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Aditya Mills Ltd.

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Aditya Mills Ltd. (ADITYAMILLS) - Director Report

Company director report

TO THE MEMBERS

Your Directors have pleasure in presenting their 57h Annual Report on thebusiness and operations of the company together with the Audited financial Statements forthe year ended on 31st March 2017.

FINANCIAL RESULTS

The financial results for the year are given below:

(Rs. in lacs)

2016-2017 2015-2016
Net Sales/lncome from Business Operation 20.40 85.72
Other Income
Profit/Dividend on investment activity 17.18 22.69
Gain on sale of land 0.00 284.79
Others 12.03 10.51
29.21 317.99
Total Income 49.61 403.71
(Loss)/Profit for the year before tax (57.55) 263.85
Less: Provision for Taxation
Income Tax for the year 0.00 51.66
Income Tax for previous year 0.46 0.22
Deferred Tax (1.011 (3.601
(0.551
48.28 (Loss)/Profit for the year (57.001 215.57

Review of Business Operations and Future Prospects:

During the year under review your company could not effect much sale of its land atKishangarh due to sluggish market conditions prevailing locally. Due to unfavourableconditions4prevailing in real estate all over our country and recession inlocal businesses funds available with the company continue to be invested in mutualfunds. The company is trying to reduce its investments in real estate on account ofcontinued recessionary trends in this sector.

Dividend:

Directors regret their inability to recommend any dividend.

Share Capital:

There is no change in shSie capital of the company under review.

Reserves:

During the year Rs. 2.68 lacs was transferred from revaluation reserve to capitalreserve on the basis of land sold during the year.

Committees of the Board:

During the year in accordance with the Companies Act 2013 the Board has constituted/ reconstituted some of its Committees. There are currently four Committees of the Boardas follows:

• Audit Committee

• Nomination and Remuneration Committee

• Independent Directors’ Committee

• Stakeholder relationship committee.

Extract of annual return:

In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return u/s 92 (3)oftheAct in the prescribed format is appended as AnnexureA’to the Board’s report.

Number of Board meetings held with dates:

Four Board meetings were held during the year. The details of Board meetings are givenbelow:

Date Board Strength No. of Directors Present
8’h July 2016 6 5
20th October 2016 6 5
6th January 2017 6 5
28* February 2017 - 6 5

Particulars of Loans Guarantees and Investments under Section 186:

Details of Investments: The company during the year made new investments of Rs. 10.00lacs in Mutual Funds as under:-

S.No. Date of Investment Details of Investee Amount (In Lacs) Purpose for which the proceeds from investment is proposed to be utilized by the recipient Date of Board Resolution Date of Special Resolution (if required) Expected Rate of Return
1. 09.12.16 Birla Sunlife Govt. Securities Long Term (Growth) 5039.896 units 2.50 N.A. N.A. N.A. 8%
2. 10.01.17 Birla Sunlife Dynamic Bond Fund Retail (Growth) 11858.377 units 3.50 N.A. N.A. N.A. 8%
3. 22.03.17 Birla Sunlife Medium Term Plan (Growth) 19670.906 units 4.00 N.A. N.A. N.A. 8% *

Related Party Transactions:

During the year company did not enter into any contracts or make arrangements with anyrelated party as referred to in Section 188(1) of the Companies Act 2013 exceptappointment and remuneration pai6 to Chairman & Whole Time Director for which approvalwas taken from the shareholders and subject to approval of Central Government. Furthertransaction made with related party during the year as given in Form AOC-2 has beenenclosed with the report. (See "Annexure-B")

Subsidiary/Associates/Joint Venture Companies:

The Company does not have any subsidiary/Associates or Joint Ventures Companies.

Auditors’ Report and Explanation to Auditors’ Remarks: '•

The company has already complied with the Accounting Standards prescribed by theInstitute of Chartered Accountants of India and is constantly endeavouring to ensureadherence to the same and their norms as may be prescribed from time to time.

Regarding observation for valuation of stock-in-trade it was already informed in thepast that the land in question was converted into stock-in-trade in the financial year2001-2002 when the company commenced Real Estate Business. The company has consistentlysold this land at a higher price than this book value thereby facilitating its revival.

Regarding default in repayment of unsecured loan from SICOM due to paucity of fundsthe company could not make the payment. However efforts are going on and company ishopeful to clear the dues in due course. Similarly dues to custom authority have not beenpaid as demand is very old and there is an ambiguity about the demand itself.

The other notes referred to by the Auditors in their Report being self-explanatory and/ or suitably explained / clarified hereinafter require no further explanation.

Secretarial audit Report Explanation to the remarks thereon:

M/s. R. Chouhan & Associates Practicing Company Secretaries Jaipur were appointedto conduct the secretarial audit of the company for the financial year 2016-17 asrequired under Section 204 of the Companies Act 2013 and Rules thereunder.

The secretarial audit report for the Financial Year 2016-17 forms part of the AnnualReport as "Annexure C" to the Board’s report.

Regarding not complying with listing agreements made before a long period the companywas declared sick in 1994 and in 1996 the operation of the company stopped. Due tofinancial crises almost all staff left and the company was not in a position to employhigher paid staff to ensure compliances of Listing Agreements. Further there were notransactions in Calcutta Stock Exchange since over 20 years.

Regarding non redemption of Preference Share Capital and payment of dividend thereon asin past there were no surplus funds therefore the company was not in position to pay thesame. Hcfe/vever now Board is considering means to settle these dues.

Deposits:

The company has neither accepted nor renewed any deposits during the year under review.Further in respect of Rule 2(1 )(c )(viii) of the Companies (Acceptance of Deposits) Rules2014 Company does not accept any amount as unsecured loan from its directors and theirrelatives.

Directors’ Responsibility Statement

The financial statements are prepared in accordance with the Generally AcceptedAccounting Principles (GAAP) under the historical cost convention on accrual basis exceptfor certain financial instruments which are measured at fair values. GAAP comprisesmandatory accounting standards as prescribed under Section 133 of the Companies Act 2013(‘the Act’) read with Rule 7 of the Companies (Accounts) Rules 2014 theprovisions of the Aqt (to the extent notified) and guidelines issued by the Securities andExchange Board of India (SEBI). There are no material departures from prescribedaccounting standards in the adoption of these standards the Board of Directors of thecompany hereby state and confirm that the directors have:

(i) in the preparation of the Annual Accounts for the Financial Year ended 31stMarch 2017 the applicable Accounting Standards followed along with proper explanations(if any) relating to material departures;

(ii) selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the company at the end of the financial year and of the loss of thecompany for the year under review;

(iii) taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies’ Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities; and

(iv) prepared the Annual Accounts for the Financial Year ended 31st March2017 on a ‘going concern’ basis.

(v) laid down internal financial controls which are adequate and are operatingeffectively.

(vi) devised proper systems to ensure compliance with the provisions of all applicablelaws and such systems are adequate and operating effectively.

Personnel

In terms of provisions of Section 197(12) of the Companies Act 2013 read with Rules5(2) and 5(3) of the Companies (appointment and Remuneration of Managerial Personnel)Rules 2014 as amended wide notification dated 30/06/2016 no employee of the Company hasdrawn salary in excess of Rs. 10200000/- per annum or Rs. 850000/- per month. Furtherlist of top 10 employees are as under:-

S. No. Name of the Employee Remuneration In Rupees Perquisites In Rupees Total In Rupees
1. Shri A.K. Kanoria 1320000 132000 1452000
2. Shri D. Kanoria 1200000 129040 1329040
3. Sh. i Bipin Shah * 283635 25100 308735
4. Smt. Mansi M. Rane 291306 27081 318387
5. Shri N.C. Patni 276000 24000 300000
6. Shri Lai Singh ** 81960 6550 88510
7. Shri Prince Sharma 112000 0 112000
8. Shri N. R. Kadam *** 44420 4100 •. 48520

* employed for the period of 8.50 months only

** employed for the period of 5.00 months only *** employed for the period of 2.00months only

Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rules 5(1) of the Companies (appointment andRemuneration of Managerial Personnel) Rules 2014 is enclosed as per "AnnexureD."

Auditors:

The Companies Act 2013 (‘the Act’) was notified effective 1stApril 2014. Section 139 of the Act lays down the criteria for appointment and mandatoryrotation of statutory auditors. Pursuant to Section 139 of the Act and the Rules madethere under it is mandatory to rotate the statutory auditors on completion of two termsof five consecutive years. The Rules also lay down the transitional period that can beserved by the existing auditors depending on the number of consecutive years for which anaudit firm has been functioning as auditors in the same company. The incumbent auditorsM/s. GP. Kejriwal & Co. Chartered Accountants Jaipur (Firm Registration No. 001036 C)have served the company for over 10 years before the Act was notified and will becompleting the maximum number of transitional period (three years) at the ensuing 57thAGM.

On the basis of audit committee's recommendation your Board of Directors proposes toappoint M/s. R. S. Mangal & Co. Chartered Accountants Jaipur (Firm Registration No.001472C) as the statutory auditors of the Company. M/s. R. S. Mangal & Co. as thestatutory auditors of the Company will hold office for a period of five consecutive yearsfrom the conclusion of the 57lh Annual General Meeting of the Company till theconclusion of 62nd Annual General Meeting to be held in the year 2022. In thisregard company has received letter from above said firm that they are not disqualified forappointment and if appointment made within the limit as specified under the Act.

Directors:

During the period under review Shri Gautam Kanodia Independent Director of thecompany resigned from the Board and his resignation was accepted by board w.e.f. 24thJune 2017. The„ Board places its sincere appreciation towards the valuablecontribution received from Shri Gautam Kanodia during his tenure as Independent Directorof the company.

Shri Rajeev Laxmiprasad Goenka was appointed as an additional independent directorw.e.f. 23* June 2017 and to be regularised as independent directors in the ensuing AnnualGeneral Meeting.

Smt. Hansa Singh Nominee Director Government of Rajasthan has not attended any meetingduring the year under review.

Pursuant to Section 152 of the Companies Act 2013 none of the directors of thecompany are liable to retire by rotation at the forthcoming Annual General Meeting.

Further during the year approval has been received from Central Government forremuneration tobepaidtoShriAshwini Kumar Kanoria fromApril 2015to March 2017remuneration to be paid to Shri Devapriya Kanoria fromApril 2014 to 26thMarch 2016 and approval for appointment of Shri Devapriya Kanoria as Managing Directorfrom 27h March 2016 to 26m March 2021. .

Further approval for appointment as Whole Time Director and remuneration of ShriAshwini Kumar Kanoria from April 2017 to March 2022 is under process with CentralGovernment.

Nomination & Remuneration Committee Policy: .

Resignation of Shri Gautam Kanodia was accepted in the Board Meeting of Board ofDirectors held on 23.06.2017 being his resignation effective from 24.06.2017 thereforeyour Board of Directors reconstitute the Nomination and Remuneration Committee and itconsists of the following members who are all Independent:

a. Shri Aditya Bubna (Chairman)

b. Shri Rajeev Laxmiprasad Goenka

c. Smt. Arti Kanodia

The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on March 31 2017 the Board consists of 6 members two of whom aremanaging or Whole-Time Directors one nominee Director and three are independentdirectors. The Board periodically evaluates the need for change in its composition andsize.

The policies of the Company on directors’ appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided under Sub-section (3) of Section 178 of the Companies Act 2013are adopted by the Board. We affirm that the remuneration paid to the directors is as perthe terms laid out in the nomination and remuneration policy of the Company and approvalfrom Central Government.

Our policy on the appointment and remuneration of directors and key managerialpersonnel provides a framework based on which human resources management aligns theirrecruitment plans for the strategic growth of the company.

The company considers human resources as its invaluable assets. This policy onnomination and remuneration of Directors Key Managerial Personnel (KMPs) and otheremployees has been formulated in terms of the provisions of the Companies Act 2013 to payequitable remuneration to the directors KMPs and employees of the company and toharmonize the aspirations of human resources.

Objective and purpose of the policy:

- To formulate the criteria for determining qualifications competencies positiveattributes and independence for the appointment of a director (executive/nqn executive)and to the Board policies relating to the remuneration of the directors KMPs and otheremployees.

- To address the following items: committee member’s qualification committeemember’s appointment and removal: committee structure and operations and committeereporting to

the Board. •

- To formulate the criteria of performance of all the directors on the Board.

- To devise a policy on Board diversity; and

- To lay out remuneration principals for employees linked to their effortsperformances and achievements relating to the company’s goals.

Declaration by independent directors:

The Company has received necessary declaration from each of the independent directorsunder Section 149(7) of the Companies Act 2013 that he/she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013.

Board evaluation:

The Board shall monitor and review the Board evaluation framework. The Companies Act2013 states that a formal annual evaluation needs to be made by the Board of its ownperformance and that of its committees and individual directors. Schedule IV of theCompanies Act 2013 states that the performance evaluation of independent directors shallbe done by the entire Board of Directors excluding the director being evaluated. Theevaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board.

Risk Management:

As part of Risk Management framework the company reviewed periodically the variousrisks and finalized mitigation plans. The risk areas identified by the Risk Managementframework were covered by the Internal Audit and major risks were discussed periodically.

Disclosure of Composition of Audit Committee and provide Vigil Mechanism:

Resignation of Shri Gautam Kanodia was accepted in the Board Meeting of Board ofDirectors held on 23.06.2017. As his resignation shall be effective from 24.06.2017therefore your Board of Directors reconstitute the Audit Committee and it consists of thefollowing members:

a. Shri Aditya Bubna (Chairman)

?. Shri Rajeev Laxmiprasad Goenka

?. Shri Devapriya Kanoria

The above composition of Audit Committee consists of Independent Director viz. ShriAditya Bubna and Shri Rajeev Laxmiprasad Goenka who form the majority.

Our company has established Vigil Mechanism and adopted Whistle Blower Policy as perthe provisions of Section 177 of the Companies Act 2013 and the applicable rules.

The Whistle Blower Policy is a channel to reinforce a robust implementation of thecompany’s Code of Conduct. Through the Policy the company seeks to provide aprocedure for all the employees of Aditya Mills Limited to disclose any unethical andimproper practice taking place in the company for appropriate action and reporting.Appropriate Authority shall address the concerns of Directors and Employees.

Significant and material orders: ‘

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company’s operations in future.

Internal financial control and its Adequacy:

The company has adequate internal controls commensurate with the size and nature of itsbusiness.

The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company’s policies thesafeguarding of its assets

the prevention and detection of frauds and errors the accuracy and completeness. oTtheaccounting records and the timely preparation of reliable financial disclosures.

Material Changes Affecting the Financial Position of the Company:

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which the financial statements relateand the date of this report.

Disclosures under Sexual Harassment of Women at workplace (Prevention Prohibition& Redressal) Act 2013.

The company is committed to provide a safe and conducive work environment to itsemployees. During the year under review no case of sexual harassment was reported.

Conservation of Energy Technology Absorption and Foreign exchange earnings and outgo:

Information on conservation of Energy Technology absorption Foreign Exchange earningsand outgo required to be disclosed under Section 134 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 are provided hereunder

Particulars Remarks
A) CONSERVATION OF ENERGY:
• the steps taken or impact on conservation of energy; N.A.
*• the steps taken by the company for utilizing alternate sources of energy; N.A. -
• the capital investment on energy conservation equipments; N.A.
B) 1ECHNOLOGY ABSORPTION:
• the efforts made towards technology absorption; N.A.
• the benefits derived like product improvement cost reduction product development or import substitution; N.A.
• in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-
(a) the details of technologyjtnported;-
(b) the year of import;
(c) whether the technology been fully absorbed;
(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; Not applicable since 5 years period is over N.A.
• the expenditure incurred on Research and Development N.A.

During the period under review the foreign exchange earnings or out flow were as under:

(Rs. in lacs)

Particulars Year ended 31s* March 2017 Year ended 31st March 2016
Foreign Exchange earnings Nil . Nil
Foreign Exchange outgo
(including reimbursement of expenses) Rs. 3.02 Rs. 3.29

Corporate Social Responsibilities (CSR)

The company does not meet the criteria of Section 135 of Companies Act 2013 read withthe Companies (Corporate Social Responsibility Policy) Rules 2014 so there is norequirement for constitution of Corporate Social Responsibility Committee.

Acknowledgements:

The Board places on record its appreciation for the continued support and encouragementextended to the company by shareholders Central and State Governments consultantsbanks employees and other stakeholders whose co-operation and support has immenselyenriched the company.

For and on behalf of the
Board of Directors
A. K. Kanoria
Place: Mumbai Chairman of the Meeting
Date: 23rd June 2017 DIN 00182770