Dear Shareholders

We take pleasure in welcoming you to our first Annual Report as a listed enterprise. Atthe outset we would like to take this opportunity to thank all our investors forparticipating in our Initial Public Offering launched in December 2014. We are determinedto maintain the highest standards of corporate governance and to assure you all of ourcommitment towards achieving value creation and growth.

A Differentiated Apparel Company

As you all are aware that our journey to establish the brand started way back in 1984when your company was part of the parent company Oswal Woollen Mills Ltd. The main Mottoof the management since the inception of the brand was to create quality product and aswell as achieve the standards of a good brand. The efforts put through at all levelsbecause a stand alone effort can never create a valuable and acceptable brand. Thus ourendeavour was always to have a focused and concentrated approach at all levels beginningfrom input of raw material till the stage of ready to sell over the years. As a resultMonte Carlo has emerged as one of the leading apparel brand both in terms of revenue andbrand stature. Inspired by success and recognition or Monte Carlo Brand in the market thecompany forayed into new territories in 2002 though identical and similar to the existingbusiness. This diversification by the company received overwhelming support from allquarters and fulfilled the desire to have our presence in the market round the year.Accordingly we expanded our horizon and diversified our business operations by introducingcotton knitted t-shirts. The overwhelming response and acceptance of cotton t-shirts bythe market encouraged the company to introduce other cotton garments viz. shirtstrousers jackets tracksuits etc. in 2006. With the passage of time and right efforts andhigh imagery value of Monte Carlo brand earned by us helped us in getting a good responsefor our diversified product range consequently resulting in high growth rates. Encouragedby the success the growth potential of the business was estimated to be manifold thusinspired the management to have more focus on the business by forming a separate companywhich resulted in the birth of Monte Carlo Fashions Limited in 2011 i.e. your companywithin its folder lock stock and barrel of Monte Carlo.

Over the years we have successfully expanded our horizon and diversified our businessoperations. We have travelled a long way in accomplishing our goals for becoming adiversified apparels company with a rich portfolio comprising of a wide range of woollencotton and cotton blended knitted woven apparels and home furnishings. Some of ourwinning sub-brands under the umbrella brand Monte Carlo are: Platine Alpha Denim andCloak & Decker. The consistent growth in business is the Motto but the brief is thatit should be at all levels in other words to have a mindset of profitable growth. InMonte Carlo we go with a firm belief and commitment that the success will come as ourtradition and growth should be imperative.

The prime strength behind our leadership position in the domestic apparels industry hasbeen our robust distribution network and for the most part our differentiated businessmodel. We have a presence across India through 1500-plus multi-brand outlets (MBO) 214Exclusive Brand Outlets (EBO) and 89 national chain store outlets. A majority of ourrevenues are contributed by these MBOs and Franchisee EBOs where the merchandise isprimarily sold on a pre-ordered and outright basis. This has insulated us from majorinventory risks and keeps us adequately protected from the routine hazards faced by thebranded apparel business. Moreover our model of supplying Monte Carlo products to MBOsthrough agents or distributors and to EBOs against bank guarantee or Post dated chequesmake the company credit risk free. Notably Monte Carlo has repeatedly been recognised asa "Super Brand" for woollen hosiery garments since September 2004 by theInternational Society for Super Brands.

FY2015 Performance

Our performance during the year under review has been quite satisfactory given theoverall sluggish economic environment we experienced during FY2015. We countered thechallenges by focusing on continuous innovation; elevating our design variations; on goodconsumer insights and by launching attractive new collections targeted at the youth. Theseinitiatives provided us with the requisite momentum to report a decent delivery on our topand bottom line. Our revenues for the year FY2015 rose by 15.8% to Rs. 582 crore. OurProfit After Tax (PAT) increased by 9.86% at Rs 59.7 crore. Notably our EBITDA showed amarked YoY improvement of 32.6% at Rs. 122 crore. Even more encouraging is the fact thatour margins on EBITDA increased 270 basis points from 18.4% to 21.1%.

It is important to note that our revenues and PAT recorded for FY2015 are not directlycomparable on a YoY basis due to a change in accounting method during the year underreview. According to the prudent accounting norms suggested by our auditors we havedecided to net-off any expense incurred to propagate sales. These expenses mainly compriseof discounts and rebates against the revenues from operations which earlier formed a partof other selling expenses. Our PAT has also been affected due to the provision of higherdepreciation followed by a change in our depreciation policy as per the new CompaniesAct 2013. As a result our depreciation provisioning expanded by Rs. 7 Crore for FY2015.On the upside our Cash Profits swelled by 32% on YoY basis at Rs. 93 Crores.

FY2015’s performance was essentially the product of our strong brand positioninga better and more appealing product mix aggressive marketing lower cost of raw materialsand the reduction in other expenses through improving operational leverage. Going aheadwe expect our revenues and profits to keep growing at a steady momentum. We expect ouroperating metrics and return ratios to keep improving. Confident of our business model wewill continue our focus on the execution of a well conceived business strategy in our corebusiness areas.

The Path Ahead

We have a concrete plan to scale our business within a competitive environment. Weintend to scale up our EBOs to 275 by FY 2016-17 primarily through the franchisee route.We also wish to expand our presence by penetrating into the Southern and Western regionsof India. We have already made an encouraging beginning towards this goal. Going forwardwe are well placed to capitalise on growth opportunities within the branded apparelindustry. We remain squarely focussed on optimising the utilisation of our assetsleveraging on our quality improving efficiency and maintaining strong relationships withstakeholders.

Besides your company and management beliefs in sharing the fortune with the family ofits shareholders. This philosophy is evident from the recommendation by the Board a maidendividend of 100% on each equity share of Rs. 10.00.

We take this opportunity to thank our investors for their on-going belief in theCompany – and to our Board of Directors for their continued thoughtful advice andgood governance. We also thank our leadership team and our employees for their sheerdedication and strong work culture that keeps us on the winning path.