E-Land Apparel Ltd Directors Report.

To,

The Members of E-Land Apparel Limited (formerly known as Mudra Lifestyle Limited), Your Directors present the19th Annual Report of the Company together with the Audited Financial Statements for the financial year ended 31st March, 2016.

FINANCIAL RESULTS:

The financial performance of the Company for the year ended 31st March,2016 is summarized below:

(Rs. In Lakhs)

Particulars Year ended Year ended
31st March, 2016 31st March, 2015
Operational & Other Income 23,866.92 17,934.44
Loss before Interest, Depreciation, Prior period items, Exceptional Items & Tax (759.10) (1,187.10)
Interest 359.00 393.32
Depreciation & Amortization 258.65 265.47
Loss before exceptional items and tax (1376.75) (1,845.89)
Prior period items 490.37 909.87
Exceptional Items - (1,430.19)
Loss before tax (1867.12) (1325.57)
Less/(Add): Provision for Taxation including prior period adjustments - 2,576.77
Deferred Tax - -
Loss after tax (1,867.12) (3,902.34)

OPERATIONS OF THE COMPANY / COMPANY PERFORMANCE:

The Company’s total income from operations for F.Y. 2015-16 at Rs. 23,454.56 Lakhs was higher by 34.00% over last year (Rs. 17,503.16 Lakhs in F.Y. 2014-15). The total expenses for F.Y. 2015-16 at Rs. 24,884.67 Lakhs was higher by 28.36% over last year (Rs. 19,387.01 Lakhs in F.Y. 2014-15). Loss after tax for F.Y. 2015-16 stood at Rs.1,867.12 Lakhs as against Rs. 3,902.34 Lakhs for F.Y. 2014-15.

TRANSFER TO RESERVES:

As there are losses for the financial year 2015-16, the Company did not transfer any amount to reserves during the year.

DIVIDEND:

As there are no profits, the Board of Directors of the Company does not recommend any payment of dividend on the shares for the financial year 2015-16.

CORPORATE DEBT RESTRUCTURING (CDR):

In order to overcome debt repayment obligations, the Company had applied for the restructuring of its debts through CDR Mechanism envisaged under the Reserve Bank of India (RBI) guidelines dated 23rd August, 2001 and subsequent amendments thereto which was approved by the CDR Cell vide their letter of approval dated 27th June, 2012 subject to the compliance of the conditions mentioned therein and the implementation of the CDR Scheme within a period of 120 days from the issuance of the Letter of Approval. The Company has already executed Master Restructuring Agreement (MRA) and has opened the Trust and Retention Account (TRA) with SBI on the terms and conditions set out in Trust and Retention Account Agreement. Other follow-on procedures such as Security creation in favour of SBICAP Trustee Ltd., as a security Trustee for beneficial interest of all existing CDR lenders for majority of its properties is completed. The Company has proposed an offer to the CDR lender banks on 25th January, 2016 for One Time Settlement (OTS) of all its existing debts with the banks and repayment of entire outstanding principal and interest due and the waiver of the entire recompense portion. All the Lenders have approved the OTS proposal and same was placed before the CDR EG. CDR EG has approved the same and Company is in the process of complying with the OTS proposal.

SEBI NOTICE:

Your Company had received an order dated 4th June, 2013, issued under Sections 11(1), 11(2)(j), 11(4) and 11(B) of the SEBI Act, 1992 read with section 12A of SCRA Act, 1956 in relation to the compliance with requirement of Minimum Public Shareholding.

Mr.Murarilal Agarwal, Mr.Ravindra Agarwal, Mr.Vishwambharlal Bhoot (Old Promoters) and E-Land Asia Holdings Pte Ltd. formed the promoter group of your Company. As per the provisions of the Securities Contracts (Regulations) Rules, 1957, as amended (SCRR) and Clause 40A of the Listing Agreements entered into with Stock Exchanges where the shares of the Company are listed, your Company was required to maintain a public shareholding of 25% of the aggregate paid-up equity share capital (Minimum Public Shareholding Threshold) (MPS). Accordingly, the public shareholding of the Company falls short of the required MPS by 10.79%.

The Original Promoters thereby on 26th September, 2014, made an offer for sale of approximately 51,80,000 equity shares of face value of Rs.10 each representing 10.79% of the total paid-up share capital of the Company, through the stock exchange mechanism in accordance with circular no. CIR/MRD/DP/18/2012 dated July 18, 2012 issued by the SEBI and as amended by SEBI vide its circular no. CIR/MRD/DP/24/2014 dated August 8, 2014.

Minimum public shareholding was achieved on 26th September, 2014 through offer for sale mechanism. The Company had received an adjudication order from SEBI dated 29th September, 2015 and Company has complied with the same.

RBI COMPOUNDING ORDER

During the year ended March 31, 2014, Company had entered into a tripartite agreement with E-Land Asia Holdings Pte Ltd, its holding Company and Mr. Murarilal Agarwal, Mr. Ravindra Agarwal and Mr. Vishwambharlal Bhoot (Old Promoters) whereby the loan outstanding towards the Old promoters had been directly paid by the holding Company on behalf of the Company. As the loan was used to meet general corporate purpose, the Company had made an application under the applicable provisions of the Foreign Exchange Management Act ("FEMA") and the rules and regulations there under for regularizing the same. Company had received approval from the Reserve Bank of India (RBI), treating the Loan as an External Commercial Borrowing, subject to the applicable provisions for compounding under FEMA and the Regulations thereunder. Subsequently Company made Compounding application with RBI. Company received the Compounding order and is in the process of complying it with the same.

MATERIAL CHANGES AND COMMITMENTS:

There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this Report.

SHARE CAPITAL:

During the year under review, your Company’s Authorized Share Capital is Rs. 6,001 Lakhs comprising of 60,010,000 Equity Shares of Rs. 10/- each. The Company’s paid up capital is Rs. 4,799.05 Lakhs comprising of 4,79,90,469 Equity Shares of Rs. 10/- each fully paid up. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares. As on March 31, 2016, none of the Directors of the Company holds shares of the Company.

SHIFTING OF REGISTERED OFFICE OF THE COMPANY:

The Board pf Directors at its meeting held on Friday, 06th November, 2015 had decided to shift the registered office of the Company to 404, 4th Floor, Western Edge-1, Western Express Highay, Magathane, Borivali (east), Mumbai-400066 within the same city i.e Mumbai with effect from, 10th October, 2015, accordingly, Form INC-22 was filled with Registrar of Companies Mumbai which was duly approved.

LISTING:

The Equity Shares of the Company are listed on BSE Limited (BSE) with scrip code no. 532820 and on National Stock Exchange of India Limited (NSE) with symbol as ELAND.

The listing fee for the year 2015-16 has been paid to both the Stock Exchanges.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

The Company has gone in for a major re-organization of its top leadership with the twin objective of accelerating growth and furthering its strategic goals. This strategic re-alignment will enable the company to focus on growth opportunities while furthering its leadership.

Mr. Kwang Hyuck Choi, Whole Time Director, has been appointed as the Managing Director of the Company with effect from 27th June, 2016 and his appointment and remuneration will be subject to the approval of the shareholders of the company and the Central Government, if required under Section 196, 197, 203 read with Schedule V of the Companies Act, 2013.

The remuneration to be paid to Mr. Kwang Hyuck Choi, Managing Director, had already been approved by the Nomination and Remuneration Committee at its meeting held on 27th June, 2016.

Your Directors take this opportunity to express their deep sense of appreciation for the valuable services rendered by Mr.Yangweon Yoo during his tenure as Director.

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014 and Articles of Association of the Company, Mr. Jung Ho Hong is liable to retire by rotation at the ensuing Annual General Meeting of the Company. Mr. Jung Ho Hong, being eligible, offers himself for re-appointment.

Brief resume of the Directors proposed to be appointed/re-appointed as stipulated under Listing Agreement with the Stock Exchanges where the shares of the Company are listed are given in the Notice convening 19th Annual General Meeting.

The Company had filed requisite Form MR-2 for approval of reappointment and payment of remuneration for Mr. Yangweon Yoo on 7th April, 2015, Mr. Kwang Hyuck Choi and Mr. Jung Ho Hong on 6th April, 2015. The Company has received Central Government approval for reappointment and payment of remuneration to Mr. Yangweon Yoo vide order No. SRN C49141070/ 4/2015 – CL. VII dated 2nd February, 2016 and for Mr. Kwang Hyuck Choi vide order No. SRN C49067424/2015 – CL-VII dated 28th January, 2016. The Central Government approval is pending for reappointment and payment of remuneration to Mr. Jung Ho Hong and the follow up for the same is in process.

DECLARATION BY INDEPENDENT DIRECTORS:

The independent directors have submitted the Declaration of Independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section (6).

FORMAL ANNUAL EVALUATION OF THE PERFORMANCE OF BOARD, ITS COMMITTEES AND DIRECTORS:

Information on the manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual directors is given in the Corporate Governance Report.

EXTRACT OF ANNUAL RETURN:

The extract of annual return as provided under sub-section (3) of Section 92 of the Companies Act, 2013, in the prescribed Form MGT – 9 is attached as "Annexure A" to this Report.

NUMBER OF MEETINGS OF THE BOARD:

There were 5 meetings of the Board held during the year. Detailed information is given in the Corporate Governance Report.

CORPORATE GOVERNANCE REPORT:

Pursuant to Clause 49 of the Listing Agreement and SEBI Listing Regulations, 2015, the following have been made a part of the Annual Report and are attached to this report: l Management Discussion and Analysis Report l Corporate Governance Report l Auditors’ certificate regarding compliance of conditions of Corporate Governance

FIXED DEPOSITS:

The Company has not accepted / renewed any deposits within the meaning of Section 73 and Section 74 of the Companies Act, 2013 and the Rules made thereunder.

DIRECTOR’S RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors state that:-

(1) In the preparation of the annual accounts, for the year ended 31st March, 2016, the applicable Accounting Standards have been followed and that there are no material departures;

(2) Appropriate accounting policies have been selected and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the loss of the Company for the year ended 31st March, 2016;

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

(4) They have prepared the annual accounts on a "Going Concern" basis.

(5) Proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively.

(6) Proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

NOMINATION AND REMUNERATION POLICY:

The Board on the recommendation of the Nomination and Remuneration Committee has framed a Remuneration Policy, providing

(a) criteria for determining qualifications, positive attributes and independence of directors and

(b) a policy on remuneration for directors, key managerial personnel and other employees.

The detailed Nomination and Remuneration Policy is placed on Company’s website at http://www.elandapparel.com/ Nomination%20&%20Remuneration%20Policy.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Information regarding loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are detailed in the Financial Statements.

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business.

All Related Party Transactions upto 31st March, 2016 were placed before the Audit Committee and the Board for approval. Prior omnibus approval of the Audit Committee was obtained for Related Party Transactions for a period up to 31st March, 2016 and for the financial year 2015-16. The transactions entered into pursuant to the omnibus approval so granted were audited and a statement giving details of all related party transactions was placed before the Audit Committee for its review on a quarterly basis. The Company has obtained the approval of the shareholders by way of special resolution for the material related party transactions. The Board of Directors and the Audit Committee have also approved the said related party transactions.

There are ‘material’ related party transactions as defined under clause 49 of the Listing Agreement and SEBI Listing Regulations, 2015, the details of the same are disclosed in Form AOC-2 in that regard which is attached as "Annexure B "to this report.

The Policy on RPTs as approved by Board is uploaded on the Company’s website at http://www.elandapparel.com

The Company undertakes the transactions of purchase and sale of goods and availing/rendering services with E-Land Group of Companies as mentioned in point 32 in Notes to Accounts.

None of the Directors/Key Managerial Personnel has any pecuniary relationships or transactions vis-a-vis the Company which may have potential conflict with the interest of the Company at large.

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

Information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is attached as "Annexure C" to this report.

RISK MANAGEMENT POLICY:

Information on the development and implementation of a Risk Management Policy for the Company including identification therein of elements of risk which in the opinion of the Board may threaten the existence of the Company is given in the Corporate Governance Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Clause 49(II) (F) of the Listing Agreement, the Company has established a Whistle Blower Policy and Vigil Mechanism. The policy is available on the Company’s website at http://www.elandapparel.com/whistle-blower-policy.pdf

CORPORATE SOCIAL RESPONSIBILITY:

As the Company does not fall under any of the threshold limits given under the provisions of Section 135 of the Companies Act, 2013, the compliances under CSR are not applicable to the Company.

REFERENCE TO THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION ("BIFR") UNDER THE PROVISIONS OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985:

The total losses of the Company as on 31st March, 2016 have exceeded its entire Net Worth. Accordingly, your Company is proposing to make a reference to the BIFR under the provisions of Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 for determination of the measures that should be adopted by your Company to revive the Company. Your Company is in the process of collating all the requisite data needed for making the reference to the BIFR.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The Company has an employee drawing remuneration above the limits mentioned in Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, the details of the same is attached in "Annexure E" to this report.

INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder.

During the financial year 2015-16, the company has not received any complaints on sexual harassment and hence no complaints remain pending as of 31st March, 2016.

SUBSIDIARY

The Company has no Subsidiary.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS & COURTS.

There were no penalties orders passed during the year.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company has an internal control system, commensurate with the size, scale and complexity of its operations. This ensures that all transactions are authorized, recorded and reported correctly, and assets are safeguarded and protected against loss from unauthorized use or disposition. Your Company has adequate internal controls for its business processes across departments to ensure efficient operations, compliance with internal policies, applicable laws and regulations, protection of resources and assets and appropriate reporting of financial transactions.

The Company has Internal Audit function which is empowered to examine the adequacy and compliance with policies, plans and statutory requirements. It comprises of experienced professionals who conduct regular audits across the Company’s operations. The Company has also appointed a firm of Chartered Accountants as Internal Auditors, who reviews the various functions of the Company thoroughly and report to the Audit Committee. During the year under review, the Risk Management Committee of the Company had reviewed the new requirement of Internal Control over Financial Reporting ("ICOFR") and finalized the detailed analysis of key processes, and these were presented for review by the Statutory Auditors. The control mechanism and the process of testing of controls were discussed with the Statutory Auditors. The Statutory Auditors have submitted their report on the Internal Financial Controls which forms an integral part of this Report.

The adequacy of the same has been reported by the Statutory Auditors of your Company in their report as required under the Companies (Auditor’s Report) Order, 2003.

HUMAN RESOURCES:

Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The constant commitment of the employees is the driving force behind the Company’s vision. Your Company appreciates the spirit of its dedicated employees.

AUDITORS:

The Company has received a consent letter from M/s. Deloitte Haskins & Sells LLP, Chartered Accountants Mumbai having Firm Registration No.117366W/W-100018, regarding their willingness to act as Statutory Auditors of the Company. The Company has also received a certificate from them to the effect that their appointment, if made, would be in compliance with the conditions as prescribed under Section 139 of the Companies Act, 2013 and they satisfy the criteria as provided under Section 141 of the Act. They have also confirmed their compliance pursuant to Regulation 33(1) (d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of "Peer Review Certificate" issued by the Peer Review Board of ICAI. The Audit Committee and Board of Directors in their meeting held on 12th August, 2016 has recommended the appointment of M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai, as Statutory Auditors of the Company, subject to approval of shareholders in ensuing Annual General Meeting.

The Statutory Auditors, M/s. S R B C & CO LLP, Chartered Accountants, Mumbai, have expressed their unwillingness to continue as Statutory Auditors of the Company from conclusion of the ensuing Annual General Meeting. Accordingly they have tendered their resignation to the Board of directors in their meeting held on 12/08/2016. Board has accepted the same.

Your Directors recommend the appointment of M/s. Deloitte Haskins & SellsLLP , Chartered Accountants, Mumbai as Statutory Auditors of the Company to hold office from the conclusion of the ensuing 19th Annual General Meeting upto the conclusion of 24th Annual General Meeting of the Company subject to ratification of the appointment by members at every Annual General Meetings.

AUDITORS’ REPORT

There are no qualifications, reservations or adverse remarks made by M/s. S R B C & CO LLP, Statutory Auditors of the Company, in their report for the financial year ended 31st March, 2016. The Statutory Auditors have not reported any incident of fraud to the Audit Committee or to the Board of the Company in the year under review.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. B. K. Pradhan &Associates, a firm of Company Secretaries in Practice having C.P.No.:10179 to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is attached herewith as "Annexure D".

No adverse comments have been made in the said report by the Practising Company Secretary.

RECONCILIATION OF SHARE CAPITAL AUDIT:

In compliance of circular no.D&CC/FITTC/CIR-16/2002 dated 31st December, 2002 further amended by Circular No.CIR/ MRD/DP/30/2010 dated 6th September, 2010 issued by the Securities and Exchange Board of India ("SEBI"), Reconciliation of Share Capital Audit has being carried out at the specified intervals by a Practicing Company Secretary and have been submitted to the Stock Exchanges where the Company is listed within due dates.

APPRECIATION / ACKNOWLEDGEMENT:

Board of Directors wish to express their gratitude and record sincere appreciation for the dedicated efforts of all the employees of the Company. Directors are thankful to the esteemed shareholder for their continued support and confidence reposed in the Company. The Board takes this opportunity to express its gratitude for the valuable assistance and co-operation extended by Government Authorities, Banks, Corporate Debt Restructuring (CDR) Cell, Financial Institutions, Vendors, Customers, Advisors and other business partners.

For and on behalf of the Board
Date: 12th August, 2016 Kwang Hyuck Choi Jung Ho Hong
Place: Mumbai Managing Director Whole-time Director
DIN:02229626 DIN:02229634