 19.97 19.97 6.72 13.04 19.76 3) Current Service Cost 9.28 54.64 63.92 9.28 37.35 46.63 4) Benefits Paid (7.13) - (7.13) (10.02) - (10.02)5) Actuarial (Gain) /Loss - (55.55) (55.55) 13.20 (22.78) (9.57)6) Closing Present Value of obligation. 105.36 194.55 299.91 103.20 175.50 278.70

Change in the fair value of plan Assets1) Opening Value of plan assets 119.86 - 119.86 93.08 - 93.08 2) Expected return on plan Assets 11.60 - 11.60 9.13 - 9.13 3) Actual Company Contribution - - - 27.66 - 27.66 4) Benefits Paid (1.11) - (1.11) - - -5) Actuarial (Gain) /Loss (7.13) - (7.13) (10.02) - (10.02)6) Closing Fair Value of plan assets 123.22 - 123.22 119.86 - 119.86

Actuarial AssumptionDiscount rate (per annum) 8.00% 7.93% 8.00% 7.80%Expected rate of return on assets (per annum)

8.00% 7.93% 8.00% 9.00%

Salary escalation rate* 4.00% 5.10% 4.00% 5.10%Mortality Rate LIC

(1994-96) Ultimate

Indian Assured

Lives mortality (2006-08)

LIC (1994-96) Ultimate

Indian Assured

Lives mortality (2006-08)

Withdrawal Rate 1 %-3 % depending

on age

1 %-5 % depending

on age

1 %-3 % depending

on age

1 %-5 % depending

on age

* Takes into account the inflation, seniority, promotions and other relevant factors

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36 Segmental reporting for the year ended on 31st March, 2016 is as under.

(A) On the basis of Business Segments – (` In Lacs)

Particulars F.Y. 2015-2016 F.Y. 2014-2015 Textiles Garment Total Textiles Garment Total

External Revenues 1,40,986.63 18,301.79 1,59,288.41 1,32,847.60 17,237.51 1,50,085.11 Internal Segment Revenues - - - - - -Other Allocable Income 2,754.49 2,617.71 5,372.20 2,530.00 1,350.51 3,880.51 Total Revenues 1,43,740.96 20,919.65 1,64,660.61 1,35,377.60 18,588.02 1,53,965.62 Less: Elimination - - - - - -Net Revenue 1,43,741.11 20,919.50 1,64,660.61 1,35,377.60 18,588.02 1,53,965.62 SEGMENT RESULT 16,135.16 4,112.53 20,247.69 15,230.94 3,388.37 18,619.32 Other Non-allocable Income / (Exps)Non reportable Segment Revenue - 327.39 Other Income 702.79 656.17 Interest Cost 11,729.21 9,701.26 Provision for Taxes 3,508.28 3,629.35 NET PROFIT 5,713.00 6,272.26 OTHER INFORMATIONSegment Assets 1,61,351.94 21,893.68 1,83,245.62 1,34,651.97 28,810.51 1,63,462.48 Unallocable Corporate Assets 0.25 0.25 TOTAL ASSETS 1,83,245.87 1,63,462.73 Segment Liabilities 94,294.77 11,750.10 1,06,044.87 66,267.98 29,138.72 95,406.70 Unallocable Liabilities 16,833.22 12,603.89 TOTAL LIABILITIES 1,22,878.09 1,08,010.59 CAPITAL EXPENDITURE - -Segment Capital Expenditure 1,514.37 374.30 1,888.67 772.48 3,409.21 4,181.69 Unallocated Capital Expenses - -TOTAL CAPITAL EXP. 1,888.67 4,181.69 DEPRECIATION & AMORTISATION - -Segment Dep. & Amort. 3,233.22 780.38 4,013.60 3,183.63 580.79 3,764.42 Unallocated Dep. & Amort. - -TOTAL DEPRECIATION & AMORTISATION

4,013.60 3,764.42

(B) On the basis of Geographical Segments - (` In Lacs)Particulars Domestic Exports Total Domestic Exports TotalSegment Revenues 1,38,714.07 25,946.54 1,64,660.61 1,36,515.74 17,777.27 1,54,293.01 Internal Segment Revenues - - - - - -Total Revenues 1,38,714.07 25,946.54 1,64,660.61 1,36,515.74 17,777.27 1,54,293.01 Less : Elimination - - - - - -NET REVENUES 1,38,714.07 25,946.54 1,64,660.61 1,36,515.74 17,777.27 1,54,293.01 Segment Result 14,359.17 5,888.52 20,247.68 15,748.01 2,871.31 18,946.71 Carrying Cost of segment assets 1,46,080.92 37,164.95 1,83,245.87 1,28,113.36 35,349.36 1,63,462.73 Addition to Fixed Assets 929.29 959.38 1,888.67 219.05 3,962.64 4,181.69

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(C) Other Disclosures -

1. Segments have been identified in line with the Accounting Standard on Segment Reporting (AS – 17) taking into account the organization structure as well as the differential risks and returns of these segments.

2. The Company has disclosed Business Segment as the primary segment.

3. The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

Note: - Above details compiled by the Management and relied upon by the Auditors

37 Contingent Liabilities not provided for in respect of:

a) Export invoices backed by letter of credit purchased by the bank amounting to ` 1003.54 Lacs (Previous year ` 577.08Lacs)

b) Sales invoices Discounted with the bank amounting to ` 27.63 Lacs. (Previous Year 65.13 Lacs)

c) Claim against the Company not acknowledged as debts in respect of disputed Income Tax demand amounting to ` NIL (Previous Year ` 75.09 Lacs) (Interest thereon not ascertainable at present.)

d) Claim against the Company not acknowledged as debts in respect of Central Excise dues amounting to ` 290.58 Lacs. (Previous Year ` 290.58 Lacs) (Interest thereon not ascertainable at present.)

e) Bank guarantee given to Sales Tax , MSEB & Custom Department of ` 382.15 Lacs. (Previous Year ` 374.15 Lacs)

38 CAPITAL COMMITMENTS:

The estimated amount of contracts remaining to be executed on capital account to the extent not provided for ` NIL. (Previous year ` NIL)

39 The Hon'ble High Court of Judicature at Bombay had vide its order dated 29th March, 2016 approved the Scheme of Arrangement (the "Scheme") between Mandhana Industries Limited ("MIL /Demerged Company") and Mandhana Retail Ventures Limited ("MRVL/ Resulting Company") and their respective Shareholders and Creditors, pursuant to which the Retail Devision of MIL has been demerged and transfered into MRVL. The Scheme has been made effective from 1st April, 2016 with effect from the Appointed date of 1st April, 2014.consiquence on said demerger the result of the discontinued Retail Division of MIL for the previous period not included in the result above.

40 Significant accouting policies and practices adopted by the Company, are disclosed in the statement annexed to these financial statements as Annexure I.

96


ANNEXURE ISTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

(annexed to and forming part of the financial statements for the year ended 31st March, 2016)

A. BASIS OF ACCOUNTING

These financial statements have been prepared on an accrual basis and under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, including the accounting standards notified under the relevant provisions of the Companies Act, 2013.

B. RECOGNITION OF INCOME AND EXPENDITURE:

(i) Revenues/Income and costs/Expenditure are generally accounted on accrual, as they are earned or incurred.

(ii) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods.

C. USE OF ESTIMATES:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

D. FIXED ASSETS

a. The Gross Block of Fixed asset is recorded at cost, which includes duties and other identifiable direct expenses up to the date of commissioning of the assets and wherever applicable is net of credits available under CENVAT and VAT schemes.

b. Incidental expenditure including interest on loans during construction period is capitalized up to the date of attainment of commercial production.

c. Profit/ Loss on the sale of fixed assets is accounted for in the Profit and Loss Account and credited/debited respectively to profit and loss account.

d. Intangible Assets are stated at cost of acquisition less accumulated amortization.

E. DEPRECIATION

Tangible Assets

a. Depreciation on fixed Assets is charged as follows :

i) Depreciation on Fixed assets is provided base on useful life of assets as prescribed by schedule II to the companies Act 2013 or reassessed based on management evaluation . In case of following assets useful life is different than those prescribed in schedule II to The Companies Act,2013.

The useful life of those assets are as follows

Tangible Assets

Assets Classification Useful life assessed by management

Plant And Machinery 16 -20 YearsOffice & Factory Equipment’s

6-8.5 years

Furniture &fixtures 11 -13.5 YearsLease hold land Over the period of

lease termCapital Expenditure on rented Premises

10-12 Years

Vehicles 8-10 YearsComputer & Accessories 3.5-4.5 Years

Intangible Assets

These are amortized as under

Assets Classification AmortizationComputer Software Over the period of 5 Year

b. On additions to the fixed assets made during the year, depreciation is provided on pro-rata basis, with reference to the date of addition.

c. On deletion or sale of assets, no depreciation is provided.

F. INVESTMENT

Investments are classified into Current and Long-term Investments. Current Investments are stated at

97


lower of cost and fair value. Long-term Investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary in the value of Long-term Investments. However, fixed income long term securities are stated at cost, less amortization of premium/discount and provision for diminution to recognize a decline, other than temporary.

G. INVENTORIES

a. Finished goods are valued at cost or net realizable whichever is lower.

b. Work in progress valued at cost. Cost comprises all cost of materials, cost of conversion and any other cost incurred in the production process.

c. Raw materials for weaving, shirting and fabric division is valued at cost following FIFO Method. The stock of auxiliary material for process division is valued at landed cost on FIFO basis. The stock of Raw materials and auxiliary material for export division is valued at standard cost with appropriate application of variances to the stock of raw materials. The damaged, unserviceable and inert raw materials are valued at net realizable value.

d. Sample fabric purchases, are charged to profit and loss account in the year of purchase.

H. FOREIGN CURRENCY TRANSACTION

a. All transactions in foreign currency are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

b. Monetary items denominated in foreign currency are restated at the exchange rate prevailing at the year-end and the overall net gain / loss is adjusted to the profit & loss account.

c. In respect of Forward Exchange contracts entered into to hedge foreign currency risks, the difference between the forward rate and exchange rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange differences arising on such contracts are recognized as income or expenses along with the exchange differences on the underlying assets/liabilities on the reporting date. Profit

or loss on cancellations/renewals of forward contracts is recognized during the year.

I. EMPLOYEE BENEFITS:

a. Defined Contribution Plan:

Contribution to provident fund is accounted on accrual basis with corresponding contribution to recognized fund.

b. Defined Benefit Plan:

Company’s Liabilities towards defined benefit scheme is determined using the project unit credit method. Actuarial valuation under projected unit credit method is carried out at balance sheet date. Actuarial gains/losses are recognized in Profit & Loss Account in the period of occurrence of such gains & losses. Gratuity scheme for certain class of employees is administered through trust and the trust funds are managed under the employee gratuity scheme of LIC.

c. Company does not have any policy for Leave Encashment or any other pension plans/schemes. All the unused leaves outstanding as on 31st March gets lapsed and does not get accumulated.

J. BORROWING COST:

Interest and other cost in connection with the borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and all other borrowings cost are charged to revenue.

K. OPERATIONAL LEASE:

Operational lease payments are recognized as an expense in Profit & Loss accounts on accrual basis. Lease payments relating to project under development are capitalized to respective projects.

L. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Contingent Liabilities are not recognized, but disclosed in the case of,

a) A present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation.

98


b) A possible obligation, when the probability of outflow of resources is reasonably certain.

Contingent Assets are neither recognized, nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance sheet date.

M. INCOME TAX

a. Current Tax : Provision is made for Income tax under the tax payable method based on the liability as computed after taking credit for allowances and exemptions. Current Tax provided for the year is also net of MAT Credit available under the I.T Act.

b. Deferred Tax : Consequent to the Accounting Standard 22- Accounting for Taxes on Income becoming mandatory effective from 1st April,2002, the differences that result between the profit offered for income tax and the profit as per financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period, based on prevailing enacted regulations.

N. IMPAIRMENT OF ASSETS

As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine,

a) The provision for impairment loss, if any required or,

b) The reversal, if any, required of impairment loss recognized in previous periods.

Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined,

a) In the case of an individual asset, at the higher of the net selling price and the value in use.

b) In the case of a cash-generating unit, (a group of assets that generates identified independent cash flows), at the higher of the cash generating unit’s selling price and the value in use.

(Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its deposal at the end of its useful life)


Registered Office: Plot No. C-3, M.I.D.C., Tarapur Industrial Area, Boisar, Dist. Palghar - 401 506.Tel: +91 2525 605 704/05/06 • Fax: +91 22 43539358 • E-mail: [email protected] • Website: www.mandhana.com

Form No. MGT -11

PROXY FORM

(Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014)

Name of the member (s)

Registered address

E-mail Id

Folio No.

DP ID & Client ID

I/We, being the member (s) holding Shares of the above named company, hereby appoint:

1. Name: Email ID :

Address: Signature :

or failing him/her

2. Name: Email ID :


or failing him /her

3. Name: Email ID :


as my/ our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 32nd Annual General Meeting of the Company, to be held on Friday, the 30th day of December, 2016 at 10.00 a.m. at the premises of the Company at Plot No. C-2, M.I.D.C, Tarapur Industrial Area, Boisar, Dist. Palghar - 401 506 and at any adjournment thereof in respect of such resolutions as are indicated below:

Item No. Resolutions Optional*Ordinary Business For Against1. Ordinary resolution for adoption of Audited Financial Statements for the financial

year ended 31st March, 20162. Ordinary resolution for appointment of a Director in place of Mr. Manish B.

Mandhana, (DIN No. 00025449) who retires by rotation in terms of Section 152(6) of the Companies Act, 2013, and being eligible, offers himself for re-appointment

Special Business3. Ordinary resolution for appointment of M/s. KPND & Co., Chartered Accountants,

Firm Regn. No. 133861W as Statutory Auditors of the Company to fill the casual vacancy caused by the resignation of M/s. Vishal H. Shah & Associates, Chartered Accountants.

4. Ordinary Resolution for ratification of the appointment and remuneration of M/s. Babulal M. Parihar & Co., Cost Accountant, as the Cost Auditor for the FY 2016-17

5. Special Resolution for adoption of new set of Articles of Association in alignment with the provisions contained under the Companies Act, 2013

6. Special Resolution for alteration of Memorandum of Association in alignment with the provisions contained under the Companies Act, 2013

7. Ordinary Resolution to Change the Name of the Company8. Ordinary Resolution for re-appointment of Mr. Purushottam C. Mandhana as

Chairman and Managing Director of the Company9. Ordinary Resolution for re-appointment of Mr. Manish B. Mandhana as Joint

Managing Director of the Company

*It is optional to put a (√) in the appropriate column against the resolutions indicated in the Box. If you leave the ‘For’ of ‘Against’ column blank against any or all resolutions, your proxy will be entitled to vote in the manner as he/she thinks appropriate.

Signed this day of , 2016.

Affix Re.1 Revenue

Stamp

Signature of Member (s) Signature of Proxy holder (s)

Note: 1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours

before the commencement of the Meeting.2. A proxy need not be member of the Company.3. In case the appointer is a body corporate, the proxy form should be signed under its seal or be signed by an officer or an attorney duly authorised by it and

an authenticated copy of such authorization should be attached to the Proxy Form.4. A person can act as proxy on behalf of Members not exceeding fifty (50) and holding in the aggregate not more than 10% of the total share capital

of the Company. In case a proxy is proposed to be appointed by a Member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder.


Registered Office: Plot No. C-3, M.I.D.C., Tarapur Industrial Area, Boisar, Dist. Palghar - 401 506.Tel: +91 2525 605 704/05/06 • Fax: +91 22 43539358 • E-mail: [email protected]

Website: www.mandhana.com

ATTENDANCE SLIP

I/We, hereby record my/our presence at the 32nd ANNUAL GENERAL MEETING of the Company held on Friday, 30th December, 2016 at 10.00 a.m. at the premises of the Company at Plot No. C -2, M.I.D.C., Tarapur Industrial Area, Boisar, Dist. Palghar – 401506.

Registered Folio No./DP ID & Client ID*No. of Shares heldName and address of the Member

Joint Holder 1Joint Holder 2

*DP ID & Client ID is applicable for members holding shares in electronic form.

If Member, please sign hereIf proxy, please mention name and sign here

Name of Proxy Signature

Note:

Shareholder/Proxy holder, as the case may be, is requested to produce the attendance slip duly signed at the entrance of the Meeting venue.

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