Nandan Denim Ltd Directors Report.

To,

The Members,

The Directors have pleasure in submitting their 25th Report together with the Audited Accounts of your Company for the year ended March 31, 2019.

Financial Performance

The Companys financial performance for the year ended March 31, 2019 is summarised below:

(र In Cr.)

Particulars Year ended 31/03/2019 Year ended 31/03/2018
Revenue from Operations 1456.05 1,588.92
Earnings Before Interest, Taxes, Depreciation and Amortisation 163.23 225.84
Less: Finance Cost 27.00 57.98
Less: Depreciation and Amortisation Cost 104.41 120.56
Profit Before Tax 31.82 61.20
Less: Tax Expense 9.74 14.47
Profit After Tax 22.08 46.73
Other Comprehensive Income (0.30) (0.30)
Total Comprehensive Income 21.77 46.43

Companys Performance Review

The business environment for the textile industry remained sluggish during the financial year 2018-19, contributed by lower consumption, liquidity issue and lower lending by the financial institutions. Despite being tough situation, the Company has achieved aggregate sales of RS.1456.05 cr. marginally lower than that of previous financial year and Profit Before Tax of H31.82 cr.

Cost of Goods sold as a percentage to revenue from operations increased to 70% as against 68% in the previous year.

Employee cost as a percentage to revenue from operations increased from 5.05% (र80.30 cr.) to 5.67% (र82.63 cr.) in the previous year.

Other expense as a percentage to revenue from operations increased to 13.56% (र197.46 cr.) against 12.48% (र198.29 cr.) in the previous year.

The Profit Before Tax (PBT) for the current year is H31.82 cr. against H60.82 cr. in the previous year. The Profit After Tax (PAT) declined to RS.22.08 cr. against र46.73 cr. in previous year.

The finance cost (interest) for the current year is RS.27.00 cr. as compared to H58.04 cr. in the previous year which is significantly reduced during the year, mainly due to recognition of interest subsidy.

Dividend

The Board of Directors of your Company has recommended a dividend of 5% (Re. 0.50 per equity share of RS.10/- each) on 4,80,49,056 equity shares of RS.10/- each for the year 2018-19. The final dividend is subject to the approval of the Shareholders at the ensuing 25th Annual General Meeting scheduled to be held on September 13, 2019. This dividend along with dividend tax will result in cash outlay of RS.28.96 Million as compared to H46.30 Million in the previous year. The Board has not recommended any transfer to general reserves from the profits during the year under review.

The dividend declared and/or paid by the Company for the financial year 2018-19, shall be in compliance with the Dividend Distribution Policy. The Dividend Distribution Policy is available on the website of Company at www. nandandenim.com.

Transfer To Reserves

During the year under review, the Company has not transferred any amount to General Reserves out of the amount available for appropriation.

Subsidiary, Joint Venture And Associate Companies

Nandan Denim Limited did not have any Subsidiary, Joint Venture or Associate Company for the year ended March 31, 2019.

Financial Statements

In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ‘SEBI Listing Regulations) and Section 136 of the Companies Act, 2013 read with Rule 10 of the Companies (Accounts) Rules, 2014, the Annual Report containing the financial statements for the financial year 2018-19, along with Directors Report, Management Discussion & Analysis and Corporate Governance Report is being sent to all Shareholders who have registered their email address(es) for the purpose of receiving documents/communication from the Company in electronic mode. Physical copy of the Annual Report is being sent to all those who have not registered their email ids. Please note that the Company will make available full Annual Report either a hard or soft copy depending upon request by any member of your Company.

Credit Rating

* The long-term and short-term ratings remain unchanged at the earlier rating of [ICRA] A/[ICRA] A1, however, the outlook on the long-term rating was revised to Negative from Stable in August, 2018.

The long-term and short-term ratings were revised to [ICRA] A- (Negative)/[ICRA] A2+ from ICRA]A(Negative)/ [ICRA]A1 in June, 2019.

Conservation Of Energy, Technology Absorption And Foreign Exchange Earnings & Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under section 134 of the Act read with the Companies (Accounts) Rules, 2014, is set out in Annexure A to this report.

Directors And Key Managerial Personnel

Directors retiring by rotation

Mr. Vedprakash Chiripal (DIN: 00290454), Non-Executive Director of the Company, aged 67 years, retires by rotation as a Director at the conclusion of this Annual General Meeting pursuant to the provisions of section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company and being eligible has offered himself for re-appointment. Appropriate resolution for his re-appointment is being placed for your approval at the ensuing AGM.

In accordance with the provisions of the Act read with the Rules issued thereunder, the SEBI Listing Regulations and the Articles of Association of the Company, Additional Directors and Independent Directors are not liable to retire by rotation.

Re-appointment of Independent Director

Mr. Tara Sankar Bhattacharya (DIN: 00157305), Independent Director, not liable to retire by rotation, (whose tenure will expire on September 14, 2019) is being re-appointed for a second term pursuant to applicable provisions of the Act read with the Rules issued thereunder and SEBI Listing Regulations. It is proposed to re-appoint Mr. Tara Sankar Bhattacharya upto September 14, 2022.

The aforementioned appointment is based on outcome of performance evaluation exercise, experience and contributions made by Mr. Tara Sankar Bhattacharya in his previous tenure. The respective tenure is decided considering the year in which he attains the age of 75 years.

Change in Directorate

i. Appointment and resignation of Mr. Brijmohan Chiripal (DIN: 00290426) on the Board of Directors of the Company

The Board of Directors at their meeting held on November 3, 2018, based on recommendations of the Nomination & Remuneration Committee, approved the appointment of Mr. Brijmohan Chiripal as a Non Executive Promoter Director. He is a Chemical Engineer with almost 20 years of business experience in Textile Processing as well as export and domestic trading. His ability to empower people, motivate them and align their tasks with the companys goals has helped in the formation of a formidable team.

Due to his prior commitments and other professional assignments, he later on resigned on February 8, 2019.

ii. Resignation of Mr. Ambalal Patel (DIN: 00037870)

Mr. Ambalal Patel was appointed as Non Executive Independent Director on February 21, 2007. His valuable contribution has been of immense benefit to the Company. His inputs have been detrimental to the success of the Company during his tenure. In order to comply with applicable regulations, he tendered his resignation from close of business hours of March 31, 2019.

iii. Appointment and resignation of Mr. Jaiprakash Chiripal (DIN: 00155430) on the Board of Directors of the Company

The Board of Directors at their meeting held on February 8, 2019, based on recommendations of the Nomination & Remuneration Committee approved the appointment of Mr. Jaiprakash Chiripal as a Non Executive Promoter Director. Mr. Jaiprakash D. Chiripal, has over 30 years of experience in textile and packaging industry. He is instrumental in setting up of BOPP Project of Chiripal Group. He is actively involved in Production, Marketing, Human Resource Development of various Companies of the Group. He plays a key role in expansion and implementation of projects. He has over three decades of experience in driving the diversified growth of Groups business. His strength is technology, people management and execution. As the Managing Director of Chiripal Poly Films, he has positioned the Company as third largest player in the flexible packaging market contributing to significant turnover and bottom line of Groups business in a short span of time. He is a core strategist and his guidance and knowledge will play a significant role in overall growth of Nandan Denim Limited.

Later on, he resigned from the position of Director from close of business hours on June 29, 2019 in order to maintain optimal composition of the Board and compliance with applicable regulations.

Declaration of Independence

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Regulation 16 of the SEBI Listing Regulations [including any statutory modification(s) or re-enactment(s) for the time being in force] so as to qualify themselves to be appointed as Independent Directors

Nomination and Remuneration Policy

The Company has formulated and adopted the Nomination and Remuneration Policy in accordance with the provisions of Companies Act, 2013 read with Rules issued thereunder and the SEBI Listing Regulations.

The salient features of the Policy are set out in the Corporate Governance Report which forms part of this Annual Report. The Policy is also available on the website of the Company at www.nandandenim.com/policies/.

Board Evaluation

The Companys Board has formulated the criteria for performance evaluation of the Directors as a whole which broadly covers the Board role, Board/Committee membership, practice, procedure and collaboration.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 of the SEBI Listing Regulations, Independent Directors at their meeting, without the participation of the Non-independent Directors and Management, considered/ evaluated the Boards performance, performance of the Chairman and other Non-Independent Directors

In line with the SEBI Guidance note on Board Evaluation, a Board effectiveness assessment questionnaire was designed for the performance evaluation of the Board, its Committees, Chairman and individual Directors and in accordance with the criteria set and covering various aspects of performance including structure of the Board, meetings of the Board, functions of the Board, role and responsibilities of the Board, governance and compliance, evaluation of risks, grievance redressal for investors, conflict of interest, stakeholder value and responsibility, relationship among Directors, Director competency, Board procedures, processes, functioning and effectiveness. The said questionnaire was circulated to all the Directors for the annual performance evaluation.

The Board subsequently evaluated its own performance, the working of its Committees (Audit, Nomination & Remuneration, CSR Committee and Stakeholders Relationship Committee) and Independent Directors (without participation of the relevant Directors). There were a few suggestions for improving the performance of the Board viz. apprising the Board of the latest developments from time to time from governance prospective.

Key Managerial Personnel

As per the provisions of sections 2(51) and 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 pertaining to Key Managerial Personnel, the following officials were the ‘Key Managerial Personnel for the year 2018-19:

* Mr. Jyotiprasad Chiripal - Managing Director

Mr. Deepak Chiripal - Chief Executive Officer

Mr. Prakashkumar Sharma - Whole Time Director

* Mr. Ashok Bothra - Chief Financial Officer

Jfr Ms. Purvee Roy - Company Secretary

Disclosure relating to remuneration of Directors, Key Managerial Personnel and Particulars of Employees

The remuneration paid to the Directors is in accordance with the Nomination & Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI Listing Regulations [including any statutory modification(s) or re-enactment(s) thereof for the time being in force). The salient features of the Nomination & Remuneration Committee has been outlined in Corporate Governance Section which forms part of this Report.

Remuneration of Directors, Key Managerial Personnel and particulars of employees

The remuneration paid to the Directors is in accordance with the Nomination & Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 of the SEBI Listing Regulations [including any statutory modification(s) or re-enactment(s) thereof for the time being in force.

The information required under section 197 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 [including any statutory modification(s) or re-enactment(s) thereof for the time being in force] in respect of Directors/employees of the Company is set out in Annexure F to this report.

Performance Evaluation

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

The parameters for the performance evaluation of the Board, inter alia, include performance of the Board on deciding long term strategy, rating the composition and mix of Board members, discharging of governance and fiduciary duties, handling critical and dissenting suggestions, etc.

The parameters for the performance evaluation of the Directors include attendance, effective participation in meetings of the Board, domain knowledge, vision, strategy, etc.

The Chairperson(s) of the respective Committees based on feedback received from the Committee members on the outcome of performance evaluation exercise of the Committee, shares a report to the Board.

The details of the evaluation process are set out in the Corporate Governance Report which forms a part of this Annual Report.

Environment And Pollution Control

Nandan Denim Limited strives to maintain good standards of environmental care and ensures that increasing level of operations do not adversely impact standards of health and environment. To combat pollution and strengthen the area ecology, considerable emphasis is placed on trees. A green belt has been developed around the plant site wherever space is available around the periphery of the plant. Other open spaces within the factory have been converted into green areas in the form of lawns or flowering plants. All manufacturing facilities possess the required environmental clearance from the respective Pollution Control Boards and do comply with the relevant statutory provisions.

The Company is well aware of its responsibility towards a better and cleaner environment. Our efforts in environment management go well beyond mere compliance with statutory requirements.

Human Resources/Industrial Relations

Human Resources

Framing the human resource/employee relationship helps maintain perspective on the Companys ultimate goal: to help employees do their best at their jobs. It is a function within an organisation concentrated on recruiting, managing and directing people who work in it. Human Resource Management deals with issues related to compensation, performance management, organisation development, safety, wellness, benefits, employee motivation, training and otheर

Your Company attaches significant importance to continuous up gradation of Human Resources for achieving the highest levels of efficiency, customer satisfaction and growth. As part of the overall HR Strategy, training programmes have been organized for employees at various levels through both internal and external faculties during the year under review, thereby strengthening employee engagement and learning. This has helped to ensure that learning is not time bound and location bound, at the same time employees have access to the information.

A team of approximate 4500 passionate & motivated individuals drive Nandan Denim Limited. Your Company has taken various initiatives to engage the employees using digital and technology platforms.

Industrial Relations

The industrial relations during the year under review continued to be cordial. The Directors place on record their sincere appreciation for the services rendered by employees at all levels.

Particulars of Employees

The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure-F to this report.

Disclosure Requirements

* Details of the familiarization programme of the Independent Directors are available on the website of the Company;

The Code of practices and procedures for fair disclosure of unpublished price sensitive information and code of conduct for prevention of insider trading have also been uploaded on the Companys website;

* The Company does not have any scheme or provision of money for the purchase of its own shares by employees/Directors or by trustees for the benefit of employees/Directors;

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

Board Meetings

The Board meets at regular intervals to discuss and decide on the Companys policies and strategies apart from other Board matteर The tentative dates of Board and Committee Meetings is decided and informed well in advance to facilitate the Directors to arrange their schedule and to ensure participation in the meetings.

During the financial year 2018-19, four board meetings were held on May 26, 2018; August 13, 2018; November 3, 2018 and February 8, 2019 respectively. The gap between two Board Meetings did not exceed 120 days and a meeting was held in every quarter.

The details of the meetings of the Board of Directors and its Committees, convened during the financial year 2018-19 are given in the Corporate Governance Report which forms part of this Report. Further, the Board of Directors also confirm compliance and adherence of the Secretarial Standard - 1 as issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs, with regards to Board Meeting.

Board Committees

Your Company has five Committees of the Board, namely:

• - Audit Committee

Stakeholders Relationship Committee Nomination & Remuneration Committee

• Corporate Social Responsibility Committee Management Committee

Details of all the Committees along with their composition, terms of reference and meetings held during the year are provided in detail in the Corporate Governance Report which forms part of the Annual Report.

Directors Responsibility Statement

Pursuant to Section 134 of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the Directors of the Company confirm that:

a. in the preparation of the annual accounts for the financial year ended March 31, 2019, the applicable Accounting Standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

b. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the Profit & Loss of the Company for the financial year ended March 31, 2019;

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

d. the annual accounts have been prepared on a ‘going concern basis;

e. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively; and

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

Management Discussion and Analysis

Management Discussion and Analysis as stipulated under the SEBI Listing Regulations is presented in a separate section forming part of this Annual Report. It speaks about the overall industry structure, global and domestic economic scenarios, developments in business operations/performance of the Companys business and other material developments during the financial year 2018-19.

Particulars of Loans, Guarantees or Investments

Details of loans, guarantees given and investments under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of the Board and its Powers) Rules, 2014, as on March 31, 2019, are set out in Note 37(B) to the Financial Statements of the Company.

Corporate Governance

Corporate Governance is the application of best management practices, compliance of law in true letter and spirit and adherence to ethical standards for Effective Management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholdeर Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among various levels in the organisation, such as, the board, managers, Shareholders and spells out the rules and procedures for making decisions on corporate affaiर By doing this, it also provides the structure through which the Company objectives are set, and the means of attaining those objectives and monitoring performance. The concept of corporate governance hinges on total transparency, integrity and accountability of the management and the Board of Directors

The Company is committed to maintaining good standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by Securities and Exchange Board of India (SEBI). Pursuant to Regulation 34 of the SEBI Listing Regulations, a separate section titled ‘Report on Corporate Governance has been included in this Report which also contains certain disclosures required under the Companies Act, 2013. The Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is also published in this Annual Report.

Share Capital

The paid up Equity Share Capital of the Company as on March 31, 2019 was H48.05 crores divided into 4,80,49,056 Equity Shares of RS.10 each fully paid. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2019, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

The Companys equity shares are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The shares are actively traded on BSE and NSE and have never been suspended from trading.

Audit Committee

The Company has in place an Audit Committee in terms of requirements of the Act read with rules framed thereunder and SEBI Listing Regulations. The details relating to the Audit Committee are given in the Corporate Governance Report forming part of this Report. The recommendations of Audit Committee were duly accepted by the Board of Directors

Auditors

Statutory Auditor

In terms of Section 139 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 [including any statutory modification(s) of re-enactment(s) thereof for the time being in force], M/s Samir M. Shah & Associates, Chartered Accountants, Ahmedabad [Firm Registration No. 122377W] were appointed as Statutory Auditors of the Company for a term of five consecutive years, from the conclusion of the 23rd Annual General Meeting until the conclusion of 28th Annual General Meeting of the Company to be held in the calendar year 2022, subject to annual ratification by members at every Annual General Meeting, on such remuneration as maybe decided by the Audit Committee of the Board. However, pursuant to Section 40 of the Companies (Amendment) Act, 2017 (i.e. Section 139 of the Companies Act, 2013) which was notified w.e.f. May 7, 2018, ratification of appointment of Statutory Auditors by the members at every AGM is no longer required. Accordingly, ratification resolution is not being taken up at the ensuing Annual General Meeting of the Company.

The Statutory Auditors have confirmed their eligibility and qualifications required under Sections 139, 141 and other applicable provisions of the Companies Act, 2013 and Rules issued thereunder (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

The Auditors Report for the financial year ended March 31, 2019 does not contain any qualification, reservation or adverse remark. As regards the comments made in the Auditors Report, the Board is of the opinion that they are self-explanatory and does not require further clarification.

Cost Auditor

In terms of Section 148 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 (as amended), it is stated that the cost accounts and records are made and maintained by the Company as specified by Central Government.

The Board of Directors of the Company, on the recommendations made by the Audit Committee at its meeting held on August 12, 2019 have approved the appointment of M/s. A.G. Tulsian & Co., Cost Accountants, Ahmedabad [Firm Registration No. 100629] as the Cost Auditor of your Company for the financial year 2019-20 to conduct the audit of the cost records of your Company. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee. The requisite resolution for ratification of remuneration of Cost Auditors by members of the Company has been set out in the Notice of ensuing Annual General Meeting. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment within the meaning of the said Act.

Your Company has received consent from M/s. A.G. Tulsian & Co., Cost Accountants, to act as Cost Auditor for conducting audit of cost records of textiles and other products for the financial year 2019-20 along with a certificate confirming their independence and arms length relationship.

Secretarial Auditor

M/s Sandip Sheth & Associates, Company Secretaries, Ahmedabad (Firm Registration Number: P200IGJ041000) were appointed as Secretarial Auditors of the Company for the financial year 2018-19 pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as Annexure- E to this Report.

Explanation to the observations of Secretarial Audit Report:

As prescribed under section 204(1) of the Act, the Company has received the Secretarial Audit Report. The observations made therein and the corresponding explanations are given below:

1. The Company has filed few e Forms with required late fees as per the provisions of the Companies Act, 2013.

The Company has filed the e Forms as required under the Companies Act, 2013 and paid the necessary statutory fees.

2. The Company has filed required return under Investor Education and Protection Fund Rules; however not within prescribed time.

The Company has already filed the same and it has been taken on record by authorities.

M/s Sandip Sheth & Associates, Company Secretaries, Ahmedabad have been appointed to conduct the Secretarial Audit of the Company for the financial year 2019-20. They have confirmed that they are eligible for the said appointment.

SEBI vide its Circular No. CIR/CFD/CMD1/27/2019 dated February 8, 2019 read with Regulation 24(A) of the SEBI Listing Regulations, directed listed entities to conduct Annual Secretarial Compliance Audit from Practicing Company Secretary of all applicable SEBI Regulations and circulars/guidelines issued thereunder. The said Secretarial Compliance Report is in addition to the Secretarial Audit Report by Practicing Company Secretaries under Form MR-3 and is required to be submitted to Stock Exchanges within 60 days of the end of financial year. The Company had engaged the services of M/s Sandip Sheth & Associates, Secretarial Auditor of the Company for providing this certification. The Company is publishing the said Secretarial Compliance Report, on voluntary basis and the same has been annexed as Annexure D to the Boards Report forming part of this Annual Report.

Auditors certificate on corporate governance

As required by SEBI Listing Regulations, the Auditors Certificate on Corporate Governance is enclosed as part of Annual Report. The Auditors Certificate for fiscal 2019 does not contain any qualification, reservation or adverse remark.

Details in respect of frauds reported by Auditors other than those which are reportable to the Central Government

The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.

Disclosure Under Schedule V (F) of The SEBI (LODR) Regulations, 2015

The Company does not have any Unclaimed Shares issued in physical form pursuant to Public Issue/Rights Issue.

Related Party Transactions

During the financial year 2018-19, your Company has entered into transactions with related parties as defined under section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, all of which are in the ordinary course of business and on arms length basis and in accordance with the provisions of the Companies Act, 2013, read with the Rules issued thereunder and the SEBI Listing Regulations. Hence approval for such related party transactions to be entered in the financial year 2019-20 and 2020-21 is proposed for approval of members at the ensuing annual general meeting and resolution in that respect has been incorporated in the Notice calling Annual General Meeting.

All transactions with related parties were reviewed and approved by the Audit Committee. Prior omnibus approval was granted by the Audit Committee for related party transactions which are of repetitive nature, entered in the ordinary course of business and are on arms length basis in accordance with the provisions of Companies Act, 2013 read with the Rules issued thereunder and SEBI Listing Regulations.

The details of the related party transactions as per Accounting Standard 18 are set out in Note 35 to the Financial Statements forming part of this Report.

Form AOC - 2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as Annexure G.

The Companys Policy on dealing with Related Party Transactions is available on the Companys website at https://nandandenim.com/wp-content/uploads/2018/03/ RelatedPartyTransactionPolicy.pdf.

Policies of the Company

The Company is committed to good corporate governance and has consistently maintained its organizational culture as a remarkable confluence of high standards of professionalism and building Shareholder equity with principles of fairness, integrity and ethics. The Board of Directors of the Company have from time to time framed and approved various Policies as required by the Companies Act, 2013 read with the Rules issued thereunder and the SEBI Listing Regulations. These Policies and Codes are reviewed by the Board and are updated, as and when required.

Some of the key policies adopted by the Company are as follows:

Sr. No. Name of Policy
1 Dividend Distribution Policy
2 Policy on Determination of materiality of events/ information
3 Code of Conduct for Board Members and SeniorManagement Personnel
4 Policy on Archival of Information
5 Code of Conduct for Employees
6 Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information
7 Code of Conduct to Regulate, Monitor and Report trading by Insiders
8 Policy on Related Party Transactions
9 Policy on Board Diversity
10 Whistle Blower Policy
11 Corporate Social Responsibility Policy
12 Nomination and Remuneration Policy
13 Sexual Harassment Policy

The above mentioned policies and code are available on the website of the Company.

Details Of Internal Financial Controls Related To Financial Statements

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys 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 disclosures.

Nandan Denim Limited has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 1956 to the extent applicable. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Statutory Auditoर

The Company operates in SAP, an ERP system and has many of its accounting records stored in an electronic form and backed up periodically. The ERP system is configured to ensure that all transactions are integrated seamlessly with the underlying books of account. The Company has automated processes to ensure accurate and timely updation of various master data in the underlying ERP system.

The management periodically reviews the financial performance of your Company against the approved plans across various parameters and takes necessary action, wherever necessary.

For all amendments to Accounting Standards and the new standards notified, the Company carries out a detailed analysis and presents the impact on accounting policies of the Group, the impact on financial results, including revised disclosures to the Audit Committee. The approach and changes in policies are also validated with the statutory auditoर The Company takes steps to make these amendments as part of the underlying ERP systems to the extent possible.

Your Company has a code of conduct applicable to all its employees along with a Whistle Blower Policy which requires employees to update accounting information accurately and in a timely manner. Any non - compliance noticed is to be reported and actioned upon in line with the Whistle Blower Policy.

The Company gets its standalone accounts audited every quarter by its Statutory Auditoर

Risk Management

The Company has a well-defined risk management framework in place. Further, it has established procedures to periodically place before the Board, the risk assessment and management measures. As such, there are no risks which in the opinion of the Board threaten the existence of the Company. However, the details of the risks faced by the Company which may pose challenges and the mitigation thereof are discussed in detail in the Management Discussion and Analysis Report that forms part of the Annual Report.

Insurance

All properties and insurable interests of the Company including buildings, plant & machinery and stocks have been adequately insured.

Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace

The Company has in place a Policy on Prevention of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention,

Prohibition and Redressal) Act, 2013 ("Prevention of Sexual Harassment of Women at Workplace Act") and Rules framed thereunder and an Internal Complaints Committee (ICC) has also been set up to redress complaints received regarding sexual harassment at three places i.e. Corporate Office, Piplej Plant and Bareja Plant.

The Company believes in zero tolerance towards sexual harassment at workplace and maintains itself as a safe and non - discriminatory organization. The ICC members have been trained in handling and resolving complaints and also meet at regular intervals.

During the financial year 2018-19, no cases in the nature of sexual harassment were reported at any workplace of Nandan Denim Limited.

Corporate Social Responsibility

During the financial year ended March 31, 2019, the Company incurred CSR expenditure of RS.1.60 cr. (Rupees One Crore and Sixty Lakh Only). The CSR initiatives of the Company is mainly under the thrust area of education.

The Companys CSR Policy statement and Annual Report on the CSR activities undertaken during the financial year ended March 31, 2019, in accordance with section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) is set out in Annexure C to this Report.

Extract Of Annual Return

The details forming part of the extract of the Annual Return as on March 31, 2019 in Form MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure - B to this Report and is also available on the website of the Company.

Secretarial Standards

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.

Deposits

During the year under review, the Company has not accepted any deposits within the meaning of section 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 [including any statutory modification(s) or re-enactment(s) thereof for the time being in force] and Chapter V of the Companies Act, 2013.

Vigil Mechanism

The Company has a robust vigil mechanism through its Whistle Blower Policy approved and adopted by Board of Directors of the Company in compliance with the provisions of Section 177 (10) of the Act and Regulation 22 of the SEBI Listing Regulations.

The Company has developed an in-house system which can be used to, inter alia, report any instances of financial irregularities, breach of code of conduct, abuse of authority, disclosure of financial/price sensitive information, unethical/unfair actions concerning company vendors /suppliers, mala-fide manipulation of Company records, discrimination to the Code of Conduct in an anonymous manner.

The Policy also provides protection to the employees and business associates who report unethical practices and irregularities. Any incidents that are reported are investigated and suitable action is taken in line with the Whistle Blower Policy. The Whistle Blower Policy of the Company can be accessed at website of the Company at www.nandandenim.com/policies/.

Material Changes And Commitments

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2018-19 and the date of this report. Barring unforeseen circumstances, the Directors of your Company expect continued growth in turnover and profitability in future.

Significant and Material Orders Passed by the Regulators or Courts

There have been no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

Green Initiatives

In order to save environment by cutting down the consumption of paper, the Ministry of Corporate Affairs (MCA) has introduced "Green Initiative in Corporate Governance" by allowing paperless compliance by companies under the provisions of the Companies Act. MCA had further announced that the Directors of the Company may participate in a meeting of Board or Committee of Directors, under the provisions of the Companies Act, through electronic mode. Participation of Directors in the Board or its Committee meetings through video conferencing is an approved way of attending the meetings and such participation is considered for the purposes of quorum, authority, etc. The Companies are also mandated to conduct the postal ballot through electronic means. In future, if there is any requirement of passing resolutions through postal ballot, Nandan Denim Limited will conduct the ballot process in the e-voting mechanism.

To preserve environment, your Company regularly undertakes green initiatives which not only reduce burden on environment but also ensure secured dissemination of information. Such initiatives include energy saving, water conservation and usage of electronic mode in internal processes & control, statutory and other requirement. NDL started sending documents like notices convening General Meetings, Financial Statements, etc. including Annual Reports in electronic form, to the email addresses made available to us by the depositories from time to time. We appreciate the initiative taken by MCA as it helps in prompt receipt of correspondence and also avoids delay or losses caused through post. Annual Report is also available on our website namely www.nandandenim.com.

Further, as a member, you will be entitled to be furnished with a copy of the above mentioned documents as required, free of cost, upon receipt of a requisition from you any time. We would appreciate your support on our desire to participate in the green initiative.

Annexures

Following statements/reports/certificates are set out as Annexures to the Directors Report:

Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo

Extract of Annual Return under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 (1) of Companies(Management & Administration) Rules, 2014 in Form MGT-9.

Details of CSR activities and spends under Section 135 of the Companies Act, 2013.

Annual Secretarial Compliance Report pursuant to Regulation 24A of SEBI Listing Regulations.

Secretarial Audit Report pursuant to Section 204 of the Companies Act, 2013.

Information as per Section 197 of the Companies Act, 2013

Form AOC - 2

Appreciations

The Board of Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, co-operation and dedication during the year. Further, the Board sincerely conveys its appreciation to its customers, Shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board of Directors

Vedprakash Chiripal Jyotiprasad Chiripal
Place: Ahmedabad Chairman Managing Director
Date: August 12, 2019 (DIN: 00290454) (DIN: 00155695)