Dear Members,

The Directors present the Eleventh Annual Report of the Company together with the Audited Financial Statements of the Company for the Financial Year ended 31st March, 2017.

1. FINANCIAL PERFORMANCE (Rs. in Lakhs)

Note: Previous year figures are not comparable, since current year figures include the effect of merger of erstwhile Momai Apparels Limited into the Company with appointed date as 1st April, 2016, and current year figures also include effect of merger of Momai Apparels Limited into the Company.

2. SCHEME OF ARRANGEMENT

Subsequent to the approval of the shareholders at the Court Convened Meeting held on 30th November, 2016 and through Postal Ballot on 28th February, 2017, to the Scheme of Arrangement between Momai Apparels Limited with Ashapura Intimates Fashion Limited and their Respective Shareholders and Creditors, your Company had filed the petition for sanction of the Scheme of Arrangement with the Hon’ble High Court of Mumbai.

Consequent to the notification of certain pending sections of Companies Act, 2013 including sections related to the Compromise and Arrangements and National Company Law Tribunal (NCLT), the jurisdiction for sanctioning the Scheme of Arrangement has been transferred from High Court of Mumbai to the NCLT, Mumbai Bench. The Scheme was pending with NCLT for sanction as on 31st March, 2017.

Currently, Scheme of Arrangement has been approved by the Hon’ble National Company Law Tribunal on 28th September, 2017 with appointed date 1st April, 2016.

Pursuant to the Scheme of Arrangement, your Company shall issue and allot 10 fully paid up Equity Shares of the Company of Rs 10/- each to the equity shareholders of Momai Apparels Limited for every 27 fully paid up Equity Shares of Rs 10/held by them in Momai Apparels Limited. The Scheme of Arrangement will enable the Company to consolidate and effectively manage the Transferor Company and the Company in a single entity, which will provide several benefits including synergy, economies of scale, attain efficiencies and cost competitiveness.

3. TRANSFER TO RESERVES

The Company has transferred an amount of Rs.1967.72 Lakhs to Reserve Account during the year under review.

4. SHARE CAPITAL

The paid up Equity share capital as at 31st March, 2017 stood at Rs.1,946.72 Lakhs. 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.

The details of warrants issued during the year are disclosed in the report of Corporate Governance, which is attached to this report.

5. DIVIDEND

No dividend was declared by the Company during the financial year 2016-17 in view of accumulation of profits.

6. FINANCES AND ACCOUNTS

During the financial year 2016-17, the country experienced two landmark economic reforms even as the global economic scenario was indifferent. Firstly, the Goods and Services Tax (“GST”) would be applicable on the supply of goods or services as against the present concept of tax on the manufacture or sale of goods or provision of services. GST, being a destination based consumption tax, would accrue to the states or the union territories where the consumption takes place. It would be a dual GST with the Centre and states simultaneously levying tax on a common tax base. GST has been in effect from 1st July, 2017. Secondly, the Reserve Bank of India, by a notification dated 8th November, 2016, withdrew 500 and 1000 denominations of bank notes, thereby affecting growth in the last two quarters of the financial year ended 31st March, 2017.

Also, the Company has, through Postal Ballot dated 27th August, 2017, approved issue of Non-Convertible Debentures for an aggregate amount upto Rs.25 Crore (Rupees Twenty Five Crores only) on private placement basis.

7. DEPOSITS

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

8. CREDIT RATING

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

9. QUALITY AND HONORARY

The focus on productivity gains and consistent quality continues to be the cornerstone of the Company’s philosophy and as an honorary for the same the Company has received an award on 7th October, 2016 namely Alina Entrepreneur Excellence Award and The Economic Times best Brand Award 2017 on 11th February, 2017.

10. HUMAN RESOURCE

Relation with employees in the corporate office, factory and all stores continue to be cordial. 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 level.

The ratio of remuneration of each director to the median employee’s remuneration and other details in terms of Section 197 of the 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. In terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the aforesaid Annexure 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.

11. SUBSIDIARY COMPANY

Pursuant to Scheme of Arrangement as stated above, Momai Apparels Limited cease to be Subsidary of the Company, appointed date being April 1, 2016.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL Re-appointment of Director

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Dinesh Chanubha Sodha (DIN: 02836240) and Mr. Hitesh Subhash Punjani (DIN 03268480), Directors of the Company shall retire by rotation and being eligible offer themselves for re-appointment. The Board recomments their re-appointment for consideration of Members at the ensuing AGM.

Appointment and resignation of Directors/Key Managerial Personnel

During the year, Ms. Manisha Pareek, Company Secretary and Compliance Officer of the Company has resigned with effect from 30th June, 2016 and the Board has appointed Ms. Bhoomi Mewada as the Company Secretary and Compliance Officer of the Company with effect from 23rd July, 2016.

Also, the Board has approved the change in designation of Mr. Mohit Shah from Chief Financial Officer to Chief Executive Officer of the Company with effect from 11th August, 2016 and appointed Mr. Anurag Gangwal as the Chief Financial Officer of the Company with effect from 11th August, 2016.

The details of training and familiarisation programme and Annual Board Evaluation process for Directors have been provided under the Corporate Governance Report.

Statement on declaration given 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 provided under Section 149(6) of the Act and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015) [the “Listing Regulations”].

Further details on the directors including Company’s policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters are given in the corporate governance report which form part of this Annual Report.

13. NUMBER OF MEETING OF BOARD OF DIRECTOR

The details of the number of meetings of the Board held during the financial year 2016-17 forms part of the Corporate Governance Report.

14. PARTICULAR OF LOANS, GUARANTEE OR INVESTMENTS

Details of Loans, Guarantee and Investment covered under section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement provided in this Annual Report.

15. CORPORATE GOVERNANCE

The report on Corporate Governance as stipulated under Regulation 34 (3) read with Para C of Schedule V to the Listing Regulations, 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 Listing Regulations is attached to this report.

16. MANAGEMENT DISCUSSION AND ANALYSIS

As stipulated under Regulation 34(2) of the Listing Regulations, the Management Discussion and Analysis Report on the operations of the Company, is attached to this Report.

17. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 as required under Section 92 of the Companies Act, 2013, is annexed as “Annexure - B” to this Report.

18. PARTICULARS OF CONTRACTS OR ARRANGEMENT MADE WITH RELATED PARTIES

During the year under review, all transactions entered into by the Company with related parties as defined under the Act and the Listing Regulations, were in the ordinary course of business and on an arm’s length basis.

Particulars of contracts or arrangements with related parties as required under Section 134(3)(h) of the Act, in the prescribed Form AOC-2 is annexed as “Annexure - C” to this Report.

The details of the transactions with Related Parties are provided in the notes to Financial Statements.

19. AUDITORS Statutory Auditor

At the Annual General Meeting held on 26th September, 2014, JDNG & Associates, Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the year 2017.

Your Company has recommended M/s. Bagaria & Co LLP to be appointed in the upcoming Annual General Meeting of the Company to hold office for a term of five years from the conclusion of this Annual General Meeting till the conclusion of the sixteenth Annual General Meeting of the Company to be held in the year 2022, subject to ratification of their appointment by the Members at every Annual General Meeting. M/s. Bagaria & Co LLP, Chartered Accountants have confirmed their eligibility under section 141 of the Companies Act, 2013 and the related Rules to continue as the statutory auditor of the Company for the financial year 2017-18.

Secretarial Auditor

Pursuant to the provision of Section 204 of the Companies Act, 2013 M/s Jaiprakash Singh & Associates, Practicing Company Secretary have been appointed to conduct the Secretarial Audit of the Company for the finacial year 2016-17. The Secretarial Audit Report is annexed as “Annexure - D” to this Report. The report is based on the standalone financial statements of the Company.

Auditor’s Observations:

There were no audit qualifications in the Statutory Auditors Report as well as in the Secretarial Audit Report for the financial year 2016-17 as annexed to this Annual Report.

20. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3) (c) of the Companies Act, 2013 that:

- in the preparation of the annual accounts for the financial year ended 31st March, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- they 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 at the end of the financial year 2016-17 and of the profit of the Company for that period;

- they have 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;

- they have prepared the annual accounts on a going concern basis;

- they have laid down internal financial controls, which are adequate and are operating effectively;

- they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

21. CORPORATE SOCIAL RESPONSIBILITY

In terms of Section 135 of the Companies Act, 2013, the Board of Directors of your Company has constituted a Corporate Social Responsibility Committee (“CSR Committee”) under the Chairmanship of Executive Director of the Company.

The CSR Committee of the Board has formulated a CSR Policy which has been uploaded on the website of the Company at http://www.ashapurafashion.com/investor/CSR%20Policy. pdf

The Annual Report on CSR activities as prescribed under Section 135 of the Companies Act, 2013 is annexed as “Annexure - E” to this report.

22. INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has an internal control system, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Based on the report of internal audit function, the Company undertakes corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

Except to the order passed by the Hon’ble National Company Law Tribunal related to Scheme of Arrangement between Momai Apparels Limited and Ashapura Intimates Fashion Limited and their respective Shareholders and Creditors (explained in detail under point 3 of this report), no other significant and material orders passed by the Regulators or Courts that would impact the Company and its future operations.

24. SEXUAL HARASSMENT:

The Company has constituted an Internal Complaint Committee as required under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. During the year under review, no complaints were reported.

25. SAFETY, ENVIRONMENT CONTROL AND PROTECTION:

The Company is aware of the importance of environmentally clean and safe operations. The Company’s 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.

26. REPORTING OF FRAUDS

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

27. MATERIAL CHANGES AND COMMITMENTS

Except as disclosed elsewhere in this Report and its Annexures, no material changes and commitments, which could affect the Company’s financial position, have occurred between the end of the financial year of the Company and the date of this Report.

28. 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 cross-checking 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 (24°C). 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 the all 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 equipments : NIL

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 Company’s operations do not require significant import of technology.

29. Cautionary Statement

Statement in the Annual Report, particularly those which relate to Management Discussion and Analysis, describing the Company’s objectives, projections, estimates and expectation, may constitute ‘forward looking statement’ within the meaning of applicable laws and regulations Although the expectation are based on reasonable assumptions, the actual results may differ.

30. Acknowledgement and Appreciation

Your Directors wish to convey their appreciation for the assistance and co-operation received from the shareholders, customers, dealers, suppliers, bankers, Government and all other business associates for the continuous support given by them to the Company and their confidence in its management.

Your 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 Board of Directors

30th November, 2017 Harshad H Thakkar

Mumbai Chairman and Managing Director

DIN: 01869173