Ashapura Intimates Fashion Ltd Directors Report.

Dear Members,

Your Companys Directors are pleased to present the Twelfth Annual Report of the Company together with the audited financial statements for the financial year ended March 31, 2018.

1. FINANCIAL PERFORMANCE

The Companys financial performance for the year ended March 31, 2018 is summarized below:

(in Lakhs)

particulars FY 2017-18 FY 2016-17
Revenue 38427.20 30951.85
Depreciation and Amortization Expenses 306.81 350.10
Profit Before Tax 7770.40 3119.61
Tax Expenses 1550.95 1005.67
Profit For the year 6219.46 2113.95

2. TRANSFER TO RESERVES

The Company has not transferred any amount to Reserve Account during the year under review.

3. SHARE CAPITAL

The paid-up equity share capital of the Company as on March 31, 2018 was 2,52,11,4,060 comprising of 2,52,11,406 equity shares of 10/- each. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock option or sweat equity shares.

During the year under review, the Company has allotted 4,00,226 Equity shares of 10 each to Bennett Coleman and Company Limited pursuant to conversion of warrants. Also, pursuant to the scheme of amalgamation of Momai Apparels Limited ("Transferor Company") with the Company, 53,43,940 equity shares of face value 10/- were allotted to the shareholders of the Transferor Company.

4. DIVIDEND

During the year under review, your Directors declared and paid an interim dividend of 0.50/- per equity share (on the face value of 10 each).

The Board has recommended a final dividend of 0.75/- per equity share (on the face value of 10 each) for the financial year ended March 31, 2018.

The payment of the final divided is subject to declaration by the members at the ensuing Annual General Meeting (AGM) and shall be paid to those members whose names appear in the Register of Members of the Company as on September 21, 2018. The Register of Members and the Share Transfer Books will remain closed from September 22, 2018 to September 28, 2018 (both days inclusive). The AGM of the Company is scheduled to be held on September 28, 2018.

5. I NFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY

Information on the operational and financial performance, among others is given in the Management Discussion and Analysis Report annexed to this Report and is in accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

6. CREDIT RATING

Reflecting the improved financial strength during the year under review, the Credit Analysis and Research Limited "CARE" has upgraded the credit rating assigned to the Company from CARE BBB+ (Triple B plus) to CARE A (Single A); Stable with effect from November 10, 2017, for its cash credit bank facilities.

7. HUMAN RESOURCE

The Company recognizes people as its most precious asset and it has built an open, transparent and meritocratic culture to nurture this asset.

Human Resources ("HR") Policies of the Company are focused on developing the potential of each employee. With this premise, a comprehensive set of HR Policy is in place, aimed at attracting, retaining and motivating employees at all levels.

The Companys Learning & Development ("L&D") initiatives are focused on enhancing the functional and behavioral competencies of its employees through L&D interventions, such as Executive Development Programs, e-learning and various classroom-based training programs.

The ratio of remuneration of each Director to the median employees remuneration and other details in terms of Section 197 of Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014 is annexed as "Annexure A" to this report.

The information in respect of employees of the Company required pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided upon request.

8. SUBSIDIARIES & ASSOCIATES

During the financial year ended March 31, 2018, AIFL Singapore PTE Limited became a subsidiary.

The Companys Policy for determining material subsidiaries may be accessed on the Companys website at the link: https://www.ashapurafashion. com/investor/Policy%20for%20%20Determining%20 Material%20Subsidiary.pdf

9. PUBLIC DEPOSITS

The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

10. LOANS, INVESTMENT AND GUARANTEES

Particulars of loans given, investment made, guarantees given and securities provided are provided in the financial statements.

11. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All Contracts / Arrangements / Transactions entered into / by the Company during the financial year under review with related parties were on an arms length basis and in the ordinary course of business. There were no materiality significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a conflict with the interest of the Company at large.

All Related Party Transactions were placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The Transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website at the link : https://www.ashapurafashion.com/investor/ Policy%20on%20Related%20Party%20Transaction. pdf

Form AOC-2 is annexed as "Annexure-B" to this Report. The details of the transactions with Related parties are provided in the notes to the financial statements.

12. INTERNAL CONTROL SYSTEMS

The Companys internal control system is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance with laws and regulations. The internal control system is supported by an internal audit process for reviewing the design, adequacy and efficacy of the Companys internal controls, including its systems and processes and compliance with regulations and procedures. Internal Audit Reports are discussed with the Management and are reviewed by the Audit Committee of the Board, which also reviews the adequacy and effectiveness of the internal controls in the Company.

The Companys internal control system is commensurate with the size, nature and operations of the Company.

13. INTERNAL FINANCIAL CONTROLS

Internal Financial Control systems have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable Accounting Standards.

The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 of the Companies Act, 2013 read together with the Companies (Indian Accounting Standards) Rules, 2015. These are in accordance with Generally Accepted Accounting Principles in India. Changes in Policy, if any, are approved by the Audit Committee in consultation with the Statutory Auditors.

The Company in preparing its financial statements makes judgments and estimates based on sound policies and uses external agencies to verify/validate them as and when appropriate. The basis of such judgments and estimates are also audited by the Statutory Auditors and reviewed by the Audit Committee.

14. CORPORATE GOVERNANCE

The report on Corporate Governance as stipulated under Regulation 34 (3) read with Para C of Schedule V to the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, inter alia, containing the composition of the Audit Committee, details of establishment of vigil mechanism, forms part of this report. The requisite Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, is attached to this annual report.

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL Re-appointment of Directors

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Dinesh Chanubha Sodha (DIN: 02836240) and Mr. Hitesh Subhash Punjani (DIN: 03268480), Directors of the Company will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for reappointments.

The Board recommends for the above reappointments. Items seeking your approval on the above are included in the notice convening the Annual General Meeting. Brief resume of the Directors being re-appointed forms part of the Notice of the ensuing Annual General Meeting.

Key Managerial Personnel

During the year under review there were no change in the Key Managerial Personnels of the Company.

The following Directors/Executives continued as KMPs during Financial Year 2017-18:

• Mr. Harshad Thakkar, Managing Director

• Mr. Mohit Shah, Chief Executive Officer

• Mr. Anurag Gangwal, Chief Financial Officer

• Ms. Bhoomi Mewada, Company Secretary

16. NUMBER OF MEETINGS OF BOARD OF DIRECTORS

The details of the number of meetings of the Board held during the financial year 2017-18 forms part of the Corporate Governance Report.

17. EVALUATION OF THE PERFORMANCE OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and the Corporate Governance Requirements as prescribe by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors has carried out an annual evaluation of its own performance, and that of its Committees and Individual Directors.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated.

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

The process for evaluation of the performance of Directors/Board/Committees of the Board for the financial year 2017-18 was initiated by the Nomination and Remuneration Committee, by triggering surveys to all Directors.

The Directors carried out the annual performance evaluation of the Board, Committees of Board and individual Directors along with assessing the quality, quantity and timelines of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

The feedback of the Independent Directors on their review of the performance of Non-Independent Directors and the Board as a whole, the performance of the Chairman of the Company and the assessment of the quality, quantity and timeliness of flow of information between the Company Management and the Board was taken into consideration by the Board in carrying out the performance evaluation.

18. INDEPENDENT DIRECTORS

Declaration of Independence given by Independent Directors

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Familiarisation Programme For Independent Directors

Pursuant to requirement of Securities and Exchange Board of India vide Circular no. CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014, the Company has in place a programme for familiarization of the Independent Directors with the Company. The details of the same is uploaded on the Companys website at the link : https://www.ashapurafashion.com/investor/ Familiraisation%20Programme.pdf

19. NOMINATION AND REMUNERATION POLICY

The Company has formulated and adopted the Nomination and Remuneration Policy in pursuant to Section 178 of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said policy is provided as "Annexure C" to this Report.

The said Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Executive, Non-Executive and Independent Directors on the Board of Directors of the Company and Senior Management Personnels of the Company, their remuneration including determination of qualifications, positive attributes, independence of Directors and other matters as provided under sub-section (3) of Section 178 of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

20. CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted Corporate Social Responsibility Committee in compliance with the provision of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Companys website at the link : http://www.ashapurafashion.com/ investor/CSR%20Policy.pdf

The Companys CSR Policy statement and annual report on the CSR activities undertaken during the Financial Year ended March 31, 2018, in accordance with Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 including statutory modification(s) or re- enactment(s) thereof for the time being in force is set out in "Annexure D" to this Report.

21. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report.

22. EXTRACT OF ANNUAL RETURN

An extract of the Annual Return as prescribed under Section 92(3) of the Companies Act, 2013 and the Companies (Management and Administration) Rules, 2014, in the prescribed Form No. MGT- 9, is attached as "Annexure E"to this Report.

23. AUDITORS Statutory Auditors

At the 11th Annual General Meeting of the Company held on December 29, 2017, M/s. Bagaria & Co. LLP, Chartered Accountants (Firm Registration No. 113447W/W-100019), were appointed as the Statutory Auditors of the Company, for a term of five years, to hold office from the conclusion of the Eleventh AGM till the conclusion of the Sixteenth Annual General Meeting of the Company to be held in 2022, subject to the ratification of their appointment by the Members at every Annual General Meeting, if required under the Companies Act, 2013.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Jaiprakash Singh & Associates, Practicing Company Secretaries has been appointed as Secretarial Auditor, to undertake Secretarial Audit of the Company for the Financial Year 2017-18. The report of the Secretarial Auditor is annexed to this report as "Annexure F".

Auditors Observations:

There were no audit qualifications in the Statutory Auditors Report as well as in the Secretarial Audit Report for the financial year 2017-18 as annexed to this Annual Report.

Cost Auditors:

Pursuant to the provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, and considering factors for the applicability for the Cost Audit for the financial year 2017-18, the Cost Audit for the financial year 2017-18 was not applicable to the Company.

24. DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors acknowledge the responsibility for ensuring compliances with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 in the preparation of the annual accounts for the year ended on March 31, 2018 and to the best of their knowledge and ability, confirms that:

• in the preparation of the annual accounts for the financial year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

• the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;

• the Directors had taken proper and sufficient care towards maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting the fraud and other irregularities;

• the Directors had prepared the annual accounts ongoing concern basis;

• the Directors had laid down proper Internal Financial Controls to be laid down by Company and such financial control are adequate and are operating effectively;

• the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

25. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company is committed to uphold and maintain the dignity of women employees and it has in place a policy which provides protection against sexual harassment of women at work place and for prevention and redressal of such complaints.

The Company has constituted an Internal Complaint Committee as required under Section 4 of the Sexual Harassment of Women and at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder.

During the year, no complaints were reported.

26. SAFETY, ENVIRONMENT CONTROL AND PROTECTION

The Company is aware of the importance of environmentally clean and safe operations. The Companys policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances, environmental regulations and preservation of natural resources at the Plant.

27. REPORTING OF FRAUDS

There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013 and the Rules framed thereunder either to the Company or to the Central Government.

28. INFORMATION ON MATERIAL CHANGES AND COMMITMENTS

There are no material changes or commitments affecting the financial position of the Company which have occurred at the end of financial year of the Company to which the Financial Statement relate and on the date of this Report.

29. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy for the Directors and employees to report genuine concerns or grievances. The Policy is available on the website of the Company at the link: httpsy/www.ashapurafashion. com/investor/VIGIL-MECHANISM-POLICY-AIFL.pdf

The Policy provides for adequate safeguards against the victimization of the employees who use vigil mechanism. The Vigil Mechanism is overseen by the Audit Committee.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 is as follows:

A. CONSERVATION OF ENERGY

i. The steps taken or impact on conservation of energy:

The Company has made concrete efforts for enhancement in the capacity utilization, cost competitiveness and quality through systematic process monitoring and adherence to technological norms by:

• Installation of energy efficient LED Lights in all stores

• Installation of Energy Management System in all stores

• Reducing power consumption in cooling towers

• Replacement of inefficient motor

• Technical up-gradation and modernization of various machines

• Replacement of old plant and machinery with modernization of existing machinery

ii. The Steps taken by the Company for utilising alternate sources of energy:

1. All the Store Unit maintenance head and store managers were made aware about energy consumption of their store as per the connected load. Based on the connected load and operating hours, budgeted energy consumption is given to each stores and practice of taking daily logs and crosschecking the daily consumption with the budgeted units is adopted. This helps in curbing the unwanted consumption, motivate users to take all the possible measures to save the energy and helps in pointing out the discrepancies in the energy consumption pattern and corrective action to eliminate the discrepancies.

2. Controlled the energy consumption of HVAC system by optimizing the temperature inside the stores (24C). This drive is the major contributor for the energy conservation for the stores.

3. Optimized lighting consumption by strictly controlling the operating hours as per the usage pattern. Color coding is followed for distinguishing the different lighting and using LED Lights in all the stores (emergency, show window, signages, floor lighting, indirect lighting) switches; so that energy usage can be optimized.

4. Eliminated the unwanted light consumption and restricted usage of the lighting during day work.

iii. The capital investment on energy conservation equipment:

No additional investment was made for the above purpose.

B. TECHNOLOGY ABSORPTION, ADAPTION AND INNOVATION

i. The efforts made towards technology absorption during the year under review are: - The Company continues to use the latest technologies for improving the quality of its services and products.

ii. In case of imported technology - The Companys operations do not require significant import of technology.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign Exchange Earnings and Outgo

( in Lakhs)

Particulars 2017-18 2016-17
Foreign Exchange Earned 586.62 526.19
Foreign Exchange Expenses NIL NIL

31. CAUTIONARY STATEMENT

Statement in the Annual Report, particularly those relating to Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectation, may constitute forward looking statement within the meaning of applicable laws and regulations.

Although the expectations are based on reasonable assumptions, the actual results may differ.

32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATOR OR COURTS OR TRIBUNALS

During the financial year under review, there were no significant or material orders passed by the Regulators or Courts or Tribunal which would impact the going concern status of the Company and its future operation.

33. MANAGING DIRECTOR & CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION

In terms of Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has obtained Compliance Certificate from Managing Director and Chief Financial Officer.

34. OTHER DISCLOSURES

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

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

35. ACKNOWLEDGEMENTS

The Directors would like to place on record their gratitude for the valuable guidance and support received from SEBI, Registrar of Companies and other government and regulatory agencies and to convey their appreciation to shareholders, customers, bankers, lenders, vendors and all other business associates for the continuous support given by them to the Company.

The Directors also wish to place on record their appreciation for impressive growth achieved through the competence, hard work, solidarity, co-operation and support of employees at all levels.

For and on Behalf of the Board
Harshad Thakkar
Chairman and Managing Director
DIN: 01869173
Place: Mumbai
Date: August 13, 2018