DIRECTORS' REPORT

Your Directors have pleasure in presenting their report on the business and operation of your Company together with the Audited Financial Statements for the year ended March 31, 2016.

DIVIDEND AND RESERVES

Your Directors do not recommend any dividend for the financial year ended March 31, 2016 and no amount has been transferred to General Reserve.

OPERATIONS AND STATE OF COMPANY AFFAIRS

During the year under review your Company's Total Revenue has decreased from Rs. 85196 lacs to Rs. 75474 lacs. The overall decrease in revenue of the Company during the year under review is due to lower realization of cotton yarn, lower orders in garment and fabric divisions which also adversely affected the profitability of the Company while the business of technical textile and consumer product divisions have contributed as per expectation.

Company has earned profit after tax of Rs. 440 lacs after making a provision of Rs. 119 lacs towards recompense liability under CDR guidelines in year under review against profit after tax of Rs. 778 lacs in previous financial year.

Your Company has paid the entire recompense amount to CDR lenders and started the exit process from CDR. The matter is being referred to CDR empowered group for final approval of exit. The CDR exit will provide the better opportunity to grow in future and also shows the healthy financial position of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis, as required under Regulation 34(3) of SEBI (LODR) Regulations, 2015 read with Schedule V of said Regulations, forms part of this Board's report and is annexed as Annexure - 'A'.

DIRECTORS, KEY MANAGERIAL PERSONNEL AND COMMITTEES

During the year under review, there is no change in the Directors and Key Managerial Personnel of the Company and as per provision of Section 152 of the Companies Act, 2013 Shri Shishir Jaipuria, Director, retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment. Sh. Shishir Jaipuria has given his declaration in terms of Section 164(2) of the Companies Act, 2013 to the effect that he is not disqualified from being reappointed as a Director of the Company.

The Independent Directors namely Sh. Joginder Pal Kundra, Dr. Har Prasad Bhattacharya, Shri Jugal Kishore Bhagat, Dr. Ramesh Chandra Vaish, Shri Sushil Chandra Tripathi and Smt. Manju Rana have given their declaration of independence in terms of Section 149 of the Companies Act, 2013. One meeting of the Independent Directors excluding all other non-independent directors and officials of the Company was held as required under, Schedule IV to the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulations, 2015 wherein they reviewed the performance of the Executive Directors of the Company, Chairperson of the Company and assessed the quality, quantity and timelines of flow of information.

The Board of Directors of the Company at its meeting held on February 9, 2016 has reappointed Shri Saket Jaipuria as Whole-time Director designated as Executive Director of the Company for the period of three years w.e.f. February 11, 2016 on remuneration as approved by the Nomination and Remuneration Committee. His appointment is subject to the approval of shareholders at the ensuing Annual General Meeting.

The Key Managerial Personnel, namely, Sh. Shishir Jaipuria, Managing Director, Sh. Suresh Singhvi, Director-Finance & CFO and Sh.

Rajesh Tripathi, Company Secretary continue to hold their respective offices during the year under review.

The company has several Committees and the details along with its meeting have been included in the Corporate Governance Report.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the annual evaluation has been carried out by the Board of Independent Directors and Independent Directors reviewed the performance evaluation of the Chairman, Executive Directors and Board as a whole in the manner of evaluation as mentioned in the Nomination and Remuneration Policy of the Company.

VIGIL MECHANISM / WHISTLE BLOWER POLICY & NOMINATION AND REMUNERATION POLICY

The Company has in place the Vigil Mechanism / Whistle Blower Policy with a view to provide for adequate safeguards against victimization of persons who use such mechanism and made provisions for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. The Nomination and Remuneration Policy of the Company, on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of the Directors and other matters provided in Section 178 of the Companies Act, 2013, is annexed as Annexure - 'B'.

MEETINGS OF THE BOARD

During the year under review, five (5) Board Meetings were held on May 4, 2015, August 11, 2015,October 3, 2015, November 10, 2015 and February 9, 2016 and four (4) Audit Committee meetings were held on May 4, 2015, August 11, 2015, November 10, 2015 and February 9, 2016. In accordance with the requirement from time to time other Committee meetings were held and one separate meeting of Independent Directors was also held. The attendance of the Directors who attended the Board Meetings and Committees thereof have been included in the Corporate Governance Report.

CODE OF CONDUCT

The Code of conduct laid down by the Board is in operation in the Company. All Board members and senior management personnel have affirmed the compliance with the code. The declaration to this effect is enclosed to the Corporate Governance Report.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(3)(c) of the Companies Act, 2013, to the best of knowledge and belief and according to the information and explanations obtained, your Directors make the following statements that :

a. in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c. the Directors had taken proper and sufficient care 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 Directors had prepared the annual accounts on a going concern basis;

e. the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of investments made by the Company are included in note number 14 of the Financial Statements of the Company and the details of loans given by the Company are included in note number 15 in the Financial Statement of the Company. During the year under review, the Company has not given any Loans, Guarantees or security in connection with a loan to any other body corporate or person or made any Investments covered under the provisions of Section 186 of the Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Policy on Related Party Transactions may be assessed at the Company's website at www.ginnifilaments.com . During the year under review, there were no material contracts or arrangements with the related parties refer to in Section 188 of the Companies Act, 2013. However, the particulars of contracts or arrangements with related party in the form AOC-2 is annexed as Annexure 'C'.

RISK MANAGEMENT

The company has a Risk Management Committee which has the responsibility to identify the risk and suggest the management the mitigation plan for the identified risks in accordance with the risk management policy of the Company. The detail of risks and other concerns are included in the Management Discussion and Analysis which is the part of this Board's Report.

CORPORATE SOCIAL RESPONSIBILITY

In terms of Section 135 of the Companies Act, 2013, The Board of Directors of the Company had constituted a Corporate Social Responsibility Committee (CSR Committee). The Committee comprises of four Directors out of which two are Independent Directors. The CSR Committee framed a CSR policy of the Company which had been approved by the Board of Directors of the Company. The Company has taken initiatives towards advancement education among the children and contributed for construction of school's building. The Annual Report on Corporate Social Responsibility Activities, forms part of this Board's Report and is annexed as Annexure 'D'.

EXTRACT OF THE ANNUAL RETURN

In terms of provision of Section 134 (3) (a) of the Companies Act, 2013, the extract of the Annual Return as provided under section (3) of the Section 92 in form MGT-9, forms part of this Board's Report and is annexed as Annexure - 'E'.

FIXED DEPOSITS

The Company has neither invited nor accepted any fixed deposits from the public or its employees under section 73 of Companies Act, 2013 and rules made thereunder, during the year under review.

DETAILS OF MATERIAL CHANGES AND COMMITMENTS

There is no significant and material order, after March 31, 2016, passed by any of regulators, court of law or tribunals impacting the going concern status of the company or impacting its operations in future.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has an internal financial controls system, commensurate with the size, scale and complexity of its operation. The details have been included in the Management Discussion and Analysis which is the part of this Board's Report.

STATUTORY AUDIT

M/s. P. L. Gupta & Co., Chartered Accountants, (Firm Registration No.011575C) Statutory Auditors of the Company, were reappointed as Auditors of the Company at 31st Annual General Meeting (AGM) held on September 10, 2014, to hold office from the conclusion of 31st AGM until the conclusion of the 34th AGM subject to ratification of the appointment by the members at every AGM. The Company has received an eligibility letter under section 141 of the Companies Act, 2013 and rules made thereunder that they are not disqualified.

The Board of Directors based on recommendation of Audit Committee, recommends the ratification of the appointment of M/s P L Gupta & Co. as Statutory Auditors from the conclusion of ensuing Annual General Meeting till the conclusion of next Annual General Meeting in terms of Section 139 of the Companies Act, 2013 and the rules made thereunder.

COST AUDIT

The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s K. G. Goyal & Associates, Cost Accountants (Firm Registration No. 000024), as Cost Auditor's to audit the cost accounts of the Company for the Financial Year 2016-17. In accordance with the provisions of Section 148 of the Companies Act, 2013, read with Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors require ratification by the shareholders of the company.

The requirement of cost audit of the cost records of the Company had been dispensed with for the Financial Year 2014-15 in accordance with applicable rules of Companies (Cost Records and Audit) Amendment Rules, 2014. The requirement of Cost Audit shall apply in the financial year commencing on or after April 1, 2015.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed Mr. Praveen Dua, Proprietor of M/s PD and Associates, Company Secretary in practice as Secretarial Auditor of the Company to conduct the Secretarial Audit for the Financial Year ended March 31, 2016. The Secretarial Audit Report is annexed as Annexure -'F'.

AUDITOR'S REPORTS

The Auditors Report on the Audited Financial Statement of the Company for the year ended 31st March, 2016 do not contain any qualification, reservation or adverse remark so need not require any explanation or comment.

The Secretarial Audit Report for the Financial Year ended on March 31, 2016 issued by Secretarial Auditor do not contain any qualification, reservation or adverse remark so need not require any explanation or comment,

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and out-go, in accordance with the requirement of the Section 134(3)(m) of the Companies Act, 2013 read with rule 8 of the Companies (Account) Rules, 2014 forms part of this Board's Report and is annexed as Annexure - 'G'.

REMUNERATION AND PARTICULARS OF EMPLOYEES

The information in accordance with the provisions of Section 197 of the Companies Act, 2013 read with rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure - 'H'.

CORPORATE GOVERNANCE

Your Company is in compliance with the requirements and disclosures with respect to the report of Corporate Governance as required under Regulation 34 read with Schedule V of SEBI (LODR) Regulations, 2015. As a listed company, necessary measures are taken to comply with the requirements of regulations of SEBI (LODR) Regulations, 2015. A report on Corporate Governance as stated above, along with a certificate of compliance from the Statutory Auditors M/s P.L. Gupta & Co., Chartered Accountants, forms part of this Board's Report and is annexed as Annexure - 'I'.

ACKNOWLEDGEMENT

Your Directors would like to gratefully acknowledge and place on record their sincere appreciation for the cooperation and assistance received from its stakeholders, valued customers, suppliers, banks, financial institutions, government authorities and stock exchanges. The Directors also wish to place on record their sincere appreciation of the devoted and dedicated services rendered by all Executives, Staff Members and Workmen of the Company.

For and on behalf of the Board of Directors

SHISHIR JAIPURIA

Chairman & Managing Director

Place : Noida (U.P.)

Date : April 30, 2016