GANDHIDHAM SPINNING & MANUFACTURING CO. … SPINNING & MANUFACTURING CO. LTD. 52ND ANNUAL REPORT Page 2 N O T I C E Notice is hereby given that the 52nd Annual General Meeting of the

GANDHIDHAM SPINNING & MANUFACTURING CO. LTD. 52ND ANNUAL REPORT

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Board of Directors : 1. Mr. Sukhraj A. Singhvi 2. Mr. Parasmal M. Jain 3. Mr. Pradeep P. Jain

4. Mr. Haresh K. Notani

5. Mrs. Kamladevi P. Jain

6. Mr. Rajkumar Gupta

Auditors : Messer’s Khimji Kunverji & Co.

Office No. 1,2,16 & 17, 1st Floor, Neelam Complex, Plot No. 298, Ward 12-B, Near Grain Seeds & Oil Merc. Association Bldg., Opp. C.G. High School, Gandhidham – Kutch 370 201

Bankers : State Bank of India Gandhidham Co-op. Bank Ltd.

Registered Office : Spinning Mill Building Adipur (Kutch) – 370 205.


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N O T I C E Notice is hereby given that the 52nd Annual General Meeting of the Shareholders of Gandhidham Spinning & Manufacturing Company Ltd. will be held on Wednesday the 30th September 2015 at 04.00 P.M., at Spinning Mill Building, Adipur, Dist. Kutch, Gujarat to transact the following business: Ordinary Business: 1. To receive, consider and adopt the Profit and Loss Statement for the year ended 31st March

2015, the Balance Sheet as at that date and the Report of the Directors and Auditors thereon. 2. To Appoint a Director in place of Mr. Parasmal M. Jain (holding DIN 00486508), who retires

by rotation and being eligible, offers himself for re-appointment. 3. To appoint M/s. Khimji Kunverji & Co. Gandhidham the retiring Auditors, as Auditors of the

company to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting and to fix, their remuneration.

Special Business: 4. To consider and if thought fit, to pass with or without modification(s), the following resolution

as an Ordinary Resolution: “Resolved that pursuant to the provisions of Sections 149, 152, 160 and any other applicable

provisions of the Companies Act, 2013 and the rules made thereunder (including and statutory modification) or re-enactment thereof for the time being in force) Mrs. Kamladevi P. Jain, Women Director (Holding DIN 07139242), who was appointed as an additional director by the Board of Directors of the Company and who holds office as such up to the date of the Annual General Meeting be and is hereby appointed as a Director of the Company.”

5. To consider and if thought fir, to pass with or without modification(s), the following resolution

as an Ordinary Resolution: “Resolved that pursuant to the provisions of Sections 196 and 203(1) read with Schedule V and

other applicable provisions, if any, of the Companies Act 2013, and Rule, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force), consent of the Members be and is hereby accorded to appoint Mr. Sukhraj A. Singhvi (holding DIN: 00246136), who is Director of the Company, as the Whole Time Director (Key Managerial Personnel) of the Company for a period of 5(five) years w.e.f. 28th March 2015 and he shall not draw any remuneration in respect of the said appointment.”

6. To consider and if thought fit, to pass with or without modification(s), the following resolution

as an Ordinary Resolution: “Resolved that pursuant to the provisions of Sections 149, 150, 152, 160 and any other

applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) read with Schedule IV to the Companies Act, 2013, Mr. Rajkumar Gupta (holding DIN 02616025), who was appointed as an Additional Director by the Board of Directors of the Company and who holds office as such up to the date of the Annual General Meeting be and is hereby appointed as an Independent Director of the Company to hold office for a term upto five consecutive years from the conclusion of this Annual General Meeting, not liable to retire by rotation.”


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On behalf of Board of Directors

Sukhraj A. Singhvi Parasmal M. Jain Director Director

DIN : 00246136 DIN : 00486508

Place: Adipur-Kutch Date: 25th August, 2015 Registered Office: Spinning Mill Building P.O.: Adipur (Kutch) – 370 205. Gujarat State Notes: 1. An Explanatory Statement pursuant to Section 102(2) of the Companies Act, 2013, relating to

the Special Business in respect of item no. 4 to 6 mentioned above is annexed hereto.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF / HERSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE PROXY, IN ORDER TO BE EFFECTIVE, MUST BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. A person can act as proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights.

Provided that a member holding more than ten percent, of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as proxy for any other person or shareholder.

3. Member / Proxies should bring the Attendance Slip sent herewith duly filled in for attending the Meeting.

4. The Company’s Register of members and share transfer books will remain closed from the date 22nd September, 2015 to 29th September, 2015 (both days inclusive).

5. All documents referred to in the Notice and Explanatory Statement are open for inspection at the Registered Office during office hours between 11.00 a.m. to 1.00 p.m. on all days except Saturday, Sunday and Public holidays upto the date of the Annual General Meeting.

6. Members are requested to notify changes of address, if any, to the Company.

7. NRI shareholders are requested to immediately inform (a) change in their residential status on return to India for permanent settlement and (b) particulars of NRI Account, if not furnished earlier.

8. If members have more than one folio with the Company in identical order of names, the fact should be intimated to the Company for consolidation into one folio. If further shares are bought by the members, folio number(s) should be mentioned in the forwarding letters to avoid creation of multiple folios.


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EXPLANATORY STATEMENTS PURSUANT TO SECTION 102(2) OF THE COMPANIES ACT, 2013 IN RESPECT OF ITEM NO. 4 TO 6: The following Explanatory Statements sets out all material facts relating to the Special Business mentioned in the accompanying notice: ITEM NO. 4 Based on the recommendations of the Nomination, Remuneration and Compensation Committee, the Board of Directors of the Company have appointed Mrs. Kamladevi P. Jain, Women Director, as an Additional Director of the Company to hold office till the date of the Annual General Meeting. (“AGM”). As an Additional Director Mrs. Kamladevi P. Jain ceases to hold office at this Annual General Meeting and is eligible for reappointment. The Company has received a notice pursuant to section 160 of the Companies Act, 2013 (“the Act”) together with the requisite amount of deposit from a member signifying his intention to propose the appointment of Mrs. Kamladevi P. Jain. Mrs. Kamladevi P. Jain is not disqualified from being appointed as a Director in terms of section 164 of the Act and has given her consent to act as a Director of the Company. The Board considers her presence on the Board will be of immense value to the Company. Accordingly, the Board recommends the resolution in relation to appointment of Mrs. Kamladevi P. Jain as a Director, for the approval by the shareholders of the Company. Except Mrs. Kamladevi P. Jain and Parasmal M. Jain, none of the Directors and Key Managerial Personnel of the Company are concerned or interested, financially or otherwise, in the resolution set out at Item No. 4. ITEM NO. 5 Based on the recommendations of the Nomination, Remuneration and Compensation Committee, the Board of Directors of the Company have appointed Mr. Sukhraj A. Singhvi as a Whole time Director (Key Managerial Personnel) of the Company for a period of 5 (five) years w.e.f. 28th March 2015 subject to the approval of the shareholders of the Company. Considering his experience and long association with the Board, his presence on the Board will be of immense value to the Company. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Sukhraj A. Singhvi as a Director, for the approval by the shareholders of the Company. Except Mr. Sukhraj A. Singhvi, none of the Directors and Key Managerial Personnel of the Company are concerned or interested, financial or otherwise, in the resolution set out at Item No. 5.


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ITEM NO. 6 Based on the recommendations of the Nomination, Remuneration and Compensation Committee, the Board of Directors of the Company have appointed Mr. Rajkumar Gupta as an Additional Director (Independent) of the Company to hold office for a period of five consecutive years, not liable to retire by rotation, subject to the consent by the members of the Company at the ensuing Annual General Meeting. (“AGM”) As an additional Director Mr. Rajkumar Gupta holds office till the date of the AGM and is eligible for being appointed as an Independent Director. The Company has received a notice pursuant to section 160 of the Companies Act, 2013 (“the Act”) together with the requisite amount of deposit from a member signifying his intention to propose the appointment of Mr. Rajkumar Gupta. Mr. Rajkumar Gupta is not disqualified from being appointed as a Director in terms of in terms of section 164 of the Act and has given his consent to act as a Director of the Company. In the opinion of the Board, Mr. Rajkumar Gupta fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder for his appointment as an Independent Director of the Company and is Independent of the Management. The requisite consent has also been received from Mr. Rajkumar Gupta. Copy of the draft letter for appointment of Mr. Rajkumar Gupta as an Independent Director setting out the terms and conditions is available for inspection without any fee by the members at the Registered Office of the Company during normal business hours on any working day, excluding Saturday. Mr. Rajkumar N. Gupta son of Mr. Nandlal Gupta is 42 years old and an Indian National and is a Graduate from Gujarat University. He has a vast experience in Business for more than 22 years. He is now in businesses of the Salt, Excavation, Road building, Earth works and Real Estate. He is also a Director in Samrat Seabrines Private Limted, Vidhi Infraspace Private Ltd., Kutch Greens Infra Private Limited & Partner at Kandla Earth Movers. Considering his vast experience, his presence on the Board will be of immense value to the Company. Accordingly, the Board recommends the resolution in respect of the appointment of Mr. Rajkumar Gupta as an Independent Director, not liable to retire by rotation, for the approval by the shareholders of the Company. Except Mr. Rajkumar Gupta, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, financial or otherwise, in the resolution set out at Item No. 6.



DIN: 00246136 DIN: 00486508 Place: Adipur-Kutch Date: 25th August, 2015 Registered Office: Spinning Mill Building P.O.: Adipur (Kutch) – 370 205, Gujarat State


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ADDITIONAL INFORMATION

Brief Resume of Directors seeking appointment / re-appointment at this Annual General Meeting in pursuance of Clause 49 of the Listing Agreement) Mr. Sukhraj A Singhvi Mr. Sukhraj A. Singhvi, son of Mr. Amarchand Singhvi is 66 years old and an Indian National. Mr. Sukhraj A. Singhvi has a vast experience of Business for more than 45 years in managing business in the area of Salt, Shipping, Tank Terminal, Textiles and Real Estate. Presently being settled at Gandhidham-Kutch the Business hub of Gujarat and actively involved and participant in managing of the company. He is also a shareholder in the company. He is a Director in Friends Oil & Chemical Terminals Pvt. Ltd., Terapanth Foods Ltd., Friends Mercantile Pvt. Ltd., Nidhi Mining Pvt. Ltd., Shantinath Motors Pvt. Ltd., Strands Textile Mills Pvt. Ltd. Mr. Parasmal M Jain Mr. Parasmal M. Jain son of Mr. Munilal Chandanmal Jain is 61 years old and an Indian National and is a Graduate from Rajasthan University and has vast experience in the business and Industrial with vide exposure to finance. He started his business career with trading of cotton fabric in 1975 and later started a readymade garment manufacturing and exporting business in the name of M/s Maruti Apparials at Kandla Free Trade Zone from 1994 to 1998. Presently he is Proprietor in M/s Shell Exports (Kandla), which is located in Kandla Special Economic Zone, Gandhidham. He is also a Director of Strands Textile Mills Pvt Ltd. Mrs. Kamladevi P. Jain Mrs. Kamladevi P. Jain wife of Mr. Parasmal M. Jain is 59 years old and an Indian National. She manages the administration and some other commercial activities of the Company and a Women Director on Board of Company. Mr. Rajkumar N. Gupta Mr. Rajkumar N. Gupta son of Mr. Nandlal Gupta is 42 years old and an Indian National. He is a Graduate from Gujarat University. He has a vast experience of Business for more than 22 years now in businesses of Salt, Excavation, Road building, Earth works and Real Estate. Presently, being settled at Gandhidham-Kutch the Business hub of Gujarat and actively involved and participant in managing of the company. He is also a Director in Samrat Seabrines Private Ltd., Vidhi Infraspace Private Ltd., Kutch Greens Infra Private Limited & Partner in Kandla Earth Movers.


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BOARD’s REPORT To, The Members The Directors hereby present their 52ndAnnual Report on the business, operations and state of affairs of the Company together with the audited financial statement for the year ended March 31st, 2015: FINANCIAL HIGHLIGHTS

The Financial Results of the Company for the year 2014-15 are summarized as under:

Particulars Current Year

(Rs.)Previous Year

(Rs.)Gross Total Revenue 131053.00 2416015.00Profit / (Loss) before Tax (836857.22) 529331.71Less: Tax Expenses 1. Current Tax 0.00 443288.002. Short Provision for Tax of earlier years 25278.00 43646.713. Deferred Tax 0.00 0.00Net Profit/ (Loss) after Tax (862135.22) 42397.00Add: Amount brought forward from Last Year (25781001.96) (25823398.96)Appropriations: Proposed Dividend NIL NILTax on Proposed Dividend NIL NILTransfer to General Reserve NIL NILBalance carried forward to Balance Sheet (26787505.18) (25781001.96)

DIVIDEND: Due to accumulated losses occurred for past years, the Directors do not recommend any dividend for the Financial Year ended on March 31, 2015. TRANSFER TO RESERVE During the financial year 2014-15 the Company has not transferred any amount to General Reserve. STATE OF COMPANY’S AFFAIRS The Company has ceased to be a manufacturing Company since July 1986. During the year, the Company earned income from interest on fixed deposits only. Trading in the equity shares by Bombay Stock Exchange remained suspended throughout the year. CHANGE IN NATURE OF BUSINESS: There has been no change in the nature of the business of the company during the financial year. MATERIAL CHANGES AND COMMITMENTS There has been no material changes occurred subsequent to the close of the financial year of the company to which the financial statements relates and the date of the report. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE


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There has been no significant and material order passed by any Regulators, Courts, Tribunal which has impacted the going concern status and future operations of the company. However the Company had received an interim order WTM/PS/08/CFD/June/2013 dated 04.06.2013 from Securities Exchange Board of India (SEBI) in reference to Compliance with the minimum Public shareholding. In this regard a personal hearing was held on July, 08 2015 with SEBI. No further communication has been received from SEBI. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENT The Company has in place adequate internal financial control with reference to financial statement. DETAILS OF SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES As on March 31, 2015, the Company does not have any subsidiary, Joint Venture and Associate company. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY As the company does not have any subsidiary or Joint Venture or Associate company, disclosure requirements of information about its performance and financial position is not applicable. DEPOSITS During the financial year 2014-15, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014. SHARE CAPITAL The Company has not issued any equity share with differential rights; Sweat Equity Shares, Employees Stock Options, Stock Purchase and therefore, disclosure requirements are not applicable. EXTRACT OF THE ANNUAL RETURN The Extract of the Annual Return in Form MGT-9 as required under Section 92 (3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an “ANNEXURE-A” to this Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 The company has not given any Loan, or Guarantee or provided any security in respect of any loan or made any investment during the financial year. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Additional information on conservation of energy and technology absorption as required to be disclosed in terms of Section 134(3) (m) of the Act read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is not applicable as the Company has stopped manufacturing operations with effect from 25.07.1986. However, your company has made necessary efforts to conserve the energy and have taken remedial measures, wherever necessary at regular intervals. There has been no foreign exchange earnings and outgo during the financial year.


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DETAILS OF EMPLOYEES REMUNERATION There were no employees during the financial year ended 31st March, 2015 who were in receipt of remuneration exceeding the prescribed limit pursuant to section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES There were no contracts or arrangements entered into by the Company in accordance with the Section 188 of the Companies Act, 2013. Accordingly, the disclosure of Related Party Transactions as required under section 134 (3) (h) of the Companies Act, 2013 in Form AOC 2 is not applicable BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Changes in composition of the Board –

The Company has designated Mr. Sukhraj A. Singhvi (DIN: 00246136) as a Whole Time

Director for a period of 5 consecutive years commencing from 28th March, 2015.

Pursuant to the provisions of the Companies Act, 2013 and in terms of SEBI circular, the Company has inducted Mrs. Kamladevi P. Jain (DIN: 07139242) as a women Director with effect from 28th March, 2015.

Mr. Mukesh K. Chaudhary (DIN: 02775378) resigned as an Independent Director of the Company with effect from 31st March, 2015.The Board places on record its deep appreciation for the valuable contribution made by him during his tenure as Director of the Company.

Mr. Rajkumar Gupta (DIN: 02616025) was appointed as an Additional Director (Independent) for a period of 5 consecutive years with effect from 25th April, 2015, subject to consent by the Members of the Company at the ensuing Annual General Meeting.

Meetings of the Board The Board of Directors of your Company met 5 times during the year to deliberate on various matters. Independent Director’s Statement Independent Director’s on your Company’s Board have given declarations that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Key Managerial Personnel Mr. Mitesh Singh Chauhan was appointed as Chief Financial Officer with effect from 28th March, 2015.

In terms of provisions of Section 203 of the Companies Act, 2013, Mr. Sukhraj A. Singhvi, Whole Time Director; and Mr. Mitesh Singh Chauhan, Chief Financial Officer are the Key Managerial Personnel of your Company.


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BOARD EVALUATION The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee (“NRC”) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to Section 134 of the Act, the Directors state that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) Appropriate accounting policies have been selected and applied consistently and have 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, 2015 and of the loss of the Company for the year ended March 31, 2015;

(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 were followed by the Company and such internal financial

controls are adequate and were operating effectively;

(f) Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY Section 135 of the Companies Act, 2013 with respect to requirements of constituting a Corporate Social Responsibility (CSR) Committee and formulating and recommending a CSR Policy to the Board does not apply to your Company, as your Company does not come under the threshold limits stipulated under Section 135(1) of the Act. The Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within the purview of Section 135(1) of the Companies Act, 2013. Consequently, it is also not required to formulate a policy on corporate social responsibility. RISK MANAGEMENT The Company has devised and implemented a mechanism for risk management and has framed a Risk Management Policy. The Policy provides for constitution of a Risk Committee, which will


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work towards identifying internal and external risks and implementing risk mitigation steps. Your Company has identified key risks such as operational, compliance, financial, which could be a constraint towards reviving the affairs of your Company. PREVENTION OF SEXUAL HARASSMENT POLICY The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. There were no cases reported during the year ended March 31, 2015 under the Policy NOMINATION AND REMUNERATION COMMITTEE The Company’s policy on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees has been attached as “ANNEXURE-B” to this report. AUDIT COMMITTEE: The Audit Committee of the Board pursuant to Section 177(2) of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 comprises following members as on 31st March, 2015:–

1. Harish K. Notani., Independent Director, Chairman. 2. Parasmal M. Jain, Director. 3. Mukesh K. Chaudhary, Independent Director.

VIGIL MECHANISM: Your Company has in place a vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of your Company’s Code of Conduct. Adequate safeguards are provided against victimization to those who avail of the mechanism and direct access to the Chairman of the Audit Committee in exceptional cases is provided to them. The vigil mechanism is overseen by the Audit Committee. AUDITORS M/s Khimji Kunverji & Co., Chartered Accountants, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed that their appointment, if made, would be in conformity with the provisions of the Act and they are not disqualified for re-appointment. The Audit Committee and Board recommends the re-appointment of M/s Khimji Kunverji & Co, Chartered Accountants as Auditors for the financial year ending 31st March, 2016. AUDITOR’S REPORT There are no qualifications, reservation or adverse remark or disclaimer made by the auditor in their report, except Note 20(1) and 20(2) mentioned under the head “OPINION” in the Auditors’ Report, which are self-explanatory. (a) SECRETARIAL AUDITOR The Board has appointed M/s. Ratan Kapadia & Associates as Company Secretaries, to conduct Secretarial Audit for the financial year 2014-15 The Secretarial Audit report for the financial year ended March 31, 2015 is annexed herewith as “ANNEXURE-C”


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SECRETARIAL AUDIT REPORT Your Directors provide the following explanations and comments on the qualification or reservation or adverse remark or disclaimer mentioned in the Secretarial Audit Report:- The Company is required to maintain minimum public shareholding as per the Securities Contracts (Regulation) Act, 1956 (SCRA) and the Rules made thereunder and Clause 40 of Listing Agreement read with Rule 19(2) and Rule 19A of the Securities Contracts (Regulation) Rules, 1957 The manner/method in which the minimum public shareholding requirement can be met is through:-

I) Issuance of shares to public through Prospectus II) Offer for sale of shares held by Promoters to public through prospectus III) Sale of shares held by promoters through secondary market i.e OFS through stock

exchange. IV) Institutional Placement Program (IIP) V) Right Issues to Public shareholders, with promoters/promoters group shareholders with

promoters/promoters group shareholders forgoing their rights entitlement. VI) Bonus issues to public shareholders, with promoters/ promoter group shareholders forgoing

their bonus entitlement. VII) Any other method as may be approved by SEBI, on a case to case basis.

With substantial erosion of Net worth of the Company, negligible operations, discontinuance of manufacturing activities, current financial health and considering a very small number of public shareholders in the Company, your directors feel that none of the above methods would generate any interest and therefore the Company would not be able to meet the criteria of minimum 25% public holding. The Company has not provided the demat facility as required under the Depositories Act, 1996 and the Regulations and Bye-laws frame thereunder and the Company has not appointed Registrars and Share Transfer Agents as required under the Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client). Due to various reasons stated above, your Directors did not find it feasible to dematerialize the equity shares of the Company and appoint Registrars and Share Transfer Agents. Since the trading in equity shares is suspended, appointment of Depositories as well as Registrars and Share Transfer Agents and dematerialization of shares would not have any benefit to the shareholders. Further the number of shareholders is small and there is no request from any shareholders to dematerialize or transfer any shares. Members of the Company were not provided e-voting facility to vote on all the resolutions passed at the said AGM There are only 163 public shareholders holding 39640 equity shares constituting of 1.18% of the total shareholding of the Company. All these shares are held in physical form and the concerned shareholders have not provided their e-mail ID to the Company. Under the circumstances, the Company could not provide the e-voting facility to the members of the Company at the Annual General Meeting. The Company has not appointed Company Secretary as required under the provisions of section 203 of Companies Act, 2013


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The Company has discontinued manufacturing operation since July, 1986. Considering the size of the operations and earnings of the Company it is not possible to attract qualified Company Secretary. Accordingly Company could not appoint a Company Secretary. The Company has not redeemed 200000, 9.5% Redeemable Cumulative Preference Shares as required under the Companies Act, 2013. The redeemable preference shares can be redeemed only out of

I) Profits of the Company II) Proceeds of the fresh issue of shares

The Company has not generated adequate profits due to the closure of the manufacturing activities since July, 1986. Further as stated earlier the Company is not in a position to issue fresh capital. In view of the same, the preference shares could not be redeemed. However all the preference shares are held by the promoters and their associates only. Non-Compliance of various clauses of the Listing Agreement such as non-intimation of certain events to the stock exchange, publication of certain information, payment of listing fees and maintenance of website. In the absence of a qualified Company Secretary and Compliance Officer certain provisions of the listing agreement could not be complied with However, such non-compliance were technical and the same were not material and had no adverse impact concerning the interest of the shareholders. ACKNOWLEDGEMENT The Board wishes to place on record their appreciations of the whole hearted and sincere co-operation received by the Company during the year from the employees, bankers and various Government authorities at all levels.


Sukhraj A. Singhvi Parasmal M. Jain

Director Director DIN: 00246136 DIN: 00486508

Place: Adipur-Kutch Date: 25th August 2015

Registered Office: Spinning Mill Building P.O.: Adipur (Kutch) – 370 205. Gujarat State

ANNEXURES TO BOARD’S REPORT

ANNEXURE-A Extract of Annual Return ANNEXURE-B Company’s Policy on Director’s Appointment by Nomination and Remuneration Committee ANNEXURE-C Secretarial audit Report in Form MR-3


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ANNEXURE-A

FORM NO. MGT‐9

EXTRACT OF ANNUAL RETURN

as on the financial year ended on 31st March 2015

[Pursuant to Section 92(3) of the Companies Act, 2013 And

Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN

L17110GJ1962PLC001179

ii) Registration Date 21/12/1962 iii) Name of the Company GANDHIDHAM SPINNING AND MANUFACTURING

COMPANY LIMITED iv)

Category Sub-Category of the Company

Limited by shares

v) Address of the Registered office and contact details

SPINNING MILL BUILDING, ADIPUR KUTCH GUJARAT

vi) Whether listed company YES

vii) Name, Address and Contact details of Registrar & Transfer Agent, if any

Not appointed

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities

contributing 10% or more of the total turnover of the company shall be stated)

Sr. No. Name and Description of main products / services

NIC Code of the Product /service

% to total turnover of the company

1 NIL NIL NIL

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES: Not Applicable Sl. No. Name and

Address of the

Company

CIN/GL

N

Holding/Subsidiary

/Associate

% of shares

held

Applicable section

1 NIL NIL NIL NIL NIL

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category‐wise Share Holding


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Category of Shareholders

No. of Shares held at the beginning of the year[As on 01‐April‐2014]

No. of Shares held at the end of the year[As on 31‐March‐2015]

% Changeduringthe year Demat Physical Total % of

Total Shares

Demat Physical Total % of Total Shares

A. Promoters

(1) Indian

a) Individual/ HUF ‐‐ 3311360 3311360 98.82% ‐‐ 3311360 3311360 98.82% 0.00%

b) Central Govt ‐ ‐

c) State Govt(s) ‐ ‐

d) Bodies Corp. ‐ ‐

e) Banks / FI ‐ ‐

f) Any other ‐ ‐

Sub‐total (A) (1) ‐‐ 3311360 3311360 98.82% ‐‐‐ 3311360 3311360 98.82% 0.00%

(2) Foreign

(a) NRIs – Individuals

(b) Other – Individuals

(c) Bodies Corp.

(d) Banks / FI

(e) Any other

Sub‐total (A) (2)

Total shareholding of Promoter (A) = (A)(1) + (A)(2) ‐‐‐ 3311360 3311360 98.82% ‐‐‐ 3311360 3311360 98.82% 0.00%

B. Public Shareholding

1. Institutions

a) Mutual Funds

b) Banks / FI

c) Central Govt

d) State Govt(s)

e) Venture Capital Funds

f) Insurance Companies ‐‐‐ 25357 25357 0.75% ‐‐‐ 25357 25357 0.75% 0.00%

g) FIIs

h) Foreign Venture Capital Funds

i) Others (specify)

i‐i) Foreign Portfolio Investors


Page 16

Category of Shareholders

No. of Shares held at the beginning of the year[As on 01‐April‐2014]

No. of Shares held at the end of the year[As on 31‐March‐2015]

% Changeduringthe year Demat Physical Total % of

Total Shares

Demat Physical Total % of Total Shares

Sub‐total (B)(1):‐ ‐‐‐ 25357 25357 0.75% ‐‐‐‐‐‐ 25357 25357 0.75% 0.00%

2. Non‐Institutions

a) Bodies Corp.

i) Indian

ii) Overseas

b) Individuals

i) Individual shareholders holding nominal share capital uptoRs. 1 lakh ‐‐‐ 14283 14283 0.43% ‐‐‐‐‐ 14283 14283 0.43% 0.00%

ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh

c) Others (specify)

i) Qualified Foreign Investor

ii) Trusts

iii) Non Resident Indians

iv) Clearing Members

v) Foreign Nationals

vi) Overseas Corporate Bodies

Sub‐total (B)(2):‐ ‐‐‐‐ 14283 14283 0.43% ‐‐‐‐ 14283 14283 0.43% 0.00%

Total Public Shareholding (B)=(B)(1)+ (B)(2) ‐‐‐‐ 39640 39640 1.18% ‐‐‐‐ 39640 39640 1.18% 0.00%

C. Shares held by Custodian for GDRs & ADRs

Grand Total (A+B+C) ‐‐ 3351000 3351000 100% ‐‐‐‐‐ 3351000 3351000 100% 0.00%


Page 17

ii) Shareholding of Promoters

SN Shareholder’s Name

Shareholding at the beginning of the year

Shareholding at the end of the year % change in share holding during the year

No. of Shares

% of total Shares of

the company

% of Shares Pledged / encumbered to total shares

No. of Shares


the company

% of Shares Pledged / encumbered to total shares

1. Mr. Parasmal Munilal Jain 828130 24.71 0 828130 24.71 0 ‐

2. Mrs. Kamladevi Parasmal Jain 297750 8.89 0 297750 8.89 0 ‐

3. Mr. Tribhuvan Amarchand Singhvi 281325 8.40 0 281325 8.40 0 ‐

4. Mr. Sukhraj Amarchand Singhvi 282005 8.42 0 282005 8.42 0 ‐

5. Mr. Ramesh Amarchand Singhvi 281325 8.40 0 281325 8.40 0 ‐

6. Mr. Babulal Amarchand Singhvi 281325 8.40 0 281325 8.40 0 ‐

7. Mr. Ashok Amarchand Singhvi 281325 8.40 0 281325 8.40 0 ‐

8. Mr. Sandeep Parasmal Jain 264900 7.91 0 264900 7.91 0 ‐

9. Mr. Pradeep Parasmal Jain 264900 7.91 0 264900 7.91 0 ‐

10. Mr. Arvind Vithaldas Joshi 248375 7.91 0 248375 7.91 0 ‐

Total 3311360 98.82% 0 3311360 98.82% 0 0

iii) Change in Promoters’ Shareholding (please specify, if there is no change)

Sr. No.

Shareholding at the beginningof the year

Cumulative Shareholding during the year

No. of shares

% of totalshares of the company

No. of shares % of totalshares of the company

1. At the beginning of the year

There is no change in Promoters’ Shareholding between 01.04.2014 to 31.03.2015

2. Date wise Increase / Decrease in PromotersShareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc.):

3. At the end of the year

iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)

Sr.No

Name of the Shareholder Shareholding at the beginning of the year

Change in Shareholding (No of shares)

Shareholding at the end of the year


Page 18

No. of Shares


the company

Increase Decrease No. of Shares


the company

1. Oriental Fire & General Ins. Co. Ltd 24857 0.74 % ‐‐ ‐‐ 24857 0.74 %

2 Hotchand Gopaldas Advani 1000 0.029% ‐‐ ‐‐ 1000 0.029%

3 AshamatiBabubhaiChinai 500 0.014% ‐‐ ‐‐ 500 0.014%

4 Gordhandas Jadavji Ruparel 500 0.014% ‐‐ ‐‐ 500 0.014%

5 Hans B. Khimji Arjan Khimji & Co. 500 0.014% ‐‐ ‐‐ 500 0.014%

6 Hassand Rochaldas Gajwani 500 0.014% ‐‐ ‐‐ 500 0.014%

7 JasbhaiGulabShankar Vaidya 500 0.014% ‐‐ ‐‐ 500 0.014%

8 Kamal L. Chellaram 500 0.014% ‐‐ ‐‐ 500 0.014%

9 Ram Gopal Abbhi 500 0.014% ‐‐ ‐‐ 500 0.014%

10 Ratanshi Morarji Khatau 500 0.014% ‐‐ ‐‐ 500 0.014%

11 United Commercial Bank 500 0.014% ‐‐ ‐‐ 500 0.014%

v) Shareholding of Directors and Key Managerial Personnel

Sr. No.

Name Shareholding Date Increase / (Decrease)

Reason Cumulative Shareholding during the year (01.04.2014 to

31.03.2015)

No. of shares at

the beginning

(01.04.2014) / end of the

year (31.03.2015)

% of total shares of

the Company

No. of shares

% of total shares of the Company

1 Mr. Parasmal Munilal Jain 828130 24.71 ‐ ‐ ‐ 828130 24.71

2 Mrs. Kamladevi Parasmal Jain 297750 8.89

‐ ‐ ‐297750 8.89

3 Mr. Sandeep Parasmal Jain 264900 7.91 ‐ ‐ ‐ 264900 7.91

4 Mr. Sukhraj Amarchand Singhvi 282005 8.42

‐ ‐ ‐282005 8.42

V. INDEBTENESS: Indebtedness of the Company including interest outstanding/accrued but not due for payment.

Secured Loans excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii) ‐ ‐ ‐ ‐


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Change in Indebtedness during the financial year

Addition ‐ 710000 ‐ 710000

Reduction

Net Change ‐ 710000 ‐ 710000

Indebtedness at the end of the financial year

i) Principal Amount 710000 710000

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii) ‐ 710000 ‐ 710000

VI. REMUNERATION OF THE DRIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole‐time Directors and/or Manager: NIL

Sl. No.

Particulars of Remuneration Name of MD/WTD/ Manager Total Amount

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income‐tax Act, 1961

(b) Value of perquisites u/s 17(2) Income‐tax Act, 1961

(c) Profits in lieu of salary under section 17(3) Income‐ tax Act, 1961

2 Stock Option

3 Sweat Equity

4 Commission ‐ as % of profit ‐ others, specify…

5 Others, please specify

Total (A)

Ceiling as per the Act

B. Remuneration to other directors: NIL

Sl. No.

Particulars of Remuneration Name of Directors Total Amount

1 Independent Directors

Fee for attending board committee meetings

Commission

Others, please specify

Total (1)

2 Other Non‐Executive Directors

Fee for attending board committee meetings

Commission

Others, please specify


Page 20

Total (2)

Total (B)=(1+2)

Total Managerial Remuneration

Overall Ceiling as per the Act

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD: NIL

Sl. No.

Particulars of Remuneration Key Managerial Personnel

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income‐tax Act, 1961

(b) Value of perquisites u/s 17(2) Income‐tax Act, 1961

(c) Profits in lieu of salary under section 17(3) Income‐tax Act, 1961

2 Stock Option

3 Sweat Equity

4 Commission

‐ as % of profit

others, specify…

5 Others, please specify

Total

VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCE (Under the Companies Act, 2013) No penalties/punishment/compounding of offences were levied under the Companies Act, 2013.


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ANNEXURE - B

NOMINATION AND REMUNERATION POLICY

1. INTRODUCTION: This policy has been formulated by the Nomination & Remuneration Committee and approved & adopted by the Board of Directors 2. OBJECTIVE OF THE COMMITTEE: The Committee shall:

2.1 Formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy relating to the remuneration of Directors, key managerial personnel and other employees.

2.2 Formulate of criteria for evaluation of Independent Director and the Board.

2.3 Devise a policy on Board diversity.

2.4 Identify persons who are qualified to become Director and persons who may be appointed in Key Managerial and Senior Management positions in accordance with the criteria laid down in this policy.

2.5 Recommend to the Board, appointment and removal of Director, KMP and Senior Management Personnel.

3. DEFINITIONS: 3.1 Board means Board of Directors of the Company.

3.2 Director means Directors of the Company.

3.3 Committee means Nomination and Remuneration Committee of the Company as constituted or reconstituted by the Board, from time to time.

3.4 Company means Gandhidham Spinning And Manufacturing Company Limited 3.5 Independent Director means Independent Director as provided under clause 49 of the Listing

Agreement and/or under section 149 of the Companies Act, 2013.

3.6 Key Managerial Personnel means Key Managerial Personnel as defined under Section 2(51) of the Companies Act, 2013.

3.7 Senior Management The expression ‘‘Senior Management’’ means personnel of the company who are members of its core management team excluding Board of Directors comprising all members of management one level below the executive directors, including the functional heads.

4. GENERAL APPOINTMENT CRITERIA: 4.1 The Committee shall consider the ethical standards of integrity and probity, qualification, expertise and

experience of the person for appointment as Director, KMP or at Senior Management level and accordingly recommend to the Board his / her appointment.


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4.2 The Company should ensure that the person so appointed as Director/ Independent Director/ KMP/ Senior Management Personnel shall not be disqualified under the Companies Act, 2013, rules made thereunder, Listing Agreement or any other enactment for the time being in force.

4.3 The Director/ Independent Director/ KMP/ Senior Management Personnel shall be appointed as per the procedure laid down under the provisions of the Companies Act, 2013, rules made thereunder, Listing Agreement or any other enactment for the time being in force.

5. ADDITIONAL CRITERIA FOR APPOINTMENT OF INDEPENDENT DIRECTORS:

The appointment of Independent director shall be governed as per the provisions of clause 49 of the Listing Agreement (as amended from time to time) and the Companies Act, 2013.

6. TERM / TENURE: The Term / Tenure of the Directors shall be governed as per provisions of the Companies Act, 2013 and rules made thereunder as amended from time to time, and as per the Listing Agreement.

7. REMOVAL: Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made thereunder or under any other applicable Act, rules and regulations or any other reasonable ground, the Committee may recommend to the Board for removal of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and regulations. 8. CRITERIA FOR EVALUATION OF INDEPENDENT DIRECTOR AND THE BOARD: Following are the Criteria for evaluation of performance of executive directors, non-executive directors (including Independent Directors) and the Board (including Committees):

8.1 Executive Directors: The Executive Directors shall be evaluated on the basis of performance of the Company, targets/Criteria as may be given to executive Directors by the board from time to time.

The Independent Directors shall take the views of the executive directors and non-executive directors to review the performance of the Chairman of the Company.

8.2 Non -Executive Directors (including Independent Directors): The Non-Executive Directors (including Independent Directors) shall be evaluated on the basis of the following criteria i.e. whether they:

a. act objectively and constructively while exercising their duties; b. exercise their responsibilities in a bona fide manner in the interest of the Company and various

stakeholders; c. devote sufficient time and attention to their professional obligations for informed and balanced decision

making; d. do not abuse their position to the detriment of the Company or its Shareholders or for the purpose of

gaining direct or indirect personal advantage or advantage for any associated person; e. refrain from any action that would lead to loss of his independence (in case of independent director). f. inform the Board immediately when they lose their independence (in case of independent director).


Page 23

g. assist the company in implementing the best corporate governance practices. h. strive to attend all meetings of the Board of Directors and the Committees; i. participate constructively and actively in the committees of the Board in which they are chairpersons or

members; j. strive to attend the general meetings of the Company k. keep themselves well informed about the Company and the external environment in which it operates; l. moderate and arbitrate in the interest of the company as a whole, in situations of conflict between

management and shareholder’s interest. m. abide by Company’s Memorandum and Articles of Association, Company’s policies and procedures

including code of conduct, insider trading guidelines etc. n. provide various directions in the best interest of the Company on key issues. Apart from aforesaid criteria, the Non-Executive Directors (including Independent Directors) shall be evaluated on any other criteria as the Board/Committee/Independent Directors as they deemed proper from time to time. 8.3 Board (Including Various Committees):

The Board (including various committees) shall be evaluated on the basis of the following criteria i.e. whether: a. the Board Ensure the integrity of financial information and robustness of financial and other controls. b. the Board oversees the management of risk and review the effectiveness of risk management process. c. the Board of directors works as a team. d. the Board is robust in taking and sticking to decisions. e. the Board as a whole up to date with latest developments in the regulatory environment and the market. f. sufficient board and committee meetings, of appropriate length, being held to enable proper

consideration of issues. g. the relationships and communications with shareholders are well managed. h. the relationships and communications within the board constructive. i. all directors are allowed or encouraged to participate fully in board discussions. j. the board take the Initiative to maintain moral value of the Company.

k. the board contribute to enhance overall brand image of the Company. Apart from aforesaid criteria, the Board (including Committees) shall be evaluated on any other criteria as the Board/Committee/Independent Directors as they deemed proper from time to time. 9. POLICY ON BOARD DIVERSITY:

The appointment of director(s) on the Board should be based on merit that complements and expands the skills, experience and expertise of the Board as a whole, taking into account gender, age, professional


Page 24

experience and qualifications, educational background, and any other factors that the Board might consider relevant and applicable from time to time towards achieving a diverse Board.

The Nomination & Remuneration Committee is (among other things) responsible for reviewing the structure, size and composition of the Board and the appointment of new directors of the Company from time to time to ensure that it has a balanced composition of skills, experience and expertise appropriate to the requirements of the business of the Company, with due regard to the benefits of diversity on the Board.

10. REMUNERATION:

10.1 The Committee will recommend the remuneration if any to be paid to the Managing Director, Whole-time Director, KMP and Senior Management Personnel to the Board for their approval.

The level and composition of remuneration so determined by the Committee shall be reasonable and sufficient to attract, retain and motivate directors, Key Managerial Personnel and Senior Management of the quality required to run the company successfully. The relationship of remuneration to performance should be clear and meet appropriate performance benchmarks. The remuneration should also involve a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

10.2 Director/ Managing Director

Besides the above Criteria, the Remuneration/ compensation/ commission etc. to be paid to Director/ Managing Director etc. shall be governed as per provisions of the Companies Act, 2013 and rules made thereunder as may be amended from time to time or any other enactment for the time being in force.

10.3 Non executive Independent Directors

The Non- Executive Independent Director may receive remuneration by way of sitting fees as decided by the Board from time to time for attending meetings of Board or Committee thereof; Provided that the amount of such fees shall not exceed the ceiling/ limits as provided under Companies Act, 2013 and rules made thereunder as may be amended from time to time or any other enactment for the time being in force;

10.4 KMPs / Senior Management Personnel etc.

The Remuneration to be paid to KMPs/ Senior Management Personnel shall be based on the experience, qualification and expertise of the related personnel and governed by the limits, if any prescribed under the Companies Act, 2013 and rules made thereunder as may be amended from time to time or any other enactment for the time being in force.

10.5 Other employees:

Without prejudice to what is stated in para 10.1 to 10.4, the remuneration to be paid to the other employees shall be decided by the management of the Company based on the experience, qualification, expertise of the employees or any other criteria as may be decided by the Management.

11. SUCCESSION PLANNING

The Nomination & Remuneration Committee shall work with the Board on the leadership succession plan, and shall also prepare contingency plans for succession in case of any exigencies.


Page 25

ANNEXURE - C

SECRETARIAL AUDIT REPORT For the financial year ended 31st March, 2015

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To The Members Gandhidham Spinning and Manufacturing Company Limited Spinning Mill Building, Adipur, Kutch – 370205, Gujarat We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to corporate practices by Gandhidham Spinning And Manufacturing Company Limited (hereinafter called ‘the Company’) for the audit period covering the financial year ended on 31st March, 2015. Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon. Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit; we hereby report that in our opinion, the Company has, during the audit period generally complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter. We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2015 according to the provisions of: (i) The Companies Act, 2013 (‘the Act’) and the Rules made thereunder; (ii) The following Regulations and Guidelines, to the extent applicable, prescribed under the

Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;

We have also examined compliance with the applicable clauses of the Listing Agreements entered into by the Company with the Stock Exchanges. During the period under review, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, etc. mentioned above except the followings:- 1. The Company has not maintained minimum public shareholding as required under the

Securities Contracts (Regulation) Act, 1956 (SCRA) and the Rules made thereunder;

2. The Company has not provided the demat facility to its shareholders as required under the Depositories Act, 1996 and the Regulations and Bye-laws frame thereunder;


Page 26

3. The Company has not appointed the Registrars and Share Transfer Agents as required under the Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

4. The Company has not appointed Company Secretary as required under the provisions of section 203 of Companies Act, 2013;

5. The Annual General Meeting (AGM) of the Company was held on 19th September, 2014 for the financial year ended 31st March 2014; however the members of the Company were not provided e-voting facility to vote on all the resolutions passed at the said AGM;

6. The Company is required to maintain minimum public shareholding as per Clause 40 of Listing Agreement read with Rule 19(2) and Rule 19A of the Securities Contracts (Regulation) Rules, 1957;

7. The Company has not redeemed 200000, 9.5% Redeemable Cumulative Preference Shares as required under the Companies Act, 2013.

8. Non-Compliance of various clauses of the Listing Agreement such as non-intimation of certain events to the stock exchange, publication of certain information, payment of listing fees and maintenance of website.

During the period under review, provisions of the following regulations were not applicable to the Company: (i) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to

the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

(ii) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

(iii) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines, 1999 and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;

(iv) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(v) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;

(vi) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998

(vii) Secretarial Standards issued by The Institute of Company Secretaries of India related to meetings and minute (since not approved by the Central Government)

We further report that - The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.


Page 27

Adequate notice is given to all Directors to schedule the Board meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Decisions at the meetings of the Board of Directors of the Company were carried through on the basis of majority. There were no dissenting views by any member of the Board of Directors during the period under review. We further report that – There are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. We further report that during the audit period, the Company has obtained approval of members by way of special resolution to authorize the Board of Directors to borrow money in excess of the aggregate of the paid up share capital and free reserves of the Company, but not exceeding a sum of Rs. 50 crores.

For Ratan Kapadia and Associates

Company Secretaries

Ratan Kapadia FCS 1395 / CP No.957

Place: Mumbai Date: 25th August 2015


Page 28

INDEPENDENT AUDITOR’S REPORT

To, The Members, Gandhidham Spinning and Manufacturing Co. Ltd., Adipur - Kutch REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of Gandhidham Spinning and Manufacturing Co. Ltd (“the Company”), which comprise the Balance Sheet as at 31st March, 2015, and the Statement of Profit and Loss, cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information. MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS The Management and Board of Directors of the Company are responsible for the matter stated in Section 134(5) of the Companies Act 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting principles generally accepted in india, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. AUDITOR’S RESPONSIBILITY Our responsibility is to express an opinion on these financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation and fair presentation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls, An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s management, as Board of Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.


Page 29

OPINION The Manufacturing operations of the company have been stopped with effect from 25.07.1986 with a view to prevent further losses. The accounts of the Company for the year ended 31st March 2015 have been prepared on the “GOING CONCERN” basis, which is dependent upon the availability of continuing finance and the Company’s future performance. In this connection, attention is drawn to para 7 of directors report. In our opinion and to the best of our information and according to the explanations given to us, the financial statements subject to note no. 19(a) about the non-redemption of 200000, 9.5% Redeemable Cumulative Preference Shares of Rs.10 each due for redemption on 31.12.1990 (see note No. 19(a) of the notes to the accounts) and note no. 20(a) and 20(b) about amount of Rs. 26,32,586.00 (net) due from M/s. Sabnani Export Pvt. Ltd. & Asha Fabrics Rs.8,71,940.00 since had these been provided the loss would have been increased by Rs.35,04,526.00 and debtors would have been reduced by an equal amount and total Loss would have been Rs. 3,02,92,031.18, instead of Rs. 2,67,87,505.18 (see note No. 20(a) and 20(b) of the notes to the accounts) read together with notes appearing in schedule of significant accounting policies and notes to accounts give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015; and

(b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; (c) in the case of the Cash flow statement, of the cash flows of the company for the year ended

on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS 1. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”) issued by the

Central Government of India in terms of sub-section (11)of section 143 of the Companies Act 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit ;

b. In our opinion proper books of account as required by law have been kept by the Company

so far as appears from our examination of those books;

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. On the basis of the written representations received from the directors as on 31st March, 2015, and taken on record by the Board of Director, non of the directors is disqualified as on 31st March, 2015 from being appointed as director in terms of Section 164 (2) of the Act;

f. In our opinion, and to the best of our information and according to explanations given to us, We Report as under with respect to the matters to be included in the Auditor’s Report in accordance with Rule 11 for the Companies (Audit and Auditors) Rules, 2014:


Page 30

i. The Company has disclosed the impact of pending litigation on its financial position in

its financial Statements as of March 31, 2015. ii. The Company did not have any long-term contract during the year under report to

transfer any sums to the investor education and protection fund; as such the question of delay in transferring such sums does not arise.

iii. There has not been an occasion in case of the Company during the year under report to

transfer any sums to the Investor Education and Protection Fund; as such the question of delay in transferring such sums does not arise.

For Khimji Kunverji & Co. (Gandhidham) Chartered Accountants

(Registration No: 105147W)

` (Padamshi L. Shah) Partner

Membership No. 5136

Place: Gandhidham – Kutch Date: 25th August, 2015


Page 31

Annexure to the Independent Auditors Report for the year ended on 31st March 2015

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that: -

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) The fixed assets have not been physically verified by management during the year. We are unable to express our opinion about the discrepancies, if any compared to the book records.

(ii) In our opinion and according to the information & explanations given to us, as there is no inventory as on Balance sheet date, the requirement of clause (ii) of paragraph 3 of the said Order is not applicable to the Company

(iii) The Company has not granted any loans secured or unsecured to Companies,

firms or other parties listed in the register maintained under section 189 of The Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), and(iii)(b) of the Companies (Auditors Report) Order 2015 are not applicable to the company.

(iv) In our opinion and according to the information and explanation given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regards to purchase of inventory and fixed assets and with regards to sale of goods and service further, on the basis of our examination of the books and records of the Company, and according to the information and explanation give to us, no major weakness has been noticed and reported.

(v) In our opinion and according to the information and explanation given to us, the Company has not accepted any deposit from the public within the meaning of section 73 to 76 or any other relevant provision of the act and the rules framed there under.

(vi) As informed to us, the central Government has not prescribed maintenance of Cost records under section 148(1) of the Companies act, 2013.

(vii) (a) According to the information and explanation given to us, and based on the

records of the company examined by us, the company is regular in depositing undisputed statutory dues including Provident fund, Employee’s State Insurance, Income tax, Wealth Tax, Excise Duty, Custom Duty, Sales Tax, Cess and other material dues, and applicable with the appropriate authorities during the year.

(b) According to the information and explanation given to us, the dues in respect

of Income tax, Wealth Tax, Service Tax, Excise Duty, Customs Duty, Sales Tax & Value Added tax, Cess and other material statutory dues that have not been deposited with the appropriate authorities on account of dispute and the forum where the disputes are pending are given below:


Page 32

No. Name of the Status Nature of the Dues Amount Forum where dispute is pending 1) Sales Tax Act, 1969 Sales Tax 2,26,830 Sale Tax Commissioner (Appeals) 2) Income Tax Act, 1961 Income Tax 6,07,130 CIT Appels, Rajkot

(c.) There has not been as occasion in case of the Company during the year report

to transfer any sums to the Investor Education and Protection Fund; as such the question of delay in transferring such does not arise.

(viii) In our opinion, the accumulated losses of the Company at the end of the Financial

Year are more than fifty percent of its net worth. The Company has incurred cash loss in the financial year ended covered by our audit but no such cash loss were there in the immediately preceding financial year.

(ix) According to the records of the company examined by us and as per the

information and explanations given to us the company has not availed of any loans from any financial institution or bank and has not issued debentures.

(x) In our opinion and according to the information and explanations given to us, the company has not given any guarantee of loans taken by other from banks or financial institutions during the year. Accordingly the provision of clause 3 (x) of the Order are not applicable to the Company.

(xi) In our opinion and according to the information and explanations given to us, the company has not raised any term loans during the year.

(xii) During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the company noticed or reported during the course of our audit we have not been informed of any such instance by the Management.

For and Behalf of

For Khimji Kunverji & Co. (Gandhidham) Chartered Accountants

(Registration No: 105147W)

(Padamshi L. Shah) Partner

Membership No. 5136 Place: Gandhidham – Kutch Date: 25th August, 2015


Page 33

BALANCE SHEET AS AT 31st MARCH 2015 (Amount in Rupees)

NOTE AS AT AS AT

No. 31st March 2015 31st March 2014

EQUITY & LIABILITIES

SHAREHOLDER’S FUNDS a) Share Capital 1 35498710.00 35498710.00b) Reserve & Surplus 2 (26787505.18) (25781001.96)

8711204.82 9717708.04NON-CURRENT LIABILITIES

a) Long Term Liabilities 3 710000.00 0.00b) Long Term Provision 4 213444.00 213444.00

923444.00 213444.00CURRENT LIABILITIES

a) Other Current Liabilities 5 1093264.00 896867.50b) Short Term Provisions 6 142500.00 443288.00

1235764.00 1340155.50 TOTAL FUNDS EMPLOYED 10870412.82 11271307.54 ASSETS

NON-CURRENT ASSETS a) Fixed Assets 16

(i) Tangible Assets 6473879.95 3817207.67b) Non-current investments 7 0.00 1900000.00c) Other Non-current assets 8 15000.00 15000.00

6488879.95 5732207.67CURRENT ASSETS

a) Trade Receivables 9 4307336.00 4307336.00b) Cash and Bank Balances 10 59094.87 973210.87c) Other Current Assets 11 15102.00 258553.00

4381532.87 5539099.87

TOTAL FUNDS UTILISED 10870412..82 11271307.54 Notes forming part of the Financial Statement 1 to 21

As per our report of even date For Khimji Kunverji & Co. (Gandhidham) For & on behalf of the Board Chartered Accountants (Registration No.: 105147W) (Padamshi L. Shah) Sukhraj A. Singhvi Parasmal M. Jain Partner Director Director Membership No. 5136

Place: Adipur – Kutch Date: 25th August, 2015


Page 34

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH 2015 (Amount in Rupees)

NOTE YEAR ENDED YEAR ENDED No. 31st March 2015 31st March 2015 INCOMES

a) Other Incomes 12 131053.00 2416015.00

Total Revenue 131053.00 2416015.00 EXPENDITURE

a) Employee Benefit Expenses 13 165812.00 24000.00b) Depreciation & Amortization Exp. 14 126205.72 191872.00c) Other Expenses 15 675892.50 1670811.29

Total Expenses 967910.22 1886683.29 PROFIT/(LOSS) BEFORE TAX (836857.22) 529331.71 Tax expense:

a) Current Tax 0.00 443288.00b) Short/Excess Provision for Tax of

earlier years 25278.00 43646.71.00

c) Deferred Tax 0.00 0.00 25278.00 486934.71 PROFIT/(LOSS) FOR THE PERIOD (862135.22) 42397.00 Notes forming part of the Financial Statement 1 to 21

As per our report of even date For Khimji Kunverji & Co. (Gandhidham) For & on behalf of the Board Chartered Accountants (Registration No.: 105147W) (Padamshi L. Shah) Sukhraj A. Singhvi Parasmal M. Jain Partner Director Director Membership No. 5136 Place: Adipur – Kutch Date: 25th August, 2015


Page 35

Notes forming part of the Financial Statement for the year ended 31st March 2015 (Amount in Rupees) AS AT

31.03.2015 AS AT

31.03.2014 Note 1: Share Capital Authorized :

250000, 9.5% Redeemable Cumulative Preference Shares of Rs. 10/- each

2500000.00 2500000.00

4451000, Equity Share of Rs. 10/- each

44510000.00 44510000.00

299000, Unclassified Shares of Rs. 10/- each

2990000.00 2990000.00

50000000.00 50000000.00

Issued, Subscribed & Paid-up

200000, 9.5% Redeemable Cumulative Preference Share of Rs. 10/- each. Redeemable at par on 31.12.1990

2000000.00 2000000.00

3351000 Equity Share of Rs. 10/- each

33510000.00 33510000.00

35510000.00 35510000.00Less: Allotment money in Arrears on Equity Shares (11290.00) (11290.00)

35498710.00

35498710.00

i) Details of Shareholders holding more than 5% of total

Shareholdings

Name of the Shareholder No. of Shares % of Total Held Holding a) Mr. Parasmal Munilal Jain 828130 24.71 b) Mrs. Kamladevi Parasmal Jain 297750 8.89 c) Mr. Tribhuvan Amarchand Singhvi 281325 8.40 d) Mr. Sukhraj Amarchand Singhvi 282005 8.42 e) Mr. Ramesh Amarchand Singhvi 281325 8.40 f) Mr. Babulal Amarchand Singhvi 281325 8.40 g) Mr. Ashok Amarchand Singhvi 281325 8.40 h) Mr. Sandeep Parasmal Jain 264900 7.91 i) Mr. Pradeep Parasmal Jain 264900 7.91 j) Mr. Arvind Vithaldas Joshi 248375 7.41 ii) Reconciliation of the number of shares outstanding at the beginning and the end of the

reporting period Total number of Shares at the beginning of the period 3551000.00 3551000.00 Add/less :- Adjustments during the year 0.00 0.00 Total number of Shares at the end of the period 3551000.00 3551000.00


Page 36

Note 2 : Reserves & Surplus Profit & Loss Account Balance as per last year (25823398.96) (25823398.96) Addition during the year (862135.22) 42397.00 Adjustment for Depreciation Balance carried forward (144368.00) 0.00 Balance carried forward

(26787505.18)

(25781001.96)

Note 3: Long Term Borrowing

a) Loan from Directors and Shareholders 710000.00 0.00

710000.00 0.00

Note 4: Long Term Provision a) Gratuity Payable 213444.00 213444.00

213444.00 213444.00

Note 5: Other Current Liabilities a) Creditors for Expenses 67904.50 244958.50 b) Acceptances 828141.00 1248048.00 c) Statutory Liabilities 4133.00 822.00 d) Deposit for Directorship Candidature 200000.00 0.00

1093264.00 896867.50

Note 6: Short Term Provisions Provision for Secretarial Audit 142500.00 0.00 Provision for tax 0.00 443288.00

142500.00 443288.00

Note 7: Non-Current Investments Fixed Deposit with SBI 0.00 1900000.00

0.00 1900000.00

Note 8: Other Non-Current Assets GEB Security Deposit 15000.00 15000.00

15000.00 15000.00

Note 9: Trade Receivables (unsecured, considered good except otherwise stated) a) Due for Period exceeding six months 4307336.00 4307336.00b) Others 0.00 0.00

4307336.00

4307336.00

Note 10: Cash and Bank Balances a) Balances with Scheduled Banks in Current Accounts 30833.76 598132.76b) Balance with other Banks 1125.71 1125.71


Page 37

c) Cash on hand 27135.40 373952.40

59094.87

973210.87

Note 11: Other Current Assets a) Advance Recoverable in cash or in kind or for the value to be

received 2000.00 43040.00

Balance with Revenue Authorities 13102.00 215513.00

15102.00

258553.00

Note 12: Other Income a) Leave & License Rent 0.00 2242296.00b) Sundry credit balance written off 0.00 128118.00c) Interest on fixed deposits 131050.00 45601.00d) Interest on IT Refund 3.00 0.00

131053.00

2416015.00

Note 13: Employee Benefit Expenses a) Salary expenses 165812.00 24000.00

165812.00 24000.00

Note 14: Other Expenses Advertisement expenses 4405.00 3950.00 Auditor’s Remuneration 28500.00 28090.00 Bank Charges 2979.00 204.00 Electricity Charges 20682.00 23154.00 Legal & Professional Fees & Charges 211499.50 82791.00 Insurance Expense 21500.00 25281.00 Interest on Service Tax 1785.00 5476.00 Interest on TDS 969.00 3321.00 Rent, Rates & Taxes 0.00 176180.00 Fees & Subscription 0.00 21069.00 Printing & stationery Expenses 12290.00 11100.00 Security Charges 306780.00 249240.29 Misc. Expenses 12870.00 15055.00 Repair & Maintenance 50885.00 1025900.00 Balance Written of 748.00 0.00

675892.50

1670811.29

As per our report of even date For Khimji Kunverji & Co. (Gandhidham) For & on behalf of the Board Chartered Accountants (Registration No.: 105147W)

(Padamshi L. Shah) Sukhraj A.Singhvi Parasmal M. Jain Partner Director Director Membership No. 5136



Page 38

Note 15: FIXED ASSETS AS AT 31.03.2015 SR. GROSS BLOCK DEP.BLOCK NET BLOCK

NO PARTICULARS AS ON AS ON AS ON FOR THE AS ON

31.03.14 ADDITION

DEDUCTION 31.03.15 31.03.14 YEAR DEDUCTION 31.03.14 31.03.15 31.03.14

1 Freehold Land 1143266.00 0.00 0.00 1143266.00 0.00 0.00 0.00 0.00 1143266.00 1143266.00

2 Building 5718892.10 2927246.00 0.00 8646138.10 3065954.00 267435.19 0.00 3333389.19 2652938.10 2652938.10

3 Electrical installation 10380.00 0.00 0.00 10380.00 3958.43 1699.08 0.00 5657.51 4722.49 6421.57

4 Furniture 14950 0.00 0.00 14950.00 368.00 1439.45 0.00 1807.45 13142.55 14582.00

TOTAL RS. 6887488.10 2927246.00 0.00 9814734.10 3070280.43 270573.72 0.00 3340854.15 6473879.95 3817207.67

PREVIOUS YEAR 6872538.10 14950.00 0.00 6887488.10 2878408.43 191872.00 0.00 3070280.43 3817207.67 3994129.67

Note: Out of Depreciation of Rs. 2,67,435.19 from Building, depreciation of Rs. 1,44,368 is on account of Building whose useful life is already exhausted on April 01, 2014 and the same

has been adjusted against Profit & Loss A/c (Reserve & Surplus) pursuant to adoption of estimated useful life of fixed assets as stipulated by Schedule II of Companies Act, 2013.

As per our report of even date For Khimji Kunverji & Co. (Gandhidham) For & on behalf of the Board Chartered Accountants (Registration No. 105147W)

(Padamshi L. Shah) Sukhraj A. Singhvi Parasmal M. Jain Partner Director Director Membership No. 5136 Place: Adipur – Kutch Date: 25th August, 2015


Page 39

Note 16: Significant Accounting Policies (A) General:

The financial statements have been prepared to comply in all material respects with the notified accounting standards by companies (Accounting standards) Rules, 2006 (as amended). The financial statement has been prepared under the historical cost convention on an accrual basis. The accounts of the company have been prepared on a going concern basis, which in view of the losses incurred are dependent upon revival, future profitability and availability of continued finance. The Accounting policies in all material respects have been consistently applied by the company and are consistent with those used in the previous year.

(B) Revenue and Expenditure Recognition:

Revenue is recognized and expenditure is accounted for on accrual basis. Interest income on fixed deposit is booked on the basis of TDS certificate received from bank.

(C) Fixed Assets:

Tangible assets are stated at cost less depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. There are no intangible assets as defined by AS-26 intangible assets

(D) Depreciation:

Depreciation on fixed assets is provided to the extent of depreciable amount on straight line method (SLM) based on useful life of the assets as prescribed in schedule II to the Companies Act, 2013 accordingly the unamortized carrying value is being depreciated / amortized over the revised / remaining useful lives. The written down value of fixed assets whose lives have expired as at 1st April 2014 have been adjusted in the opening balance of profit and Loss Account amounting to Rs 144368/-.

(E) Investments:

Investments that are readily realizable and intended to be held for not more than a year is classified as current investments. All other investments are classified as long term investments. Long term investments are valued at cost. Provision for diminution in the value of Long term investments is made only if such a decline in other then temporary. Current investments are carried at lower of cost and quoted / fair / market value.

(F) Retirement Benefits:

Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

(G) Taxes on Income:

Provision for current tax is made after taking into consideration benefits admissible under the provision of The Income Tax Act, 1961. No provision for deferred taxes is recognized since the management is of the opinion that the timing difference arising out of assets and liabilities is negligible.

(H) Impairment Losses: An assets is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to profit and loss account in which an asset identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. However no provision for


Page 40

impairment loss on plant and machinery and other assets is made as management is of the opinion that recoverable amount of such assets is more than its depreciated value.

(I) No confirmation of balance have been obtained from debtors, creditors, loans & advances given / Advance & Deposit taken or accepted as such these are subject to confirmation.

(J) Under the head ‘Current Liabilities and Provision’ no separate disclosure is made for

outstanding amount due to small Scale industrial undertaking(s) SSI as the status of the creditors could not be ascertained. Accordingly name(s) of SSI to whom the company owes a sum exceeding Rs. 1 Lac outstanding for more than thirty days is not disclosed as also, amount overdue on accounts of principal and/or interest to such undertaking could not be ascertained.

(K) In the opinion of the board current assets, Loans & Advances are approximately of the value stated of realized in the ordinary course of business. The provision for depreciation and all known liabilities is adequate and is not in excess of the amount reasonably necessary.

(L) Comparative figures of previous year have been reclassified wherever necessary to confirm

this year classification. (M) The credit balance lying in Current account with Jai Hind Co-operative Bank Limited,

Mumbai & Gandhidham Co-operative Bank, Adipur are not confirmed and thus they are subject to confirmation.

Note 17: Earnings per Share (EPS) (AS-20) Basic earnings per share are calculated by dividing the net profit or loss for the period

attributable to Equity shareholders by the weighted average number of equity shares outstanding during the period.

Earnings per Share (EPS) (AS-20) [In Rupees] F.Y 2014-15 F.Y 2013-14 Net Profit/ (Loss) After Current Tax & Deferred Tax (862135.22) 42397.00 Weighted Average Number of Equity 3351000.00 3351000.00 Shares of Rs. 10/- each EPS (Rs.) – Basic & Diluted -0.26 0.01 Note 18: Related Party Disclosures

The management has identified the following Companies, Firms & Individuals as related parties of the company for the year ended on 31st march, 2014 for the purposes of reporting as per AS-18 related party transaction.

Name of the Party Nature of Relation 1 Mr. Sukharaj A. Singhvi Key Management Personal 2 Mr. Parasmal M. Jain Key Management Personal 3 Mr. Pradip P. Jain Key Management Personal 4 Mr. Haresh K. Notani Key Management Personal 5 Mrs. Kamladevi P. Jain Key Management Personal

Details of Transaction with Related Parties as per AS-18 Related Party Transaction.

Sr No. Particulars Loans Accepted Deposit taken Loans repaid

1 Mr. Parasmal M Jain 710,000.00 200,000.00 0.00

2 Mrs. Kamladevi P. Jain 0.00 0.00 530,000.00

3 Mr. Sukhraj A. Singhvi 0.00 0.00 2,400,000.00


Page 41

Note 19: Provisions, Contingent Liabilities and Contingent Assets Disclosure as requirement by AS-29 Provision, Contingent Liabilities and contingent Assets

No. PARTICULAR Current Year Previous Year

(a)

The Acquirers have acquired 200000, 9.5% redeemable Cumulative Preference Shares, redeemable on 31.12.1990, But Still these are not redeemed and period of redemption is also not extended.

(b) Other Money for which the Company is contingently liable (i) Arrears of preference dividend subject to deduction of tax.

8593540.00

8403540.00

(c) Contingent Liabilities not provided for:

1 Suits by Creditors Amount Unascertained

Amount Unascertained

2. Claims of Ex-Chief Executive contested 60946.00 60946.00

3. Claims of Gandhidham Municipality for Municipal Taxes-Disputed

Amount Unascertained

Amount unascertained

4 Claim of Sales Tax- Disputed at Sales Tax Commissioner (Appeals)

226830.00 226830.00

5 Claim of Income Tax For A.Y 2011-12 –Disputed at CIT Appeals - Rajkot

607130.00 0.00

Note 20: Information of Litigations a) Suits filed in the High Court of Bombay by the company and S.R.C. Ltd. on 02.05.86 for

recovery of amount of Rs.3435396.00 from M/s. Sabnani Export Pvt. Ltd. The High Court has appointed a retired Judge of High Court as sole arbitrator. Appeal of M/s. Sabnani Export against this Order has been rejected by the High Court.

b) An amount of Rs. 871940.00 is due from M/s. Asha fabrics and against that an amount of Rs.802810.00 has been received in the name of M/s. Sabnani Export Pvt. Ltd. In absence of any confirmation about adjustment of the said balances & amount of Rs. 871940.00 is shown as Debtor and Rs.802810.00 as Liability.

Note 21: Detail of Auditors Remuneration Detail of Payments to auditors F.Y 2014-15 F.Y 2013-14 Audit Fees 20000.00 20000.00 Other capacity 5000.00 5000.00 Other capacity 3500.00 3090.00

28500.00

28090.00

As per our report of even date For Khimji Kunverji & Co. (Gandhidham) For & on behalf of the Board Chartered Accountants (Registration No: 105147W) (Padamshi L. Shah) Sukhraj A. Singhvi Parasmal M. Jain Partner Director Director Membership No. 5136



Page 42

ANNEXURE FORMING PART OF THE NOTES ATTACHED TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2015

ANNEXURE TO NOTE - 5 Other Current Liabilities

a) Creditors for Expenses Khimji Kunverji & Co. 28500.00SCI International securities Ltd. 30690.00D. Lothari & Associates 1800.00

60990.00

b) Acceptances Sabnani Exports Pvt Ltd. 802810.00Bhadresh Trading Corporation Ltd 25331.00

828141.00

c) Statutory Liabilities TDS Payable 4133.00

4133.00

ANNEXURE TO NOTE - 9 Trade Receivables a)Due for Period exceeding six months Asha Fabrics 871940.00Sabnani Exports Pvt Ltd 3435396.00

4307336.00

ANNEXURE TO NOTE - 10 Cash & Bank Balances a) Balances with Scheduled Banks in Current Account State Bank Of India 30833.76

30833.76

b) Balance With Other Banks In Current A/c. With Jai Hind Co-op Bank Ltd, Mumbai 718.00(Max Balance At Any Time During The Year Rs.718/- Previous Year Rs.718/-)

In Current A/c. With Gandhidham Co-op Bank Ltd, Adipur 407.71(Max Balance At Any Time During The Year Rs.408/- Previous Year Rs.408/-)

1125.71


Page 43

ANNEXURE TO NOTE - 11 Other Current Assets a) Advance recoverable in cash or in kind or for the value to be received Advance 2000.00

2000.00

b) Balance with Revenue Authorities Income Tax Deducted At Source (2014-15) 13102.00

13102.00

As per our report of even date For Khimji Kunverji & Co. (Gandhidham) For & on behalf of the Board Chartered Accountants (Registration No: 105147W)

(Padamshi L. Shah) Sukhraj A. Singhvi Parasmal M. Jain Partner Director Director Membership No. 5136 Place: Adipur – Kutch Date: 25th August, 2015


Page 44

ANNEXURE - II

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE I. REGISTRATION DETAILS Registration No. 1179 State Code 04 31 03 2015 Date Month Year

II CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. THOUSAND)

Public Issue Right Issue NIL NIL Bonus Issue Private placement NIL NIL

III POSITION OF MOBILISATION AND DEPLOYMENT OF FUND(AMOUNT IN RS.THOSUAND)

Total Liabilities Total Assets 10870 10870 Sources of Funds

Paid up Capital Reserves & Surplus 35499 (26787) Secured Loans Unsecured Loans NIL NIL

Non-Current Liability 923

Applications of Funds Net Fixed Assets Other Non Current Assets 6474 15 Net Current Assets Non Current Investments 3146 NIL Accumulated Losses NIL

IV PERFORMANCE OF COMPANY (AMOUNT IN RS. THOUSAND)

Turnover Total Expenditure 131 968 Profit Before Tax Profit After Tax (837) (862) Earnings per share in Rs. Dividend rate % (0.26) NIL

V GENERIC NAMES OF THREE PRINCIPAL PRODUCTS / SERVICES OF COMPANY (AS PER MONETARY TERMS)

Item Code (ITC Code) Product Description NIL NIL

Sukhraj A. Singhvi Parasmal M. Jain

Director Director Place: Adipur – Kutch Date: 25th August, 2015


Page 45

AUDITOR’S CERTIFICATE We have examined the attached Cash Flow Statement of Gandhidham Spinning & Manufacturing Co. Ltd. for the year ended 31st March 2015. The Statement has been prepared by the Company in accordance with the requirements of listing agreement clause 32 with various stock exchanges and is based on and in agreement with the corresponding profit and loss account and balance sheet of the Company covered by our report of even date to the members of the company.

For Khimji Kunverji & Co. (Gandhidham) Chartered Accountants (Registration No: 105147W)


(Padamshi L. Shah) Partner

Membership No. 5136 CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31.03.2015 AS PER THE LISTING AGREEMENT (Amt in Rs.)

S. No. Particulars 2014-15 2013-14 A B C

NET PROFIT/LOSS BEFORE TAX & EXTRA –ORDINARY ITEMS Adjustments for: Add: Depreciation OPERATING LOSS/PROFIT BEFORE WORKING CAPITAL CHANGES Adjustments for: Add: Trade and other receivables Add: Short term provisions Less: Trade Payables

CASH GENERATED FROM OPERATIONS Interest Paid Direct Taxes Paid (TDS) Interest Received Dividend Received NET CASH GENERATED FROM OPERATING ACTIVITIES

Less:- Income tax paid NET CASH GENERATED FORM OPERATING ACTIVITIES CASH FLOW FROM INVESTMENT ACTIVITIES Purchase of Fixed Assets Purchase of Investments Sale of Investments NET CASH GENERATED FROM INVESTMENT ACTIVITIES

CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Long term Borrowings (Net) Repayment of Long term Borrowings (Net) Dividends Paid NET CASH USED IN FINANCING ACTIVITIES

Net Increase /Decrease in Cash & Cash equivalents Cash & Cash equivalents (Opening) Cash & Cash equivalents (Closing)

(836857)

126206

(710652)

243451 142500 196397

(128304)

0 0 0 0

(128304)

(468566)

(596870)

(2927246) 0

1900000 (1027246)

710000 0 0

710000

(914116.00) 973210.87

59094.87

529332

191872

721204

251936

(606499)

366641

0 0 0 0

366641

(1009815)

(643174)

(14950) (1900000)

0 (1914950)

0 (2930000)

0 (2930000) (5488124.00)

6461334.87 973210.87

Place: Adipur – Kutch On behalf of the Board of Directors Date: 25th August, 2015



Page 46

ATTENDANCE SLIP I hereby record my presence at the 52nd ANNUAL GENERAL MEETING of the company at Spinning Mill Building, Adipur-Kutch at 4.00 PM on Wednesday 30th September 2015. Signature of the attending Member / Proxy

Notes: 1. A Member/Proxy holder attending the meeting must bring the Attendance Slip to the meeting

and hand it over at the entrance duly signed. 2. A Member/Proxy holder attending the meeting should bring copy of the Annual Report for

reference at the meeting. ------------------------------------------------------------------------------------------------------------------------

GANDHIDHAM SPINNING & MANUFACTURING COMPANY LTD.

Regd. Office: Spinning Mill Building, ADIPUR – Kutch, Pin 370 205

PROXY

I/We ___________________________________________________________________________ of ____________________________________ in the district of _______________________ being a Member/Members of the above named Company, hereby appoint _________________ ______________________________________________ of _____________________________ in the district of _________________________________________________________________or failing him_________________________________________________ of ___________________ in the district of ____________________________________as my/our Proxy to attend and vote for me/us and on my/our behalf at the FIFTY SECOND ANNUAL GENERAL MEETING of the Company to be held on Wednesday, 30th September 2015 at 4.00 PM and at any adjournment thereof. Signed this _______________ day of _____________________2015 Signature___________________ This form is to be used the resolution. Unless otherwise instructed the proxy will act as he thinks fit. * Stike out whichever is not desired. Notes: 1. The proxy must be returned so as to reach the Registered Office of the Company at Spinning

Mills Building Adipur - Kutch Pin 370 205 not less than FORTY-EIGHT HOURS before the time for holding the aforesaid meeting.

2. A proxy need not be a member of the Company.

Folio No.

No. of Shares

Folio No. No. of Shares

Affix Re.1.00 Revenue Stamp

* in favour of *against

Documents

GANDHIDHAM SPINNING & MANUFACTURING CO. … SPINNING & MANUFACTURING CO. LTD. 52ND ANNUAL REPORT Page 2 N O T I C E Notice is hereby given that the 52nd Annual General Meeting of the