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Information Memorandum June 30, 2016

DIGJAM LIMITED (formerly Digjam Textiles Limited)

The Company was incorporated as Digjam Textiles Limited on June 17, 2015 under the Companies Act, 2013 with the Registrar of Companies, Ahmedabad and the name was changed to Digjam Limited vide Certificate of Incorporation dated March 23, 2016 issued by the

aforesaid Registrar of Companies. The Corporate Identification Number of our Company is U17123GJ2015PLC083569. For other details of the Company and address of the Registered Office of the Company, please refer to “History and Certain Corporate Matters” on page 57 of this Information Memorandum.

Registered Office: Aerodrome Road, Jamnagar, Gujarat - 361 006 Tel.: +91 288 2712 972 - 73 Fax: +91 288 2712 991 Contact Person: Sri Jatin Jain, Company Secretary

Website: www.digjam.co.in; Email: cosec@digjam.co.in

Our Promoters: Sri Sudarshan Kumar Birla and Sri Sidharth Kumar Birla

INFORMATION MEMORANDUM FOR LISTING OF 8,76,41,621 EQUITY SHARES OF ` ` ` ` 10 EACH ISSUED BY DIGJAM LIMITED (THE “COMPANY” / “DL”) PURSUANT TO THE SCHEME OF AMALGAMATION (THE “SCHEME”)

NO EQUITY SHARES ARE PROPOSED TO BE SOLD OR OFFERED PURSUANT TO THE INFORMATION MEMORANDUM

GENERAL RISKS Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in the Equity Shares of the Company unless they can afford to take the risk of losing part or all of their investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Equity Shares of our Company. For taking an investment decision, investors must rely on their own examination of the Company including the risks involved. Specific attention of investors is invited to the section titled “Risk Factors” given on Page 6 of the Information Memorandum.

ABSOLUTE RESPONSIBILITY OF DIGJAM LIMITED Digjam Limited having made all reasonable inquiries, accepts responsibility for and confirms that the Information Memorandum contains all information with regard to our Company, which is material, and that the information contained in the Information Memorandum is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omissions of which makes the Information Memorandum as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING The Equity Shares of our Company are proposed to be listed on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). Our Company has submitted the Information Memorandum with NSE & BSE and the same has been made available on our Company’s website viz. www.digjam.co.in. The Information Memorandum would also be made available on the website of NSE (www.nseindia.com) and BSE (www.bseindia.com).

REGISTRAR AND SHARE TRANSFER AGENT

MCS Share Transfer Agent Limited SEBI Regn. No.: INR000004108 12/1/5, Manoharpukur Road, Kolkata, West Bengal - 700 026 Ph. +91 33 4072 4051/4052/4053 Fax. +91 33 4072 4050 Email : mcssta@rediffmail.com Website: www.mcsdel.com

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TABLE OF CONTENTS

Title Page No. DEFINITIONS, ABBREVIATIONS AND INDUSTRY RELATED TERMS 1

CURRENCY OF FINANCIAL PRESENTATION AND USE OF MARKET DATA 4

FORWARD LOOKING STATEMENT 5

RISK FACTORS 6

SUMMARY OF INDUSTRY AND BUSINESS 15

SUMMARY OF FINANCIAL STATEMENTS 17

GENERAL INFORMATION 20

CAPITAL STRUCTURE 23

SCHEME OF AMALGAMATION 36

STATEMENT OF TAX BENEFITS 37

INDUSTRY OVERVIEW 47

OUR BUSINESS 52

HISTORY AND CERTAIN CORPORATE MATTERS 57

OUR MANAGEMENT 58

OUR PROMOTER 64

OUR PROMOTER GROUP 65

DIVIDEND POLICY 72

FINANCIAL INFORMATION 73

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENT 96

GOVERNMENT AND OTHER APPROVALS 103

OTHER REGULATORY AND STATUTORY DISCLOSURES 104

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION 107

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 129

DECLARATION 130

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DEFINITIONS, ABBREVIATIONS AND INDUSTRY RELATED TERMS

Unless the context otherwise indicates or implies, the following terms have the following meanings in this Information Memorandum and references to any statute or regulations or policies shall include amendments thereto, from time to time Company Related Terms

Term Description “DL”, "the Company”, "our Company", “we”, “us” or “our”

Unless the context otherwise requires, refers to, Digjam Limited (formerly Digjam Textiles Limited), a public limited company incorporated under the Companies Act, 2013

Articles / Articles of Association / AOA

The Articles of Association of our Company, as amended from time to time

Statutory Auditors / Auditors

The Statutory Auditors of our Company, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants

Board of Directors / the Board / our Board

The Board of Directors of Digjam Limited and includes its committee

Directors / our Directors The Director(s) of Digjam Limited, unless otherwise specified

Memorandum / Memorandum of Association / MOA

The Memorandum of Association of our Company, as amended from time to time

Registered Office / Our Registered Office

Registered Office of our Company situated at Aerodrome Road, Jamnagar, Gujarat - 361 006

Promoter(s) Sri Sudarshan Kumar Birla and Sri Sidharth Kumar Birla

Conventional and General Terms / Abbreviations

Term Description Act or Companies Act Companies Act, 1956, as amended (without reference to the sections thereof

that have ceased to have effect upon notification of sections of the Companies Act, 2013) (the “Companies Act, 1956”) read with the applicable provisions of the Companies Act, 2013, to the extent notified and in effect (the “Companies Act, 2013”)

AGM Annual General Meeting

Applicable Laws Any statute, notification, bye-laws, rules, regulations, guidelines, Common law, policy code, directives, ordinance, schemes, notices, orders or instructions, laws enacted or issued or sanctioned by any appropriate authority in India including any modifications or re-enactment thereof for the time being in force.

AS Accounting Standards as issued by the Institute of Chartered Accountants of India and notified by the Government.

BSE BSE Limited

CDSL Central Depository Services (India) Limited

Court or High Court Hon’ble High Court of Gujarat at Ahmedabad

Depositories Act The Depositories Act, 1996, as amended from time to time

Depository / Depositories A depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended from time to time, in this case being NSDL and CDSL

Depository Participant / DP

Depository participant as defined under the Depositories Act, 1996

EGM Extraordinary General Meeting

EPS Earnings per Equity Share

Equity Shares Equity Shares of our Company of face value ` 10 each, unless otherwise specified in the context thereof

Financial Year / Fiscal Year / FY

First Financial period from the date of Incorporation viz. June 17, 2015 to March 31, 2016 and thereafter twelve months ending on March 31 of a particular year

HUF Hindu Undivided Family

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Term Description Indian GAAP Generally Accepted Accounting Principles in India

Information Memorandum This document dated June 30, 2016 filed with BSE and NSE and referred to as the Information Memorandum

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

PAN Permanent Account Number

RBI Reserve Bank of India

SCRA Securities Contracts (Regulation) Act, 1956 as amended from time to time

SCRR Securities Contracts (Regulations) Rules, 1957 as amended from time to time

SEBI The Securities and Exchange Board of India constituted under the SEBI Act

SEBI (ICDR) Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009

SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time

Stock Exchange(s) Shall refer to the NSE and the BSE where the Equity Shares of Digjam are proposed to be listed.

Scheme of Amalgamation related terms

Term Description Act or The Act “Act” or “The Act” means the Companies Act, 1956 and shall include the

Companies Act, 2013 (to the extent applicable), including applicable rules and regulations thereunder, and includes any statutory re-enactments, modification or amendment thereto.

Amalgamating Company or erstwhile Digjam Limited

“Amalgamating Company” or “erstwhile Digjam Limited” means the erstwhile Digjam Limited, a company incorporated under the provisions of the Indian Companies Act, 1913 having its Registered Office at Aerodrome Road, Jamnagar - 361 006 Gujarat, India

Amalgamated Company or Digjam Limited (formerly Digjam Textiles Limited)

“Amalgamated Company” or “Digjam Limited” means Digjam Limited (formerly Digjam Textiles Limited), a company incorporated under the provisions of the Companies Act, 2013 having its Registered Office at Aerodrome Road, Jamnagar - 361 006, Gujarat, India

Appointed Date “Appointed Date” means the date from which the provisions of this Scheme shall become operational i.e. close of business on June 30, 2015 or such other date as may be assented to and approved by the Board of Directors (in pursuance to clause 19.1 of the Scheme) and approved by the High Court (as defined hereunder).

Board of Directors “Board of Directors” in relation to Amalgamating Company and Amalgamated Company, as the case may be, unless it be repugnant to the context or otherwise, include a committee of directors or any person authorized by the board of directors or such committee of directors.

Court or High Court “Court” or “High Court” means the Hon’ble High Court of Gujarat, at Ahmedabad and shall include the National Company Law Tribunal (‘NCLT’), or such other forum or authority having appropriate jurisdiction as may be vested with any powers of a High Court under the Act.

Effective Date or upon this Scheme becoming effective or upon coming into effect of this Scheme

“Effective Date” or “ upon this Scheme becoming effective” or “upon coming into effect of this Scheme” shall mean the last of the dates on which the certified copy of the formal order(s) of the High Court sanctioning this Scheme, as defined hereunder, is filed with the Registrar of Companies at Gujarat, by the Amalgamating Company and the Amalgamated Company respectively, as required under the provisions of the Act viz March 17, 2016

Encumbrance “Encumbrance” means: (i) Any mortgage, charge (whether fixed or floating), pledge, lien,

hypothecation, assignment, deed of trust, title retention, security interest or other encumbrance of any kind securing, or conferring any priority of payment in respect of, any obligation of the Amalgamating Company or the Amalgamated Company, including without limitations any right granted by a transaction which, in legal terms, is not the granting of security but which has an economic or financial effect similar to the

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Term Description granting of security under law;

(ii) Any proxy, power of attorney, voting trust agreement, interest or option in favour of any person;

(iii) Any adverse claim as to title, possession or use; or (iv) Any transfer restrictions.

Government Authority “Government Authority” means any applicable Central or State Government or local body, Legislative body, regulatory or administrative authority, agency or commission or any court, tribunal, board, bureau or instrumentality thereof or arbitration or arbitral body having jurisdiction.

Law or Applicable Law “Law” or “Applicable Law” includes all applicable statutes, enactments, acts of legislature or Parliament, Laws, ordinances. Rules, bye-laws, regulations, notifications, guidelines, policies, directions, directives and orders of any government statutory authority, tribunal, board, court or recognized stock exchange of India or any other country or jurisdiction as applicable

Person “Person” shall include any individual, joint venture, company, corporation, partnership (whether limited or unlimited), proprietorship, trust or other enterprise (whether incorporated or not), Hindu undivided family, union, association, government (central, state or otherwise), or any agency, department, authority or subdivision thereof, and shall include their respective successors and in case of an individual shall include his/her legal representatives, administrators, executors and heirs and in case of a trust shall include the trustee or the trustees for the time being.

Record Date(s) “Record Date(s)” means the date(s) to be fixed by the Board of Directors of the Amalgamated company, after the Effective Date, with reference to which the eligibility of the equity shareholders and / or preference shareholders of the Amalgamating Company for the purposes of issue and allotment of shares of the Amalgamated Company, in terms of the Scheme, shall be determined viz March 31, 2016

Scheme or the Scheme or this Scheme

“Scheme” or “the Scheme” or “this Scheme” means this Scheme of Amalgamation as set out herein and approved by the Board of Directors of the Amalgamating Company and the Amalgamated Company, subject to such modifications as the High Court or SEBI or any other regulatory authority as applicable may impose or the Amalgamating Company and the Amalgamated Company may prefer and the High Court may approve.

SEBI “SEBI” means Securities and Exchange Board of India

Share Entitlement Ratio “Share Entitlement Ratio” means the number of equity shares of the Amalgamated Company to which a shareholder of the Amalgamating Company would be entitled to in proportion to his/her/its existing shareholding in Amalgamating Company.

Stock Exchange or Stock Exchanges

“Stock Exchange” or “Stock Exchanges” means BSE Limited (BSE) and National Stock Exchange of India Limited (NSE)

Industry / Business Related Terms

Term Description CFC Common Facility Centres

FDI Foreign Direct Investment

GDP Gross Domestic Product

IIP Index of Industrial Production

Oeko-Tek Certificate Certificate issued by Hohenstein Textiles Testing Institute of Germany for wool and woolen blended fabrics

OGL Open General License

P/V Yarn Polyester / Viscose yarn

T&C Textiles and Clothing

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CURRENCY OF FINANCIAL PRESENTATION

In the Information Memorandum, the terms “we”, “us”, “our”, the “Company”, “our Company”, “DL”, unless the context otherwise indicates or implies, refers to Digjam Limited (formerly Digjam Textiles Limited). In the Information Memorandum, unless the context otherwise requires, all references to one gender also refers to another gender and the word “Lac / Lakh” means “one hundred thousand”, the word “million (mn)” means “ten lac / lakh”, the word “Crore” means “ten million” and the word “billion (bn)” means “one hundred crore”. In the Information Memorandum, any discrepancies in any table between total and the sum of the amounts listed are due to rounding-off. Throughout the Information Memorandum, unless otherwise stated, all figures have been expressed in millions except the financial statements of our Company which is in lakhs. Unless indicated otherwise, the financial data in the Information Memorandum is derived from our financial statements prepared in accordance with Indian GAAP and included in the Information Memorandum. There are significant differences between Indian GAAP and U.S. GAAP; accordingly, the degree to which the Indian GAAP financial statements included in the Information Memorandum will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practice and Indian GAAP. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in the Information Memorandum should accordingly be limited. We have not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own advisors regarding such differences and their impact on our financial data. For additional definitions used in the Information Memorandum, see the section titled “Definitions Abbreviations and Industry Related Terms” on page 1 of the Information Memorandum. In the section titled “Main Provisions of the Articles of Association” on page 107, defined terms have the meaning given to such terms in the Articles of Association of our Company.

USE OF MARKET DATA Unless stated otherwise, market data used throughout the Information Memorandum was obtained from internal Company reports, data, websites and industry publications. Industry publication data and website data generally state that the information contained therein has been obtained from sources believed to be reliable, but that their accuracy and completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Although, we believe market data used in the Information Memorandum is reliable, it has not been independently verified. Similarly, internal Company reports and data, while believed by us to be reliable, have not been verified by any independent source.

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FORWARD LOOKING STATEMENT

We have included statements in the Information Memorandum which contain words or phrases such as “will”, “aim”, “is likely to result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of such expressions, that are “forward-looking statements”. All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from our expectations include but are not limited to:

• General economic and business conditions in the markets in which we operate and in the local, regional and national economies as well as terms of international trade;

• Changes in laws and regulations relating to the industry in which we operate;

• Increased competition in these industries;

• Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch and implement various projects and business plans.

• Our ability to meet our capital expenditure requirements;

• Fluctuations in operating costs;

• Our ability to attract and retain qualified personnel;

• Changes in technology;

• Changes in political and social conditions in India or in countries that we may enter, the monetary and interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

• The performance of the financial markets in India and globally; and

• Any adverse outcome in the legal proceedings in which we are involved.

For a further discussion of factors that could cause our actual results to differ, please refer to the sections titled “Risk Factors” and “Our Business” on pages 6 and 52, of the Information Memorandum respectively. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Neither we nor our Directors have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.

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RISK FACTORS

An investment in equity securities involves a high degree of risk. You should carefully consider all of the

information in this Information Memorandum, including the risks and uncertainties described below, before

making an investment in the Equity Shares. Any of the following risks could have a material adverse effect on

our business, financial condition and results of operations and could cause the trading price of the Equity

Shares to decline, which could result in the loss of all or part of your investment. The risks and uncertainties

described in this section are not the only risks that we currently face. Additional risks and uncertainties not

known to us or that we currently believe to be immaterial may also have an adverse effect on our business,

results of operations and financial condition. The financial and other related implications of risks concerned,

wherever quantifiable, have been disclosed in the risk factors mentioned below. However, there are certain risk

factors where the effect is not quantifiable and hence has not been disclosed in such risk factors. You should not

invest in the Equity Shares unless you are prepared to accept the risk of losing all or part of your investment,

and you should consult your tax, financial and legal advisors about the particular consequences to you of an

investment in the Equity Shares.

INTERNAL RISK FACTORS 1. In the past, 4 of our Promoter Group entities have obtained consent order from SEBI.

Four Promoter Group entities of erstwhile Digjam Limited viz. Janardhan Trading Co. Limited, Birla Holdings Limited, Central India General Agents Limited and Sukriti Education Society, filed application for consent with Securities and Exchange Board of India on December 7, 2011 bearing No. 2483 of 2011 for condoning delay in disclosure about accrual of voting rights entirely and automatically by operation of provisions of Section 87(2) of the Companies Act, 1956 in respect of 14,94,000 - 8% Cumulative-Redeemable Preference Shares of face value ` 100/- each held by them on account of non-payment of dividend by erstwhile Digjam Limited as on the annual general meeting of the Company held on August 25, 2011. SEBI vide its Order dated December 31, 2013 accepted the revised consent terms offering to pay a sum of ` 13,27,500/- towards settlement charges by the said Promoter Group Companies to settle any anticipated proceedings for the delay, which amount was paid on November 28, 2013 and it was confirmed that enforcement action would not be initiated against the said companies for the said default.

2. We are involved in certain legal proceedings that if decided against us may adversely affect our business

operations, results of operations and financial condition.

We are involved in certain legal proceedings pending at different levels of adjudication before various courts and tribunals. In the event of any new development such as a change in Indian law or a ruling against us by any such court or tribunal, we may be required to make provisions in our financial statements. There can be no assurance that these legal proceedings will be decided in our favour. Furthermore, we may also not be able to quantify all the claims in which we are involved. For details of our outstanding litigations, refer to the section titled “Outstanding Litigations and Material Developments” on page 96 of this Information Memorandum.

3. We may not be able to obtain adequate funding required for our requirements, including working capital

or to carry out any future plans for growth. Further, the conditions and restrictions, if any, imposed

under our financing arrangements could restrict our ability to conduct our business and operations.

We require continuous access to large quantities of capital in order to carry out our day-to-day operations. We expect that in the future we will also require outside financing to fund capital expenditures needed to support the growth of our business, refinance any existing debt obligations and to meet our liquidity requirements. In the event of adverse market conditions, or if actual expenditures exceed planned expenditures, our external financing activities and internal sources of liquidity may not be sufficient to affect current and future operational plans. Our ability to arrange external financing and the cost of such financing, as well as our ability to raise additional funds through other means in the future, is dependent on numerous factors. These factors include general economic and capital market conditions, interest rates, credit availability from banks or other lenders, investor confidence in the Company and our financial condition and results of operations. We can make no guarantee that we will be able to obtain bank or other loans in the future on reasonable terms or at all. If we are unable to arrange adequate external financing on reasonable terms, our business, operations, financial condition and prospects may be adversely and materially affected.

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Further, the agreements that we enter into with banks for term loans, working capital loans, cash credit, letters of credit, and bank guarantees may contain restrictive covenants, including, but not limited to, cross defaults, requirements that we obtain consent from the lenders prior to altering our memorandum and articles of association or capital structure or altering the shareholding pattern, obtaining any additional loans, effecting any scheme of amalgamation or reconstruction, for further expansion of business or taking up a new business activity or investing in a subsidiary whether in the same line of business or in any unrelated business, creating any charge or lien on our assets, or bringing about any change, whether directly or indirectly, in the management and control of our Company. There can be no assurance that we will be able to comply with these financial or other covenants or that we will be able to obtain consents necessary to take the actions that we believe are required to operate and grow our business.

4. We rely on our senior executives and our skilled workforce to operate successfully and implement the

key elements of our business strategy. Our inability to attract and retain such personnel may adversely

affect our business, results of operations and financial condition.

The success of our business and the continued implementation of our business strategy will depend on the continued employment and performance of our senior executives and skilled workforce. For instance, we place significant reliance on the management and technical expertise and industry relationships of the senior management/members of our board of directors. Our performance also depends on our ability to identify, recruit and retain sufficient numbers of technical, sales, administrative support and other qualified personnel. Further, in view of increased competitive pressures in the Indian business environment, we may face an increasing risk of employee attrition as well as increased demands for compensation and employee benefits. If any of our key personnel or significant numbers of our trained workforce resign or are unable to continue in their present roles and are not adequately replaced in reasonable time and at comparable or reasonable cost, our business, results of operations and financial condition may be adversely affected.

5. Our product offering includes a range of fast changing designs and thus it is critical to promptly identify

and respond to changing customer preferences or evolving trends for our continued operations.

Our success depends on the ability to meet our customers need on a continuing basis. Designs are seasonal & constantly changing with changes in customer preferences, income levels & demographics. There may be a risk of lack of innovation in merchandise offerings due to conservative selection of designs, miscommunication of brand promise and strong personal preferences of people involved in decision making. Our success depends upon our ability to anticipate and respond to the changing customer lifestyle & preferences in a timely manner, failure of which may affect the business.

6. Our business is highly dependent on Supply Chain Management. Inefficient supply chain management

by us or third parties may affect our business and our results of operations.

The success of our business is dependent on effective supply chain management. Our supply chain stretches from suppliers to final customers. Ensuring availability of shelf space for our products requires quick turnaround times and high level of coordination with suppliers. Any constraints in the supply chain encompassing the process from suppliers to the final customers can have a serious impact on the performance of the Company.

7. The business and future results of operations of the Company may be adversely affected if it is not able

to identify and acquire quality retail space in line with retail expansion plans.

The Company’s expansion plans involve risks and difficulties, many of which are beyond its control and accordingly there can be no assurance that the Company will be able to complete its plans on schedule or without incurring additional expenditures or at all. The Company’s success will depend on, among other things, its ability to assess potential markets, time its capital investments, attract new customers in India and abroad and maintain and enhance its position with its current customers, obtain timely all the necessary government & other regulatory approvals, maintain sufficient operational and financial controls and successfully integrate the new facilities with the existing facilities. There can be no assurance that the Company’s expansion plans will result in it achieving the sales that it expects to, or that it will be able to, achieve the targeted return on investment on the expansion plans.

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The Company’s future results of operations may be adversely affected if it is unable to implement its growth strategies successfully.

8. Our business is dependent on our manufacturing facilities, which is located at Jamnagar, Gujarat. The

loss of or shutdown of operations at our manufacturing facilities may have a material adverse effect on

our business, financial condition and results of operations.

We are a single location manufacturing unit. Besides manufacture of wool and wool blended fabrics at our aforesaid unit, we outsource certain varieties of fabrics to complement our range of offerings. Any dislocation or disruption of the manufacturing operations or any part thereof may prevent us from offering our range of products for sale and this may adversely affect our business, projections and results.

9. Since we have a composite woolen textile mills for our manufacturing business, the impact of production

slowdowns in a particular process may adversely affect our operations and profitability in connection

with the other products higher in the order of our textile manufacturing value chain. Further, increased

costs in any business verticals lower in the value chain may affect profitability of the business verticals

higher in the order.

We have a composite woolen textile mills and manufacture of fabrics with various blends passes through a number of processes. Accordingly, any slowdown in production or sales of a process/product may adversely affect the production and the results of our operations from other products which are higher in the order in our manufacturing value chain. For instance, because most of our products are used in a manufacturing chain in which raw wool with or without blending with polyester and other fibres, through a series of intermediate processes, results in finished fabric, adverse effects on any link in the chain can have indirect effects on all of our other production processes. Similarly, if the production of yarn is affected due to any reason such as machinery breakdown, the production of fabric will be similarly affected. Moreover, increased costs in any one business vertical of our business may affect the profitably of the subsequent vertical in the value chain. For instance, an increase in the price of yarn would typically benefit the results of our operations in connection with manufacture of yarn, but our profitability in connection with fabric could be adversely affected, if we are unable to pass on increased costs in our manufactured fabrics.

10. Our failure to accurately manage our inventory levels could result in an unexpected shortfall and/or

surplus of products, which could have a material adverse impact on our manufacturing operations,

profitability and cash flows.

We monitor our inventory levels based on the annual/seasonal forecast received from our dealers and customers and to a certain extent on our projections of future demand. We typically maintain our inventory levels for a period of approximately three to four months for our products/raw materials. Due to the time necessary to manufacture the required commercial quantities of our products, we typically procure the seasonal forecasts in advance from most of our dealers and customers prior to commencing production and sales for most of our products. We cannot guarantee that our dealers and customers will submit orders which correlate to their forecasts. A shortfall in the off-take of the manufactured products by the dealers/customers based on their forecasts can result in surplus of products, which may increase finished inventory holding costs, negatively impact cash flow, result in inventory reduction at discounted prices leading to margin erosions, create write-offs of inventory, affect customer relationships and lead to capacity under-utilization. In addition, as we manufacture our products based on the receipt of orders from our dealers/customers, our inability to maintain sufficient orders during a particular period may lead to under-utilization of capacity of our manufacturing units and have an adverse impact on our sales and revenues. Further, an inaccurate forecast of demand for any product can also result in the unavailability and surplus of products. Any of the aforesaid circumstances could have a material adverse effect on our business, results of operations and financial condition.

11. Any inability on our part to comply with prescribed specifications and standards of quality in connection

with our products and/or manufacturing facilities could adversely impact our operations and

profitability. Moreover, our inability to renew or maintain our statutory and regulatory permits and

approvals required to operate our business would adversely affect our operations and profitability.

Our business requires obtaining and maintaining quality certifications, accreditations, statutory and regulatory permits and approvals from certain independent certification entities to operate our business and

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manufacturing facilities, certain of which may have expired and have been applied for and certain of which are due to expire in the near future. In the future, we will be required to renew such permits and approvals and obtain new permits and approvals for any proposed operations. While we believe that we will be able to renew or obtain such permits and approvals as and when required, there can be no assurance that the relevant authorities will issue or re-issue any such permits or approvals in the timeframe anticipated by us, or at all. Further, government approvals, licenses, clearances and consents are often also subject to numerous conditions, some of which are onerous and may require significant expenditure. Failure by us to obtain, renew or maintain the required permits or approvals may result in the interruption of our manufacturing operations or delay or prevent our expansion plans and may have a material adverse effect on our business, financial condition and results of operations. Further, we are required to adhere to stringent regulatory/statutory/contractual specifications and standards, and our customers often require our manufacturing facilities and products to be pre-approved and/or accredited by various agencies before placing orders for our products. If we fail to adhere to the aforesaid requirements or changes thereto in a timely manner, or at all, our cash flows, operations and/or profitability could be adversely affected. Our business and results of operations will be adversely affected if we are unable to develop and maintain a continuing relationship or pre-qualified status with certain of our key customers.

12. We are subject to risks arising from currency exchange rate fluctuations, which could adversely affect

our business, financial condition and results of operations.

We are exposed to foreign currency risk to the extent of our raw material imports and overseas expenditure as well as export sales which may not be fully hedged. Further, depreciation in the value of Indian Rupee may result in increase in the cost of raw materials and/or equipment and appreciation in the value of Indian Rupee may result in reduced sales. Depreciation in the value of the Indian Rupee against such other currencies could increase the Indian Rupee cost of purchasing raw materials or equipment. The exchange rate between the Indian Rupee and the U.S. Dollar has witnessed significant fluctuations in the recent past. The foreign exchange rate may continue to fluctuate significantly in the future. Further, we may in the future enter into hedging arrangements, and there can be no assurance that current or future arrangements will successfully protect us from losses due to fluctuations in currency exchange rates. Changes in currency exchange rates may adversely affect our business, financial condition and results of operations.

13. We are subject to risks arising from interest rate fluctuations, which could adversely affect our business,

financial condition and results of operations. If interest rates rise, interest payable on any debt availed by us will also rise, thus increasing the Company’s interest expense and limiting the Company’s ability to implement its growth strategies due to increased borrowing cost, and/or causing the Company to explore alternative means of fund raising to finance future growth. Such a rise in interest rates could materially and adversely affect the Company’s business, financial condition and results of operations.

14. We have entered and may enter into transactions with related parties in the future. Such transactions

with our related parties could potentially involve conflicts of interest and there can be no assurances that

such transactions, individually or in the aggregate, will not have an adverse effect on our business,

prospects, results of operations and financial condition.

We have entered into certain transactions with related parties and may continue to do so in future. These transactions or any future transactions with our related parties could potentially involve conflicts of interest. We cannot assure that we could not have achieved more favorable terms had such transactions been entered into with unrelated parties. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on our business, prospects, financial condition and results of operations, including because of potential conflicts of interest or otherwise. Further, the Companies Act, 2013 has brought into effect certain significant changes providing for more stringent compliance requirements for related party transactions. SEBI has recently issued revised corporate governance guidelines by notifying the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, which are applicable for all listed companies with effect from December 01, 2015. Pursuant to these regulations and the Companies Act, 2013, our Company may be, inter alia, required to obtain prior approval of majority of our shareholders through an ordinary resolution

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for all future material related party transactions where any person or entity that is related to our Company will be required to abstain from voting on such resolutions. We may face difficulties in entering into related party transactions in future due to these new requirements which may adversely affect our business and results of operations.

15. We may not be sufficiently protected or insured against all potential losses to which we may be subject. If

we incur a significant liability for which we are not fully insured or are unable to successfully assert our

claim, there may be an adverse effect on our business, results of operations and financial condition.

We maintain comprehensive fire and special perils insurance cover for the majority of our assets, which covers material damage, due to fire, accidents and natural disasters including earthquakes as well as storm, typhoon, flood indemnity, lightening, aircraft damage, missile testing operations, riot, strike and malicious damage. In addition, we maintain marine insurance to cover losses caused by sea perils, theft or non-delivery of products we ship to customers overseas and the raw materials and equipment we import. Similarly, we insure shipment of our products and raw materials while in transit within India against such losses. While we believe that our insurance coverage is in accordance with relevant regulations and customary industry practices in India, the extent of our existing or future insurance coverage may be insufficient to cover all financial losses that we may suffer. It may not be possible in all instances to obtain adequate insurance on commercially reasonable terms. While we have incurred loss or damage with respect to our business or operations requiring us to make significant insurance claims in the past, we cannot assure you that such claims will not be made by us in the future. Further, if we incur a significant liability for which we are not fully insured or are unable to successfully assert our claim, there may be an adverse effect on our business, results of operations and financial condition.

16. We are majorly dependent on the Indian market for sales of our products. The Indian markets are

extremely competitive and our inability to compete effectively or a fall in demand for our products may

lead to lower market share or reduced operating margins, and adversely affect our results of operations.

India is our primary market and we face competition in our business from domestic as well as international manufacturers. Due to the commodity nature of most of our product sales, competition in these markets is based primarily on demand and price. As a result, to remain competitive in our market, we must continuously strive to reduce our production, transportation and distribution costs, improve our operating efficiencies and secure our raw materials requirements. If we fail to do so, other producers may be able to sell their products at prices lower than our prices, which would have an adverse effect on our market share and results of operations. Further, we cannot control the market forces and provide assurance that our current or potential competitors will not offer products comparable or superior to our products. Further, demand for our products may be adversely affected by factors such as changes in India’s economic, fiscal, export-import and monetary policies, political and financial instability, decline in growth rates of the economy, increases in the price of raw materials consumed by us, changing consumer preferences and excess capacity. A decrease in demand for the products we sell in India could have a material adverse impact on our business, financial condition and results of operations.

17. Orders placed by customers may be delayed, modified, cancelled or not fully paid for by our customers,

which may have an adverse effect on our business, financial condition and results of operations.

We may encounter problems in executing the orders in relation to our products, or executing it on a timely basis. Moreover, factors beyond our control or the control of our customers may postpone the delivery of such products or cause its cancellation, including delays or failure to obtain necessary permits, authorizations, permissions and other types of difficulties or obstructions. Due to the possibility of cancellations or changes in scope and schedule of delivery of such products, resulting from our customers’ discretion or problems we encounter in the delivery of such products or reasons outside our control or the control of our customers, we cannot predict with certainty when, if or to what extent we may be able to deliver the orders placed. Additionally, delays in the delivery of such products can lead to customers delaying or refusing to pay the amount, in part or full, that we expect to be paid in respect of such products. Delay in delivery may also entail higher freight cost for us to transport the products by a speedier mode. In addition, even where a delivery proceeds as scheduled, it is possible that the contracting parties may default or otherwise fail to pay amounts owed. Any delay, modification, cancellation of order by our customers

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may have material adverse effect on our quality of order service, financial condition and results of operations.

18. If we do not continue to invest in new technologies and equipment, our technologies and equipment may

become obsolete and our cost of production may increase relative to our competitors, which may have an

adverse impact on our business, results of operations and financial condition.

Our profitability and competitiveness depend in large part on our ability to maintain a low cost of operations, including our ability to produce sufficient quantities of our products as per the agreed specifications. If we are unable to respond or adapt to changing trends and standards in technologies and equipment, or otherwise adapt our technologies and equipment to changes in market conditions or requirements, in a timely manner and at a reasonable cost, we may not be able to compete effectively and our business, results of operations and financial condition may be adversely affected.

19. Our future ability to use and protect our intellectual property rights may be impaired. As we operate in an intensely competitive business environment, our inability to effectively use or protect our intellectual property rights, including the trade marks, logo and name of the Company, may adversely affect our business, results of operations and financial condition. Additionally, third parties may infringe our intellectual property, causing damage to our business prospects, reputation and goodwill. Our efforts to protect our intellectual property may not be adequate and any third party claim on any of our unprotected brands may lead to erosion of our business value and our operations could be adversely affected. We may need to litigate in order to determine the validity of such claims and the scope of the proprietary rights of others. Any such litigation could be time consuming and costly and a favorable outcome cannot be guaranteed. We may not be able to detect any unauthorized use or take appropriate and timely steps to enforce or protect our intellectual property. We cannot assure that any unauthorized use by third parties of the intellectual property will not cause damage to our business prospects, reputation and goodwill.

20. Our ability to pay dividends in the future will depend upon our future earnings, financial condition, cash

flows, working capital requirements and capital expenditures and the terms of our financing

arrangements. There can be no assurance that we will pay dividends in the future. The declaration of dividends would be recommended by our Board of Directors, at its sole discretion, and would depend upon a number of factors, including Indian legal requirements, our future earnings, financial condition, cash flows, working capital requirements and capital expenditures. Our business is working capital intensive. Additionally, we may be restricted by the terms of our debt financing from making dividend payments in certain circumstances.

21. We rely extensively on our IT systems and any disruption in the system or any failure may impact

business. Our business uses IT system extensively for connectivity across our business functions through our software, hardware and other connectivity systems. The business processes are also IT enabled and any disruption with the functioning of the IT system could affect the business operations.

EXTERNAL RISK FACTORS 1. The regulatory framework in India is evolving and regulatory changes may have an adverse effect on

our business, results of operations and financial condition. Our inability to comply with such

requirements may adversely affect our business, results of operations and financial condition.

Our existing business is subject to a range of laws, rules, regulations and circulars issued and adopted by the central, state and local authorities in India. Compliance with regulations applicable to the Textile industry as well as environmental and health and safety laws and regulations creates costs for us that are an inherent part of our business. Further, the adoption of new laws and regulations, new interpretations of existing laws and regulations, increased or stricter governmental enforcement or other developments in the future may require that we make additional capital expenditure or incur additional operating expenses in order to maintain our current or future operations or take other actions that may have an adverse effect on our business, results of operations and financial condition. For instance, India is expected to tighten its carbon dioxide emission regulations in the future, which may impose substantial compliance costs for upgrading facilities and require further investment by us in green technology. The measures we implement

12

in order to comply with new laws and regulations may not be deemed sufficient by concerned regulatory authorities and our compliance costs may significantly exceed current estimates. If we fail to meet compliance requirements, we may also be subject to administrative, civil and criminal proceedings by such regulatory authorities, as well as civil proceedings by environmental or civil society groups and other individuals (including employee unions), which may result in substantial claims, penalties and damages against us as well as orders that may limit, disrupt or cause closure of our operations, any of which may have an adverse effect on our business, results of operations and financial condition. We may also be involved in or be held responsible in litigation or proceedings relating to environmental or health and safety matters in the future, the costs of which may be material, or which may cause damage to our reputation or trigger a default under the terms of our existing or future borrowings or other contractual commitments. Clean-up and remediation or compensation costs and related litigation may also adversely affect our cash flow, results of operations and financial condition. We may also incur liabilities for environmental or other damage caused by acts or omissions of our third party contractors, and we cannot be certain that we are adequately protected from any such unforeseen risks under the terms of our contractual arrangements, including terms as to limitation of liability, contractual indemnities and other protections against our transaction counterparties, or in terms of our insurance coverage.

Additionally, any increase in taxes and/or levies, or the imposition of new taxes and/or levies in the future like GST, could increase the cost of production/operating expenses. Taxes and other levies imposed by the central or state governments in India that affect our industry include customs duties, excise duties, sales tax, income tax and other taxes, duties or surcharges introduced on a permanent or temporary basis from time to time. The central and state tax scheme in India is extensive and subject to change from time to time. Any adverse changes in any of the taxes levied by the central or state governments may adversely affect our competitive position and profitability.

2. Our Equity Shares have never been publicly traded and our listing on the Stock Exchanges may not

result in an active or liquid market for our Equity Shares. Further, the price of our Equity Shares may

be volatile.

There has been no public market for our Equity Shares, and an active trading market on the Stock Exchanges may not develop or be sustained after the listing of the Equity Shares. Listing and quotation does not guarantee that a market for our Equity Shares will develop, or if developed, the liquidity of such market for our Equity Shares. Further, the market price of our Equity Shares may be subject to significant fluctuations in response to, among other factors, variations in our operating results, market conditions specific to the industry we operate in, developments relating to India and volatility in the Stock Exchanges and securities markets elsewhere in the world.

3. Financial instability, economic developments and volatility in securities markets in other countries may

also cause the price of our Equity Shares to decline.

The Indian economy and its securities markets are influenced by economic developments and volatility in securities markets in other countries. Investors’ reactions to developments in one country may have adverse effects on the market price of securities of companies located in other countries, including India. A loss of investor confidence in the financial systems of other emerging markets may cause increased volatility in Indian financial markets and the Indian economy in general. Any worldwide financial instability could also have a negative impact on the Indian economy, including the movement of exchange rates and interest rates in India. Any financial disruption could have an adverse effect on our business, future financial performance, shareholders’ equity and the price of our Equity Shares.

4. Currency exchange rate fluctuations may affect the value of the Equity Shares.

Our Equity Shares will be quoted in Rupees on the Stock Exchanges. Any dividends in respect of the Equity Shares will be paid in Rupees and subsequently converted into other currencies for repatriation. Any adverse movement in exchange rates during the time it takes to undertake such conversion may reduce the net dividend to investors. In addition, any adverse movement in exchange rates during a delay in repatriating the proceeds from a sale of Equity Shares outside India, for example, because of a delay in regulatory approvals that may be required for the sale of Equity Shares, may reduce the net proceeds received by shareholders.

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5. Any future issue of Equity Shares may dilute the investor’s shareholding and sales of our Equity Shares

by our Promoter or other major shareholders may adversely affect the trading price of the Equity

Shares.

Any future issuance of the Equity Shares by the Company could dilute your shareholding. Any such future issuance of the Equity Shares (including the issuance of Equity Shares under any employee stock option scheme) or future sales of the Equity Shares by any of our significant shareholders may also adversely affect the trading price of the Equity Shares and impact our ability to raise capital through an offering of our securities. Any perception by investors that such issuances or sales might occur could also affect the trading price of the Equity Shares. Additionally, any existing or proposed disposal, pledge or encumbrance of our Equity Shares by any of our Company’s major shareholders, or the perception that such transactions may occur, may affect the trading price of our Equity Shares. No assurance may be given that our Company will not issue Equity Shares or that such shareholders will not dispose of, pledge or encumber their Equity Shares in the future.

6. Rights of shareholders under Indian law may differ or may be more limited than under the laws of other

jurisdictions.

The Companies Act and related regulations, the rules and regulations issued by SEBI and other regulatory authorities, the Memorandum of Association, the Articles of Association and the listing agreements to be entered into with the Stock Exchanges govern the corporate affairs of the Company. Legal principles relating to these matters and the validity of corporate procedures, directors’ fiduciary duties and liabilities, and shareholders’ rights may differ from those that would apply to a company in another jurisdiction. Shareholders’ rights under Indian law may not be as extensive as shareholders’ rights under the laws of other countries or jurisdictions. Investors may have more difficulty in asserting their rights as a shareholder in India than as a shareholder of a corporation in another jurisdiction.

7. Significant differences exist between Indian GAAP and other accounting principles, such as US GAAP

and IFRS, which may be material to investors' assessments of our financial condition. Further, our

failure to successfully adopt IND (AS) may have an adverse effect on the price of our Equity Shares.

Our financial statements are prepared in accordance with Indian GAAP. We do not provide a reconciliation of our financial statements to those of U.S. GAAP or IFRS. U.S. GAAP and IFRS differ in significant respects from Indian GAAP. Accordingly, the degree to which the Indian GAAP financial statements will provide meaningful information is entirely dependent on the reader's level of familiarity with Indian accounting practices. Further, India has decided to adopt the “Convergence of its existing standards with IFRS” and not the IFRS, which was announced by the MCA, through the press note dated January 22, 2010. These “IFRS based / synchronized Accounting Standards” are referred to in India as IND (AS). The Ministry of Corporate Affairs, Government of India has issued the Companies (Indian Accounting Standards) Rules, 2015 pursuant to which the IND (AS) shall be mandatorily applicable to companies (except banking companies, insurance companies and non-banking financial companies) effective from (i) the accounting periods beginning on or after April 1, 2016 (with comparatives for the period ending March 31, 2016 or thereafter), for all companies with net worth of ` 500 crores or more; and (ii) the accounting periods beginning on or after April 1, 2017 (with comparatives for the period ending March 31, 2017 or thereafter) for listed or to be listed companies (i.e. whose equity and/or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India) with net worth less than ` 500 crores and unlisted companies with net worth between ` 250 crores and ` 500 crores. These requirements would also apply to any holding, subsidiary, joint venture or associate companies of such aforementioned companies. There can be no assurance that the adoption of IND (AS) will not affect our reported results of operations or financial condition. Any failure to successfully adopt IND (AS) may have an adverse effect on the trading price of our Equity Shares. Moreover, our transition to IND (AS) reporting may be hampered by increasing competition and increased costs for the relatively small number of IND (AS)-experienced accounting personnel available as more Indian companies begin to prepare IFRS financial statements. Any of these factors relating to the use of IND (AS) may adversely affect our financial condition.

8. Our business may be adversely affected by any social, political and economic changes in India,

including if one or more of such changes lead to an adverse change in government policy.

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The Government of India has traditionally exercised and continues to exercise a significant influence over many aspects of the economy. Our business, and the market price and liquidity of our Company’s shares, may be affected by changes in GoI’s policies, including taxation. Social, political, economic or other developments in or affecting India could also adversely affect our business. Since 1991, successive governments have pursued policies of economic liberalization and financial sector reforms including significantly relaxing restrictions on the private sector. The rate of economic liberalization could change, and specific laws and policies affecting foreign investment and other matters affecting investment in our Equity Shares could change as well. In addition, any political instability in India may adversely affect the Indian economy and the Indian securities markets in general, which could also affect the trading price of our Equity Shares. Any adverse change in government policies relating to the textile sector or other connected sectors in which we operate may have an impact on our profitability.

India’s economy could be adversely affected by a general rise in interest rates, adverse weather conditions affecting agriculture, commodity and energy prices as well as various other factors. A slowdown in the Indian economy could adversely affect the policy of the GoI towards our industry, which may in turn adversely affect our financial performance and our ability to implement our business strategy. The Indian economy is also influenced by economic and market conditions in other countries, particularly emerging market conditions in Asia. A decline in India’s foreign exchange reserves may also affect liquidity and interest rates in the Indian economy, which could adversely impact our financial condition. A loss of investor confidence in other emerging market economies or any worldwide financial instability may adversely affect the Indian economy, which could materially and adversely affect our business and results of operations and the market price of our Equity Shares.

9. Natural calamities and force majeure events may have an adverse impact on our business.

Our industry may be affected by a number of natural hazards including earthquakes, floods, tsunamis and landslides. Natural disasters may cause significant interruption to our operations and disruptions at our manufacturing facilities, or to the operations of our supply chain/distributors. The extent and severity of these natural disasters determines their impact on the Indian economy. Prolonged spells of deficient or abnormal rainfall and other natural calamities could have an adverse impact on the Indian economy, which could adversely affect our business and results of operations.

Further, our business operations may be adversely affected by severe weather conditions, particularly water shortage, which may cause suspension or curtailment of operations and delays in the delivery of raw materials, production and distribution of our products. This may result in delays to our contract schedules and reduction of our productivity. During periods of curtailed activity due to natural calamities, we may continue to incur operating expenses, but our income from operations may be delayed or reduced.

10. Hostilities, terrorist attacks, civil unrest and other acts of violence could adversely affect the financial

markets and our business. Terrorist attacks and other acts of violence or war may adversely affect the Indian securities markets. These acts may result in a loss of business confidence, make travel and other services more difficult and have other consequences that could have an adverse effect on our business. In addition, any deterioration in international relations, especially between India and its neighboring countries, may result in investor concern regarding regional stability which could adversely affect the price of our Equity Shares. In addition, India has witnessed local civil disturbances in recent years and it is possible that future civil unrest as well as other adverse social, economic or political events in India could have an adverse impact on our business. Such incidents could also create a greater perception that investment in Indian companies involves a higher degree of risk and could have an adverse impact on our business and the market price of our Equity Shares.

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SUMMARY OF INDUSTRY AND BUSINESS

OVERVIEW OF THE INDIAN ECONOMY India is the world’s largest democracy by population with an estimated population size of 1.25 billion and a gross domestic product (“GDP”) in purchasing power parity terms of approximately US$8.027 trillion. As per the latest estimates available on the Index of Industrial Production (IIP), the General Index for the month of February 2016 stands at 184.60, which is 2.0% higher as compared to the level in the month of February 2015. The cumulative growth during April-February 2015-16 over the corresponding period of the previous year stands at 2.6%. The indices of Industrial Production for the mining, manufacturing and electricity sectors for the month of February 2016 stand at 136.10, 194.10 and 181.90 respectively, with the corresponding growth rates of 5.0%, 0.7% and 9.6%, as compared to February 2015. The cumulative growth in the three sectors during April-February 2015-16 over the corresponding period of 2014-15 has been 2.4%, 2.3% and 5.1% respectively. In terms of industries, sixteen (16) out of the twenty two (22) industry groups (as per 2-digit NIC-2004) in the manufacturing sector have shown positive growth during the month of February 2016 as compared to the corresponding month of the previous year. The Foreign Direct Investment (FDI) investment was USD 36,046 Million in FY 2013-14 and USD 44,291 Million in FY 2014-15 and USD 40,823 Million in April-December 2015 in FY 2015-16 as per provisional figures by RBI. The cumulative amount of FDI Equity Inflows from April 2000 to December 2015 stood at USD 277,954 Million. GLOBAL TEXTILE INDUSTRY OVERVIEW The current global garment market is estimated at approximately $1.5 trillion which form nearly 1.8 percent of the world GDP. Almost 75% of this market is concentrated in Europe, USA, China and Japan. An analysis of per capita spend on garment in various countries shows a significant difference between numbers in developed and developing economies. Within the major markets, India has the lowest per capita spend on garment ($37) which is only 3%of the highest one viz. Australia ($1,131). The top five textiles and garment exporting nations are China, India, Italy, Germany and Turkey. China is the single largest exporter with 39% share while India stood at a distant second place with 5% share. The top five textile and garmenting importing nations are US, China, Germany, Japan and United Kingdom. INDIAN TEXTILE INDUSTRY OVERVIEW India’s textiles sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to India’s exports with approximately 11 per cent of total exports. The textiles industry is also labour intensive and is one of the largest employers. The industry realised export earnings worth US$ 41.4 billion in 2014-15, a growth of 5.4 per cent, as per The Cotton Textiles Export Promotion Council (Texprocil). The textile industry has two broad segments. First, the unorganized sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale.

WOOL INDUSTRY In India Woollen textiles and clothing industry is relatively small compared to the cotton and man made fiber based textiles and clothing industry. However, the woollen sector plays an important role in linking the rural economy with the manufacturing industry, represented by small, medium and large scale units. The product portfolio is equally divergent from textile intermediaries to finished textiles, garments, knitwears, blankets, carpets and an incipient presence in technical textiles. Wool industry is a rural based export oriented industry and caters to civil and defence requirements for warmer clothing. SUMMARY OF OUR BUSINESS The Company operates in the worsted textiles segment and runs a fully equipped composite mill (ISO 9001 certified) manufacturing high quality worsted fabrics at Jamnagar, Gujarat. The worsted industry in the country comprises of a few mills in the organized sector and a number of units in the unorganized sector. Digjam has been a notable player in this industry in India. Its commitment to quality and customer orientation reflects in its strong nationally recognized and valuable brand DIGJAM, supported by a well-established national distribution network.

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Our Company was incorporated as Digjam Textiles Limited on June 17, 2015 under the Companies Act, 2013 with the Registrar of Companies, Ahmedabad. The Registered Office of the Company is situated at Aerodrome Road, Jamnagar, Gujarat – 361 006. The name of the Company has been changed from Digjam Textiles Limited to Digjam Limited with effect from March 23, 2016 pursuant to Scheme of Amalgamation between erstwhile Digjam Limited with Digjam Limited (formerly Digjam Textiles Limited) and their respective creditors and shareholders and the Certificate of Incorporation pursuant to the change of name issued by the Registrar of Companies. The Corporate Identification Number of our Company is U17123GJ2015PLC083569. Digjam has a proven track record of manufacture of high quality fabrics with attractive and latest designs. The Company consistently takes steps to push forward its marketing efforts by enhancing its brand visibility, strengthening marketing organization and closer interaction with and expansion of its channel partners. The Company has always laid stress on export markets and exploring new areas. It has an independent marketing team supported by an appropriate network abroad for export business. It exports a significant portion of its production to markets in Europe, USA, Canada, Middle East, Far East etc. The Company has received Oeko-Tex Certificate issued by Hohenstein Textiles Testing Institute of Germany, which certifies that the woolen and wool blended fabrics manufactured by the Company meet the human-ecological requirements of the standard established for products with direct contact to skin. We are the first worsted mill in India to get the aforesaid "Oeko-Tex" certification. Manufacturing facility At the composite Mills located at Jamnagar, Digjam uses latest production facilities to manufacture high quality fabrics. In the vertically integrated mills, greasy wool & polyester tow is converted into finished fabrics through the processes of scouring and combing, dyeing, spinning, weaving, mending and finishing. The installed capacity of the Mills is 14,800 spindles for yarn and 98 looms for weaving fabrics besides wool combing capacity of 13.05 lakh kgs. per annum as on March 31, 2016. The plant, spread over 28.5 acres, employs 235 staff members and a dedicated force of 781 skilled/semi-skilled workers on a permanent basis as on March 31, 2016.

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SUMMARY OF FINANCIAL STATEMENTS

The following summary of financial and operating information is derived from the financial statements of our Company for the period ended March 31, 2016 as described in the Report of M/s. Deloitte Haskins & Sells LLP, Chartered Accountants in the section titled “Financial Statements” on page 73 of the Information Memorandum.

Digjam Limited (formerly Digjam Textiles Limited)

Balance Sheet as at March 31, 2016

(Rs.) As at

Notes March 31,2016

EQUITY AND LIABILITIES

Shareholders’ Funds

Share Capital 3 -

Equity Share Capital Suspense 3 87,64,16,210 Preference Share Capital Suspense 3 5,00,00,000

Reserves and Surplus 4 36,44,05,679 Non-current Liabilities

Long Term Borrowings 5 9,18,75,206

Other Long Term Liabilities 6 2,25,75,500

Long Term Provisions – Employee benefits 3,54,82,229

Current Liabilities

Short Term Borrowings 7 43,95,78,462

Trade Payables 8

a. Total outstanding dues of Micro and Small Enterprises -

b. Total outstanding dues of creditors other than Micro and Small Enterprises

35,93,74,048

Other Current Liabilities 9 2,92,48,466

Short Term Provisions 10 1,85,44,301

Total 2,28,75,00,101

ASSETS

Non-current Assets

Fixed Assets

Tangible Assets 11a 1,78,23,63,322

Intangible Assets 11b 14,64,913

Long Term Loans and Advances 12 44,63,114

Current Assets

Inventories 13 32,62,23,345

Trade Receivables 14 13,12,82,639

Cash and Cash Equivalents 15 1,71,65,212

Short Term Loans and Advances 16 1,82,55,768

Other Current Assets 17 62,81,788

Total 2,28,75,00,101

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Statement of Profit and Loss

for the period 17.06.2015 to 31.03.2016 (Rs.)

Notes Period ended 31.03.2016

INCOME

Revenue from Operations 19 94,73,07,558

Other Income 20 68,13,054

95,41,20,612

EXPENSES

Cost of Materials Consumed 21 28,24,39,219

Purchase of Stock-in-Trade 22 14,41,03,354

Changes in Inventories (of Finished Goods, Work-in-progress and Stock-in-trade)

23 5,10,65,362

Employees Benefits Expense 24 18,21,27,372

Finance Costs 25 8,59,25,750

Depreciation and Amortisation Expense 11 2,17,18,257

Other Expenses 26 28,53,43,399

1,05,27,22,713

Loss before Tax (9,86,02,101)

Tax Expense -

Loss after Tax for the Period (9,86,02,101)

Earnings per Equity Share (Face Value – Rs. 10)

34

Basic and Diluted – Rs.: (1.13)

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Cash Flow Statement for the period 17.06.2015 to 31.03.2016 (Rs.)

Period ended 31.3.2016

A. Cash Flow from Operating Activities Net Loss before Tax (9,86,02,101) Adjusted for : Depreciation and Amortisation Expense 2,17,18,257 Finance Costs 8,59,25,750 Interest income (47,43,321) Loss on sale/discard of Fixed Assets 5,295 (Gain) on Foreign Exchange Fluctuation (unrealised) (6,716) Operating Profit before working capital changes 42,97,164 Adjustment for decrease in operating assets

Trade receivables 6,66,55,954

Loans & Advances 69,87,318 Other receivables 39,85,084 Inventories 8,31,26,962 Adjustment for (decrease)/ increase in operating liabilities Trade Payables (6,46,24,830) Other current liabilities 27,50,409 Cash generated from operations 10,31,78,061 Direct taxes 3,84,834 Net Cash from Operating Activities … (A) 10,35,62,895 B. Cash Flow from Investing Activities Capital Expenditure on Purchase of Fixed Assets (6,48,873) Proceeds from Sale of Fixed Assets 38,150 Bank Balances not considered as Cash and Cash Equivalents – Matured 30,35,636 Interest received 47,43,321 Net Cash from Investing Activities … (B) 71,68,234 C. Cash Flow from Financing Activities Repayment of Long Term Borrowings (72,67,211) Repayment of Short Term Borrowings 2,60,02,873 Repayment of Borrowings (net) (1,87,35,662) Interest and Financial Charges (9,27,24,063) Proceeds from Issue of Equity Shares (refer note 1C) 5,00,000 Net Cash (used) in Financing Activities … (C) (11,09,59,725) Net increase/ (decrease) in Cash and Cash Equivalents (A+B+C) (2,28,596) Cash and Cash Equivalents(Opening Balance) - Add: Pursuant to Scheme of Amalgamation (refer note 1C) 39,08,708 Cash and Cash Equivalents(Closing Balance) (refer note 15(A)) 36,80,112

Notes : 1. Cash and Cash Equivalents (Refer Note No. 15A) includes foreign exchange fluctuation (unrealised) in bank

balance in foreign exchange – Rs. (746) 2. Cash Flow Statement has been prepared as per the indirect method set out in Accounting Standard-3 “Cash

Flow Statements”. 3. 4.

For non-cash transactions relating to investing and financing activities pursuant to the Scheme refer Note 1B. Cash flows have been adjusted for the balances transferred from the amalgamated company.

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GENERAL INFORMATION

Our Company was incorporated as Digjam Textiles Limited on June 17, 2015 under the Companies Act, 2013 with the Registrar of Companies, Ahmedabad. The name of our Company was changed to Digjam Limited with effect from March 23, 2016. The Corporate Identification Number of our Company is U17123GJ2015PLC083569. Registered Office & Factory Aerodrome Road Jamnagar, Gujarat - 361 006 Tel.: +91 288 2712 972 - 73 Fax: +91 288 2712 991 Registrar of Companies Registrar of Companies, Ahmedabad, ROC Bhavan, Opp Rupal Park Society, Behind Ankur Bus Stop, Naranpura, Ahmedabad - 380 013 Ph +91 79 27437597 Board of Directors of our Company

Sr. No.

Name & Designation Age (in years)

DIN Status

1. Sri Sidharth Kumar Birla 58 00004213 Chairman

2. Sri Bharat Anand 39 02806475 Director

3. Ms. Meenakshi Birla 31 00019582 Director

4. Sri Golam Momen 82 00402662 Director

5. Sri Arun Charan Mukherji 90 00063975 Director

6. Sri Ragothaman Sethumadhava Rao 70 00042395 Director

7. Sri Champa Lal Rathi 70 00012392 Director

8. Sri Chandrasekharan Bhaskar 61 00003343 Managing Director

For details of our Directors, refer to section titled “Our Management” on page 58 of the Information Memorandum.

Compliance Officer Sri Jatin Jain Company Secretary Tel.: +91 288 2712 972/73 Fax: +91 288 2712 991 Email: investors@digjam.co.in Website: www.digjam.co.in

Chief Financial Officer

Sri Satish Shah Chief Financial Officer Tel.: +91 288 2712 972/73 Fax: +91 288 2712 991 Email: accounts.jamnagar@digjam.co.in

Registrar and Share Transfer Agent MCS Share Transfer Agent Limited SEBI Regn. No.: INR000004108 12/1/5, Manoharpukur Road, Kolkata, West Bengal,700026 Ph. +91 33 40724051/4052/4053 Fax. +91 33 40724050 Email : mcssta@rediffmail.com Website: www.mcsdel.com Contact Person: Mr. Partha Mukherjee, Assistant Manager

21

Bankers to our Company UCO Bank Digjam Branch, Aerodrome Road Jamnagar - 361006 Tel: 91 288 2711050 Fax: 91 288 2711050 Email: digjam@ucobank.co.in Website: www.ucobank.com Contact Person: Mr. Vimal Jain

State Bank of India Digvijay Plot Jamnagar - 361 005 Tel: 91 288 25565914 Fax: 91 288 2565412 Email: sbi.60087@sbi.co.in Website: www.sbi.co.in Contact Person: Mr. Sunilkumar M Dave

HDFC Bank Limited Kuber Shop no. 1, Ground floor, Park Colony Opp. Jogger’s Park, Jamnagar - 361 008 Tel: 91 288 2912177 Fax: 91 288 2912177 Email: niraj.dattani@hdfcbank.com Website: www.hdfcbank.com Contact Person: Mr. Niraj Dattani

Auditors to our Company Deloitte Haskins & Sells LLP 19th Floor, ‘Shapath-V’, S.G. Highway, Ahmedabad 380 015

Registration No. 117365W / W-100018 Tel : 91-79-66827300 Email Id : kraval@deloitte.com Authority of Listing The Hon’ble High Court of Gujarat vide its Order dated February 17, 2016 (certified copy received by the Company on March 11, 2016) has approved the Scheme of Amalgamation between erstwhile Digjam Limited with Digjam Limited (formerly Digjam Textiles Limited) and their respective Shareholders and Creditors for transfer and vesting of undertakings of Digjam Limited (Amalgamating Company) into Digjam Textiles Limited (Amalgamated Company) under Sections 391 to 394 of the Companies Act, 1956. For more details relating to the Scheme of Amalgamation please refer to the Section titled “Scheme of Amalgamation” of this Information Memorandum. In accordance with the said Scheme, the equity shares of our Company issued pursuant to the Scheme shall be listed and admitted to trading on the NSE and BSE. Such listing and admission for trading is not automatic and is subject to fulfillment by the Company of the criteria of NSE and BSE and also subject to such other terms and conditions as may be prescribed by NSE and BSE at the time of application by our Company seeking listing. Our Company has received no objection from NSE and BSE in relation to listing of equity shares issued pursuant to the Scheme of Amalgamation vide their letters dated October 16, 2015 & October 19, 2015 respectively.

Eligibility Criterion There being no Initial public offering or rights issue, the eligibility criteria in terms of Chapter III of SEBI (ICDR) Regulations, 2009 do not become applicable; however, SEBI vide its circular SEBI/CIR/CFD/DIL/5/2013 dated February 4, 2013 read with circular no. CIR/CFD/DIL/8/2013 dated May 21, 2013, has subject to certain conditions permitted unlisted issuer companies to make an application for relaxing from the strict enforcement of Rule 19 (2) (b) of SCRR, as amended. Our Company has submitted its Information Memorandum, containing information about itself, making disclosure in line with the disclosure requirement for public issues as applicable to NSE and BSE for making the said Information Memorandum available to public through websites viz. www.nseindia.com and www.bseindia.com. Our Company has made the said Information Memorandum available on its website www.digjam.co.in. Our Company will publish an advertisement in the news papers containing its details in line with the details required as per the above mentioned circular. The advertisement will draw specific reference to the availability of this Information Memorandum on its website.

22

Prohibition by SEBI The Company, its directors, its promoter, other companies promoted by the promoter and companies with which the Company’s directors are associated as director have not been prohibited from accessing the capital market under any order or direction passed by SEBI. General Disclaimer from the Company The Company accepts no responsibility for statements made otherwise than in the Information Memorandum or in the advertisements published in terms of SEBI Circular SEBI/CFD/DIL/5/2013 or any other material issued by or at the instance of the Company and anyone placing reliance on any other source of information would be doing so at his or her own risk. All information shall be made available by the Company to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner.

23

CAPITAL STRUCTURE

The Capital Structure of our Company - Pre Scheme of Amalgamation:

Particulars Aggregate Nominal Value (`)`)`)`)

Authorized Share Capital 50,000 Equity Shares of face value of ` 10 each

500,000

Issued, Subscribed and paid-up share capital 50,000 Equity Shares of ` 10each

500,000

Note: The entire subscribed Share Capital was held by the holding company, the erstwhile Digjam Limited and its nominees. Pursuant to the Scheme becoming effective and issue of Shares by the Amalgamated Company, the aforesaid shares stand cancelled. The Capital Structure of our Company- Post Scheme of Amalgamation:

Particulars Aggregate Nominal Value (`)`)`)`)

Authorized Share Capital 10,00,50,000 Equity Shares of face value of ` 10 each 25,00,000 8% Non-convertible Preference Shares of ` 100 each

1,00,05,00,000

25,00,00,000

Issued, Subscribed and paid-up share capital 8,76,41,621Equity Shares of ` 10 each 5,00,000 8% Non-convertible Preference Shares of ` 100 each

87,64,16,210

5,00,00,000

Notes to the Capital Structure:

1. Changes in Authorised Share Capital The details of changes in authorised share capital of our Company since Incorporation are as follows:

(in `, except share data) Date Nature of

Change Particulars

Cumulative

No. of Equity Shares

Face Value

(`̀̀̀)

Cumulative no. of

Preference Shares

Face Value

(`̀̀̀)

Authorised Share

Capital (in `̀̀̀)

June 17, 2015

Incorporation ` 500,000/- 50,000 10 - - 500,000

March 17, 2016

Increase pursuant to the Scheme

From ` 5,00,000/- to ` 1,25,05,00,000/-

10,00,50,000 10 25,00,000 100 1,25,05,00,000

2. Equity Share Capital History

(in `, except share data) Date of

Allotment No. of Equity Shares

Cumulative No. of Equity Shares

Face Value (in `̀̀̀)

Issue Price (in `̀̀̀)

Cumulative Paid up

Capital (in `̀̀̀)

Cumulative Securities Premium Account

Nature of consider-

ation

Category of Allottees

On Incorporation

50,000 50,000 10 10 5,00,000 - Cash Subscribers to MOA

March 17, 2016

(50,000) Nil 10 10 Nil - NA Cancellation of existing Equity

Shares pursuant to Scheme

April 29, 2016 8,76,41,621 8,76,41,621 10 15 87,64,16,210 43,82,08,105 Other than cash

Allotment pursuant to the Scheme

Equity shares each of the face value of ` 10 have been allotted at a premium of ` 5 per equity share in terms of Scheme approved under sections 391-394 of the Companies Act, 1956. Details of the Scheme have been provided under section titled “Scheme of Amalgamation” on page 36 of the Information Memorandum. 3. Preference Share Capital History

(in `, except share data) Date of

Allotment No. of

Preference Shares

Cumulative No. of

Preference Shares

Face Value (in `̀̀̀)

Issue Price (in `̀̀̀)

Cumulative Paid up

Capital (in `̀̀̀)

Cumulative Securities Premium Account

Nature of consider-

ation

Category of Allottees

April 29, 2016 5,00,000 5,00,000 100 100 5,00,00,000 - Other than cash

Allotment pursuant to the Scheme

24

4. Our Shareholding Pattern of our Company before and after the Scheme of Arrangement:

The table below presents our shareholding pattern before the Effective Date Table I: Summary statement holding of specified securities

Cate-gory

Category of shareholders

No. of share-

holders

No. of fully paid up Equity

Shares held

No. of partly paid up

Equity Shares

held

No. of shares

underlying Depository

Receipts

Total no. of shares held

Share-holding as a %age of total no. of

shares (calculated

as per SCRR, 1957)

No. of voting rights held in each class of securities

No. of shares

underlying outstanding convertible securities (including warrants)

Shareholding as %

assuming full conversion of convertible

securities (as a % of diluted share capital)

No. of locked in shares No. of shares pledged No. of Equity Shares held in dematerialised

form

(as a % of (A+B+C)

No. of voting rights Total as % of

(A+B+C)

No. (a) As a % of total shares

held (b)

No. (a) As a % of total shares

held (b)

(I) (II) (III) (IV) (V) (VI) (VII) = IV + V + VI

(VIII) Class X Class Y

Total (IX) (X) (XI) = (VII) + (X) as a % of

(A+B+C)

(XII) (XIII) (XIV)

(A) Promoter & Promoter Group

7 50,000 - - 50,000 100.00 50,000 - 50,000 100.00 - - - - - - -

(B) Public - - - - - N.A - - - N.A - - - - - - -

(C) Non promoter non public

- - - - - N.A - - - N.A - - - - - - -

(C1) Shares underlying DRs

- - - - - N.A - - - N.A - - - - - - -

(C2) Shares held by Employee trust

- - - - - N.A - - - N.A - - - - - - -

Total 7 50,000 - - 50,000 100.00 50,000 - 50,000 100.00 - - - - - - -

25

Table II: Statement showing shareholding pattern of the Promoter and Promoter Group Cate-

gory

Category of share-holders PAN No. of

share-

holders

No. of fully

paid up Equity

Shares held

No. of

partly

paid up

Equity

Shares

held

No. of

shares

underlying

Depository

Receipts

Total no. of

shares held

Share-holding

as a %age of

total no. of

shares

(calculated as

per SCRR,

1957)

No. of voting rights held in each

class of securities

No. of

shares

underlying

outstanding

convertible

securities

(including

warrants)

Shareholding

as % assuming

full

conversion of

convertible

securities (as

a % of diluted

share capital)

No. of locked in

shares

No. of shares

pledged

No. of Equity

Shares held in

dematerialised

form

(as a % of

(A+B+C)

No. of voting rights Total as %

of

(A+B+C)

No.

(a)

As a % of

total

shares

held (b)

No.

(a)

As a % of

total

shares

held (b)

(I) (II) (III) (IV) (V) (VI) (VII) = IV + V

+ VI

(VIII) Class X Class

Y

Total (IX) (X) (XI) = (VII) +

(X) as a % of

(A+B+C)

(XII) (XIII) (XIV)

A(1) Indian

(a) Individuals * 6 6 0.01 - 6 6 - 6 0.01 - - - - - - -

Chandrasekharan Bhaskar 1 0.002 - 1 1 - 1 0.002 - - - - - - -

Satish Shah 1 0.002 - 1 1 - 1 0.002 - - - - - - -

Sunil Kumar Gupta 1 0.002 - 1 1 - 1 0.002 - - - - - - -

Divyesh Mansukhbhai Vasoya 1 0.002 1 1 1 0.002 - - -

Jatin Jain 1 0.002 1 1 1 0.002 - - -

Ravindran Kunjunni Nair 1 0.002 - 1 1 - 1 0.002 - - - - - - -

(b) Central Govt / State Govt - - - - - - - - - - - - - - - -

(c) Financial Institutions / Banks - - - - - - - - - - - - - - - -

(d) Any other Bodies Corporate 1 49,994 - - 49.994 49.994 - 49.994 99.99 - - - - - - -

Digjam Limited 49.994 - - 49.994 49.994 - 49.994 99.99 - - - - - - -

Sub-total A(1) 7 50,000 - - 50,000 50,000 - 50,000 100.00 - - - - - - -

A(2) Foreign - - - - - - - - - - - - - - - -

(a) Individuals (Non resident

Individuals / Foreign

Individuals)

- - - - - - - - - - - - - - - -

(b) Government - - - - - - - - - - - - - - - -

(c) Institutions - - - - - - - - - - - - - - - -

(d) Foreign Portfolio Investors - - - - - - - - - - - - - - - -

(e) Any others (Foreign Bodies

Corporate)

- - - - - - - - - - - - - - - -

Sub-total A(2) - - - - - - - - - - - - - - - -

Total shareholding of

Promoter & Promoter Group

(A) = (A)(1) + (A)(2)

7 50,000 - - 50,000 50,000 - 50,000 100.00 - - - - - - -

* Nominees of erstwhile Digjam Limited

26

Table III: Statement showing shareholding pattern of public shareholder Cate-gory

Category of share-holders PAN No. of share-

holders

No. of fully paid up

Equity Shares held

No. of partly paid up

Equity Shares

held

No. of shares

underlying Depository

Receipts

Total no. of shares held

Share-holding as a %age of total no. of

shares (calculated

as per SCRR, 1957)

No. of voting rights held in each class of securities

No. of shares

underlying outstandin

g convertible securities (including warrants)

Shareholding as %

assuming full

conversion of

convertible securities (as a % of

diluted share

capital)

No. of locked in shares

No. of shares pledged

No. of Equity Shares held

in dematerialise

d form

(as a % of (A+B+C)

No. of voting rights Total as % of

(A+B+C)

No. (a)

As a % of total shares

held (b)

No. (a)

As a % of total shares

held (b)

(I) (II) (III) (IV) (V) (VI) (VII) = IV + V + VI

(VIII) Class X Class Y

Total (IX) (X) (XI) = (VII) + (X) as a % of (A+B+C)

(XII) (XIII) (XIV)

1 Institutions

(a) Mutual Funds - - - - - - - - - - - - - - - - - -

(b) Venture Capital Fund - - - - - - - - - - - - - - - - - -

( c ) Alternate Investment Fund - - - - - - - - - - - - - - - - - -

(d) Foreign venture capital investor - - - - - - - - - - - - - - - - - -

(e) Foreign portfolio investor - - - - - - - - - - - - - - - - - -

(f) Financial Institutions / Banks - - - - - - - - - - - - - - - - - -

(g) Insurance Companies - - - - - - - - - - - - - - - - - -

(h) Provident funds / pension funds - - - - - - - - - - - - - - - - - -

(i) Any other ( Foreign Institutional Investors)

- - - - - - - - - - - - - - - - - -

Sub Total (B)(1) - - - - - - - - - - - - - - - - - - 2 Central government / state government /

President of India - - - - - - - - - - - - - - - - - -

Sub Total (B)(2) - - - - - - - - - - - - - - - - - -

3 Non Institutions

(a) Individual shareholders holding nominal share capital upto ` 2.00 lac

- - - - - - - - - - - - - - - - - -

Individual shareholders holding nominal share capital in excess of ` 2.00 lac

- - - - - - - - - - - - - - - - - -

(b) NBFC registered with RBI - - - - - - - - - - - - - - - - - -

( C) Employees Trusts - - - - - - - - - - - - - - - - - -

(d) Overseas Depositories (holding DR) balancing figure

- - - - - - - - - - - - - - - - - -

(e) Any other

Sub Total (B)(3) - - - - - - - - - - - - - - - - - -

Total public shareholding (B) = (B)(1)+(B)(2)+(B)(3)

- - - - - - - - - - - - - - - - - -

27

Table IV: Statement showing shareholding pattern of Non promoter Non public shareholder Cate-gory

Category of share-holders PAN No. of share-

holders

No. of fully paid up

Equity Shares held

No. of partly paid up

Equity Shares

held

No. of shares

underlying Depository

Receipts

Total no. of shares held

Share-holding as a %age of total no. of

shares (calculated

as per SCRR, 1957)

No. of voting rights held in each class of securities

No. of shares

underlying

outstanding

convertible

securities (includin

g warrants

)

Shareholding as %

assuming full

conversion of

convertible securities (as a % of

diluted share

capital)

No. of locked in shares

No. of shares pledged

No. of Equity Shares held

in dematerialise

d form

(as a % of (A+B+C)

No. of voting rights Total as % of

(A+B+C)

No. (a) As a % of total shares

held (b)

No. (a) As a % of total shares

held (b)

(I) (II) (III) (IV) (V) (VI) (VII) = IV + V + VI

(VIII) Class X Class Y

Total (IX) (X) (XI) = (VII) + (X) as a % of (A+B+C)

(XII) (XIII) (XIV)

1 Custodian / DR Holder

(a) Name of DR Holder (if any) - - - - - - - - - - - - - - - - - -

2 Employees benefit trust (under SEBI (Share based employee benefit) Regulations, 2014

- - - - - - - - - - - - - - - - - -

(b) Total non promoter non public shareholding (C) = (C)(1) + (C)(2)

- - - - - - - - - - - - - - - - - -

28

The tables below present our shareholding pattern after allotment pursuant to the Scheme Table I: Summary statement holding of specified securities

Cate-gory

Category of shareholders

No. of share-

holders

No. of fully paid up Equity

Shares held

No. of partly paid up

Equity Shares

held

No. of shares underlying Depository

Receipts

Total no. of shares held

Share-holding as a %age of total no. of

shares (calculated

as per SCRR, 1957)

No. of voting rights held in each class of securities No. of shares

underlying

outstanding

convertible

securities (including warrants)

Shareholding as %

assuming full conversion of convertible

securities (as a % of diluted share capital)

No. of locked in shares

No. of shares pledged No. of Equity Shares held in dematerialised

form

(as a % of (A+B+C)

No. of voting rights Total as % of

(A+B+C)

No. (a)

As a % of total shares

held (b)

No. (a) As a % of total shares

held (b)

(I) (II) (III) (IV) (V) (VI) (VII) = IV + V + VI

(VIII) Class X Class Y

Total (IX) (X) (XI) = (VII) + (X) as a % of

(A+B+C)

(XII) (XIII) (XIV)

(A) Promoter & Promoter Group

11 3,85,65,470 - - 3,85,65,470 44.00 3,85,65,470 - 3,85,65,470 44.00 - - - - 36,00,205 9.34 3,85,65,470

(B) Public 74,919 4,90,76,151 - - 4,90,76,151 56.00 4,90,76,151 - 4,90,76,151 56.00 - - - - NA NA 4,80,40,531

(C) Non promoter non public

- - - - - N.A - - - N.A - - - - NA NA

(C1) Shares underlying DRs

- - - - - N.A - - - N.A - - - - NA NA

(C2) Shares held by Employee trust

- - - - - N.A - - - N.A - - - - NA NA

Total 74,930 8,76,41,621 - - 8,76,41,621 100.00 8,76,41,621 - 8,76,41,621 100.00 - - - - 36,00,205 4.11 8,66,06,001

29

Table II: Statement showing shareholding pattern of the Promoter and Promoter Group

Cate-gory

Category of share-holders

PAN No. of share-

holders

No. of fully paid up

Equity Shares held

No. of partly paid up

Equity Shares

held

No. of shares

underlying Depository

Receipts

Total no. of shares held

Share-holding as a %age of total no. of

shares (calculated

as per SCRR, 1957)

No. of voting rights held in each class of securities

No. of shares

underlying

outstanding

convertible

securities (includin

g warrants

)

Shareholding as %

assuming full

conversion of

convertible securities (as a % of

diluted share

capital)

No. of locked in shares

No. of shares pledged

No. of Equity Shares held

in dematerialise

d form

(as a % of (A+B+C)

No. of voting rights Total as % of

(A+B+C)

No. (a) As a % of total shares

held (b)

No. (a) As a % of total shares

held (b)

(I) (II) (III) (IV) (V) (VI) (VII) = IV + V + VI

(VIII) Class X Class Y

Total (IX) (X) (XI) = (VII) + (X) as a % of (A+B+C)

(XII) (XIII) (XIV)

A(1) Indian

(a) Individuals / HUF 2 87,589 - - 87,589 0.10 87,589 - 87,589 0.10 - - - - 25,120 28.68 87,589

S K Birla AEKPB3108A 37,589 - - 37,589 0.04 37,589 - 37,589 0.04 - - - - 23,290 63.64 37,589

Sidharth Kumar Birla AEKPB3109B 50,000 - - 50,000 0.06 50,000 - 50,000 0.06 - - - - 1,200 2.40 50,000

Smt. Sumangala Birla AEFPB2335A - - - - - - - - - - - - - - - - -

Smt. Madhushree Birla ADLPB0310L - - - - - - - - - - - - - - - - -

(b) Central Govt / State Govt

- - - - - - - - - - - - - - - - - -

(c) Financial Institutions / Banks

- - - - - - - - - - - - - - - - - -

(d) Any other Bodies Corporate

9 3,84,77,881 - - 3,84,77,881 43.90 3,84,77,881 - 3,84,77,881 43.90 - - - - 35,75,085 9.29 3,84,77,881

Central India General Agents Limited

AABCC2197E 1,65,14,000 - - 1,65,14,000 18.84 1,65,14,000 - 1,65,14,000 18.84 - - - - 21,09,351 12.77 1,65,14,000

iPro Capital Limited AAECS8405N 70,00,000 - - 70,00,000 7.99 70,00,000 - 70,00,000 7.99 - - - - - - 70,00,000

Birla Holdings Limited

AABCG0768R 72,50,000 - - 72,50,000 8.27 72,50,000 - 72,50,000 8.27 - - - - - - 72,50,000

Janardhan Trading Co. Limited

AABCJ3242P 19,00,000 - - 19,00,000 2.17 19,00,000 - 19,00,000 2.17 - - - - 11,75,362 61.86 19,00,000

Birla Eastern Limited AABCB3340C 9,26,000 - - 9,26,000 1.05 9,26,000 9,26,000 1.05 2,90,372 31.36 9,26,000

Sukriti Education Society

AABTS5866R 48,09,881 - - 48,09,881 5.49 48,09,881 - 48,09,881 5.49 - - - - - - 48,09,881

Sushila Birla Memorial Institute

AABTS5863L 78,000 - - 78,000 0.09 78,000 - 78,000 0.09 - - - - - - 78,000

Nathdwara Investment Co. Limited

AABCN7830P - - - - - - - - - - - - - - - - -

Sub-total A(1) 11 3,85,65,470 - - 3,85,65,470 44.00 3,85,65,470 - 3,85,65,470 44.00 - - - - 36,00,205 9.34 3,85,65,470

- - - - - - - - - - - - - - - - -

A(2) Foreign - - - - - - - - - - - - - - - - -

30

(a) Individuals (NRIs/

Foreign Individuals)

- - - - - - - - - - - - - - - - -

(b) Government - - - - - - - - - - - - - - - - -

(c) Institutions - - - - - - - - - - - - - - - - -

(d) Foreign Portfolio Investors

- - - - - - - - - - - - - - - - -

(e) Any others (Foreign Bodies Corporate)

- - - - - - - - - - - - - - - - -

Sub-total A(2) - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - -

Total shareholding of Promoter and Promoter Group (A) = (A)(1) + (A)(2)

11 3,85,65,470 - - 3,85,65,470 44.00 3,85,65,470 - 3,85,65,470 44.00 - - - - 36,00,205 9.34 3,85,65,470

31

Table III: Statement showing shareholding pattern of public shareholder

Cate-gory

Category of share-holders

PAN No. of share-holders

No. of fully paid up

Equity Shares held

No. of partly paid up

Equity Shares

held

No. of shares

underlying Depository

Receipts

Total no. of shares held

Share-holding as a %age of total no. of

shares (calculated

as per SCRR, 1957)

No. of voting rights held in each class of securities

No. of shares

underlying

outstanding

convertible

securities (includin

g warrants

)

Shareholding as %

assuming full

conversion of

convertible securities (as a % of

diluted share

capital)

No. of locked in shares

No. of shares pledged

No. of Equity Shares held in dematerialised

form

(as a % of (A+B+C)

No. of voting rights Total as % of

(A+B+C)

No. (a)

As a % of total shares

held (b)

No. (a)

As a % of total shares

held (b)

(I) (II) (III) (IV) (V) (VI) (VII) = IV + V + VI

(VIII) Class X Class Y

Total (IX) (X) (XI) = (VII) + (X) as a % of (A+B+C)

(XII) (XIII) (XIV)

1 Institutions

(a) Mutual Funds 3 740 - - 740 0.00 740 - 740 0.00 - - - - - - 740

(b) Venture Capital Fund

( c ) Alternate Investment Fund

(d) Foreign venture capital investor

(e) Foreign portfolio investor

(f) Financial Institutions / Banks

38 90,25,136 - - 90,25,136 10.30 90,25,136 - 90,25,136 10.30 - - - - - - 90,05,741

ICICI Bank Limited AAACI1195H 87,63,381 87,63,381 10.00 87,63,381 87,63,381 10.00 - - - - - - 87,63,381

Others 2,61,755 2,61,755 0.30 2,61,755 2,61,755 0.30 - - - - - - 2,42,360

(g) Insurance Companies 3 12,33,227 - - 12,33,227 1.41 12,33,227 - 12,33,227 1.41 - - - - - - 12,33,227

Life Insurance Corporation of India

AAACL0582H 11,27,223 - 11,27,223 1.29 11,27,223 11,27,223 1.29 - - - - - - 11,27,223

Others 1,06,004 - 1,06,004 0.12 1,06,004 1,06,004 0.12 - - - - - - 1,06,004

(h) Provident funds / pension funds

- - - - - - - - - - - - - - - - -

(i) Any other ( Foreign Institutional Investors)

- - - - - - - - - - - - - - - - N.A.

Sub Total (B)(1) 44 1,02,59,103 - - 1,02,59,103 11.71 1,02,59,103 - 1,02,59,103 11.71 - - - - - - 1,02,39,708

2 Central government / state government / President of India

1 12,34,744 - - 12,34,744 1.41 12,34,744 - 12,34,744 1.41 - - - - - - 12,34,744

Gujarat State Investments Limited

AABCG4649M

12,34,744 - - 12,34,744 1.41 12,34,744 12,34,744 1.41 - - - - - - 12,34,744

Sub Total (B)(2) 1 12,34,744 - - 12,34,744 1.41 12,34,744 - 12,34,744 1.41 - - - - - - 12,34,744

3 Non Institutions - - - - - - - - - - - - - - - -

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(a) Individual shareholders holding nominal share capital upto ` 2.00 lac

72,641 2,60,21,687 - - 2,60,21,687 29.69 2,60,21,687 - 2,60,21,687 29.69 - - - - - - 2,50,72,490

Individual shareholders holding nominal share capital in excess of ` 2.00 lac

131 63,52,627 - - 63,52,627 7.25 63,52,627 - 63,52,627 7.25 - - - - - - 63,52,627

(b) NBFC registered with RBI

- - - - - - - - - - - - - - - - N.A.

( C) Employees Trusts - - - - - - - - - - - - - - - - N.A.

(d) Overseas Depositories (holding DR) balancing figure

- - - - - - - - - - - - - - - - N.A.

(e) Any other 2,102 52,07,990 - - 52,07,990 5.94 52,07,990 - 52,07,990 5.94 - - - - - - 51,40,962

Corporate bodies 44,75,680 - - 44,75,680 5.11 44,75,680 - 44,75,680 5.11 - - - - - - 44,60,817

Directors and Relatives 16,235 - - 16,235 0.02 16,235 - 16,235 0.02 - - - - - - 16,235

Trusts 2,035 - - 2,035 0.00 2,035 - 2,035 0.00 - - - - - - 2,035

Digjam Limited Unclaimed Suspense Account

1,61,426 - - 1,61,426 0.18 1,61,426 - 1,61,426 0.18 - - - - - - 1,61,426

Non Resident Individuals

5,52,614 - - 5,52,614 0.63 5,52,614 - 5,52,614 0.63 - - - - - - 5,00,449

Sub Total (B)(3) 74,874 3,75,82,304 - - 3,75,82,304 42.88 3,75,82,304 - 3,75,82,304 42.88 - - - - - - 3,65,66,079

Total public shareholding (B) = (B)(1)+(B)(2)+ (B)(3)

74,919 4,90,76,151 - - 4,90,76,151 56.00 4,90,76,151 - 4,90,76,151 56.00 - - - - - - 4,80,40,531

Note : 21 Equity Shares in physical form appear in the name of Smt. Sumangala Birla of the Promoter Group but are not forming part of the declared share holdings of the Promoters Group since the same were sold long back by Smt. Sumangala Birla but not lodged for transfer with erstwhile Digjam Limited till date.

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Table IV: Statement showing shareholding pattern of Non promoter Non public shareholder

Cate-gory

Category of share-holders PAN No. of share-

holders

No. of fully paid up Equity

Shares held

No. of partly paid up

Equity Shares

held

No. of shares

underlying Depository

Receipts

Total no. of shares held

Share-holding as a %age of total no. of

shares (calculated

as per SCRR, 1957)

No. of voting rights held in each class of securities

No. of shares

underlying outstandin

g convertible securities (including warrants)

Shareholding as %

assuming full

conversion of

convertible securities (as a % of

diluted share

capital)

No. of locked in shares No. of shares pledged No. of Equity Shares held

in dematerialise

d form

(as a % of (A+B+C)

No. of voting rights Total as % of

(A+B+C)

No. (a) As a % of total shares

held (b)

No. (a) As a % of total shares

held (b)

(I) (II) (III) (IV) (V) (VI) (VII) = IV + V + VI

(VIII) Class X Class Y

Total (IX) (X) (XI) = (VII) + (X) as a % of (A+B+C)

(XII) (XIII) (XIV)

1 Custodian / DR Holder

(a) Name of DR Holder (if any) - - - - - - - - - - - - - - - N.A. N.A. -

2 Employees benefit trust (under SEBI (Share based employee benefit) Regulations, 2014

- - - - - - - - - - - - - - - N.A. N.A. -

(b) Total non promoter non public shareholding (C) = (C)(1) + (C)(2)

- - - - - - - - - - - - - - - N.A. N.A. -

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5. Equity Shares held by Top Ten Shareholders (a) Our top ten shareholders and the number of Equity Shares of ` 10 each held by them as on the date of the

Information Memorandum is as follows: S. No. Name of the Shareholders No. of Equity Shares % of total Shareholding

1 Central India General Agents Limited 165,14,000 18.84

2 ICICI Bank Limited 87,63,381 10.00

3 Birla Holdings Limited 72,50,000 8.27

4 iPro Capital Limited 70,00,000 7.99

5 Sukriti Education Society 48,09,881 5.49

6 Janardhan Trading Company Limited 19,00,000 2.17

7 Gujarat State Investments Limited 12,34,744 1.41

8 Life Insurance Corporation Of India 11,27,223 1.29

9 Birla Eastern Limited 9,26,000 1.06

10 Viivek Madanlal Jain HUF 5,00,000 0.57

Total 500,25,229 57.09

(b) Our top ten shareholders and the number of Equity Shares of ` 10 each held by them prior 10 days of the

Information Memorandum is as follows: S. No. Name of the Shareholders No. of Equity Shares % of total Shareholding

1 Central India General Agents Limited 165,14,000 18.84

2 ICICI Bank Limited 87,63,381 10.00

3 Birla Holdings Limited 72,50,000 8.27

4 iPro Capital Limited 70,00,000 7.99

5 Sukriti Education Society 48,09,881 5.49

6 Janardhan Trading Company Limited 19,00,000 2.17

7 Gujarat State Investments Limited 12,34,744 1.41

8 Life Insurance Corporation Of India 11,27,223 1.29

9 Birla Eastern Limited 9,26,000 1.06

10 Viivek Madanlal Jain HUF 5,00,000 0.57

Total 500,25,229 57.09

6. Our Promoter, Promoter Group and Directors & their relatives have not sold or purchased any shares of our

Company during the period of six months preceding the date of the Information Memorandum. It may, however, be noted that Sri S. Ragothaman, Director of erstwhile Digjam Limited and also the Company and his spouse, Smt. Usha Ragothaman had undertaken the following transactions in the shares of erstwhile Digjam Limited:

Date of transaction

Name of Seller Nature of transaction

No. of shares

Consideration (`̀̀̀ in lakhs)

January 05, 2016 Sri S Ragothaman Market Sale 25,000 4.32

January 05, 2016 Smt. Usha Ragothaman Market Sale 30,000 5.18

7. Our Promoter, Promoter Group, Directors and their relatives and Directors of the Promoter have not

financed the purchase by any other person of the Equity Shares of our Company during the period of six months immediately preceding the date of the Information Memorandum.

8. As on the date of the Information Memorandum, there are no outstanding warrants, options or rights to

convert debentures, loans or other instruments.

9. As on the date of the Information Memorandum, the issued capital of our Company is fully paid up. 10. 36,00,205 Equity Shares held by the Promoter are pledged with Banks as collateral security for the loans

availed by erstwhile Digjam Limited. By virtue of the Scheme of Amalgamation, the said loans are now appearing in the books of Digjam Limited. For details, refer to the Shareholding Pattern of the Company on page 28 of the Information Memorandum.

11. Neither we, nor our Directors, Promoter, Promoter Group Entities have entered into any buyback and / or

standby arrangements and / or similar arrangements for the purchase of our Equity Shares from any person.

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12. Neither we nor the Amalgamating Company have any Employees Stock Option Scheme or Employees Stock Purchase Scheme

13. As on the date of the Information Memorandum, we have 74,930 members.

14. There shall be only one denomination for the Equity Shares of the Company, subject to applicable

regulations and Company shall comply with such disclosure and accounting norms specified by SEBI, from time to time.

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SCHEME OF AMALGAMATION

For definitions of the terms used herein if not defined, you may refer to the Scheme of Amalgamation.

Rationale for the Scheme: The Scheme provides for the amalgamation of erstwhile Digjam Limited with Digjam Limited (formerly Digjam Textiles Limited) pursuant to Sections 391 to 394 and other applicable provisions of the Companies Act, 1956, including the corresponding provisions of the Companies Act, 2013 as and when they are notified and become applicable, with a view to achieve the following: a. Greater financial strength and flexibility for the amalgamated entity, which would result in maximising

overall shareholder value, and improve the economic and competitive position of the combined entity. b. Opportunities to strengthen leverage for raising resources to finance business needs and strengthen the

financial position of the combined entity for future growth and expansion and to create a business structure, which is geared to take advantage of possible growth opportunities.

c. Achieve greater efficiencies in operations with optimum utilization of resources, better administration and reduced cost. Increased cost savings are expected to flow from focused operational efforts, rationalization, standardisation and simplification of business processes and optimum rationalization of administrative expenses and utilization of human resources.

d. Additional thrust to the Amalgamated Company in terms of offering an optimum financial and capital structure resulting in better ability to leverage resources for growth and expansion.

e. Better financial, business and operational prospects including but not limited to, efficient management of costs, and improved administrative control of the Amalgamated Company.

f. The Scheme shall be in the beneficial interest of the Shareholders and Creditors of the Amalgamated Company. The Scheme shall not be in any manner prejudicial to the interest of the concerned members, creditors, employees or general public at large.

Approvals with respect to Scheme of Amalgamation The Scheme of Amalgamation between erstwhile Digjam Limited with Digjam Limited (formerly Digjam Textiles Limited) and their respective Creditors and Shareholders for transfer and vesting of the entire business and undertaking of Digjam Limited into Digjam Textiles Limited under Sections 391 to 394 of the Companies Act, 1956 was unanimously approved by the shareholders of erstwhile Digjam Limited at the Court convened Meeting on December 12, 2015 and thereafter, the Hon’ble High Court of Gujarat vide its Order dated February 17, 2016 has sanctioned the said Scheme of Amalgamation. In accordance with the said Scheme, the Equity Shares of our Company issued, subject to applicable regulations, shall be listed and admitted to trading on the NSE and BSE. Such listing and admission for trading is not automatic and will be subject to such other terms and conditions as may be prescribed by the Stock Exchanges at the time of application by our Company seeking listing.

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STATEMENT OF TAX BENEFITS

The Board of Directors, Digjam Limited Aerodrome Road, Jamnagar - 361 006 Gujarat, India Re: Tax benefits in connection with the proposed listing of 8,76,41,621 equity shares of Rs. 10/- each pursuant to Scheme of Amalgamation between Digjam Limited and Digjam Textiles Limited Dear Sirs, We are in receipt of your letter dated 29/04/2016 seeking our advice regarding various benefits available to M/s. Digjam Limited (“the Company”) and its shareholders under the Indian Direct Tax Laws presently in force in India. We understand that our advice will be incorporated in the Information Memorandum to be issued in connection with the proposed listing of 8,76,41,621 equity shares of Rs. 10/- each. In this behalf, we enclose herewith a statement of possible tax benefits available to the Company and its shareholders on the basis of current tax laws presently in force in India, subject to the fulfillment of the respective requirements of the relevant provisions. The benefits discussed in the enclosed statement are not exhaustive nor are they conclusive. This statement is only intended to provide general information and to guide the investors and is neither designed nor intended to be a substitute for professional tax advice. A shareholder is advised to consult his/ her/ their own tax consultant with respect to the tax implications of an investment in the equity shares particularly in view of the fact that certain recently enacted legislation may not have a direct legal precedent or may have a different interpretation on the benefits, which an investor can avail. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws and their interpretations. Hence, the ability of the Company or its shareholders to derive tax benefits is dependent upon fulfilling such conditions, which based on business imperatives the Company faces in the future, the Company may or may not choose to fulfill. We do not express any opinion or provide any assurance as to whether:

• The Company or its shareholders will continue to obtain these benefits in future; or

• The conditions prescribed for availing the benefits have been / would be met with;

• The revenue authorities/ courts will concur with the views expressed herein. Our confirmation is based on the information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. Our views are based on the existing provisions of law and its interpretations, which are subject to change from time to time. We do not assume responsibility to up-date the views of such changes. The contents of the enclosed statement are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. While all reasonable care has been taken in the preparation of this opinion, we accept no responsibility for any errors or omissions therein or for any loss sustained by any person who relies on it.

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This report is intended solely for information and for the inclusion in the Information Memorandum to be issued in connection with the proposed listing of 8,76,41,621 equity shares of Rs. 10/- each and is not to be used, referred to or distributed for any other purpose without our prior written consent. For Sarda and Sarda Chartered Accountants Firm Registration No. 109264W Rajnikant Pragada Proprietor Membership No. 118132 Date: May 05, 2016 Place: Jamnagar

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STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS UNDER THE INCOME TAX ACT, 1961 (the IT Act) Digjam Limited is an Indian Company subject to tax in India. The Company is taxed on its profits/book profits as computed under the IT Act. Profits are computed after allowing all reasonable business expenditure including depreciation. Considering the activities and the business of the Company, the following benefits may be available.

I. SPECIAL TAX BENEFITS AVAILABLE TO THE COMPANY There are no special tax benefits available to the Company.

II. SPECIAL TAX BENEFITS AVAILABLE TO THE SHAREHOLDERS There are no special tax benefits available to the shareholders.

III. GENERAL TAX BENEFITS AVAILABLE TO THECOMPANY 1. Subject to compliance of certain conditions laid down in Section 32 of the IT Act, the Company will be

entitled to a deduction for depreciation in respect of tangible assets and intangible assets, being in the nature of know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature acquired on or after 1st day of April, 1998 at the rates prescribed under the Income-tax Rules, 1962.

2. Subject to compliance of certain conditions laid down in Section 32 AC of the IT Act, the Company will be entitled to a deduction of a sum equal to fifteen per cent of the actual cost of new plant or machinery (excluding the items specified in sub section 4 of section 32 AC) for the A.Y. 2016-17 and 2017-18 if the cost of new plant or machinery acquired and installed during the previous year exceeds twenty-five crores rupees.

3. The Company will be entitled for exemption under section 10(2A) of the I.T. Act for the share of profits received from the Indian partnership firm in which the company is a partner. As per provisions of Section 14A of the IT Act, expenditure incurred to earn an exempt income like dividend, share of profits received from an Indian partnership firm etc. is not allowed as deduction while determining taxable income.

4. Under section 35 CCD, the company will be entitled to claim deduction to the extent of 150% of the expense done by the company towards Skill Development Project.

5. The company will be entitled to amortize preliminary expenses being the expenditure incurred on public issue of shares, under Section 35D(2)(c )(iv) of the IT Act, subject to the nature of expenses and the limit specified in Section35D(3).

6. Under section 35DD of the IT Act, for any expenditure incurred wholly and exclusively for the purposes of amalgamation the Company is eligible for deduction of an amount equal to one fifth of such expenditure for each of the five successive years beginning with the year in which amalgamation or demerger takes place.

7. The Company will be entitled to claim expenditure incurred in respect of voluntary retirement scheme under scheme 35DDA of the IT Act in five equal annual installments.

8. The Company will not be entitled for deduction in respect of any expenditure incurred on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 under the provisions of section 37(1) of the IT Act.

9. Under Section 71 of the IT Act, business loss suffered by the company during the year is allowed to be set-off against income from any other head. Balance loss, if any, could be carried forward under Section 72 for eight years for claiming set-off against subsequent years’ business income. If the accumulated loss suffered by a company comprises unabsorbed depreciation, then such unabsorbed depreciation shall be carried forward to subsequent years indefinitely.

10. Under section 72A of the IT Act, accumulated losses and unabsorbed depreciation of the amalgamating company will be deemed to be the accumulated losses and unabsorbed depreciation of the amalgamated company, subject to the fulfillment of the specified conditions. Therefore, the company being an industrial undertaking is entitled to set off and carry forward the accumulated losses and unabsorbed depreciation of the amalgamating company.

11. Where any tax is paid under section 115JB(1) of the IT Act (hereinafter referred to as Minimum Alternate Tax or “MAT”) for any assessment year commencing on the first day of April 2006, then section 115JAA (1A) provides that credit in respect of tax so paid shall be allowed to the Company in accordance with the provisions of the IT Act. Tax Credit eligible to be carried forward will be the difference between the MAT paid and the tax computed as per the Normal provisions of the IT Act for that assessment year. Such MAT credit is allowed to be carried forward for set off purposes for up to 10 years succeeding the year in which

40

the MAT credit is allowed. 12. Under section 115-O of the IT Act, the Company will be liable to pay Divided Distribution Tax (DDT) on

the dividends declared and distributed, the dividends so declared, distributed or paid by the domestic company shall be reduced by-

• The dividends received from its Indian subsidiary provided such subsidiary has paid DDT on the same.

• The dividend received from its Indian subsidiary provided such dividend is taxable under section 115BBD of the IT Act.

For the said purpose, a company shall be a subsidiary of another company, if such other company, holds more than half in nominal value of the equity share capital of the company. For the purposes of determining the tax on distributed profits, net distributed profits shall be increased to such amount as would, after reduction of the tax on such increased amount to equal to the net distributed profits.

Income from Distributed Profits 1. As per the provisions of section 10(34) of the IT Act, any income by way of dividends referred to in Section

115-O (i.e. dividends declared, distributed or paid on or after 1 April, 2003) received from domestic company is exempt from income-tax. As per provisions of Section 14A of the IT Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income.

2. As per section 10(35) of the IT Act, the following income will be exempt in the hands of the Company.

a. Income received in respect of the units of a Mutual Fund specified under clause (23D) of section 10;or

b. Income received in respect of units from the Administrator of the specified undertaking; or

c. Income received in respect of units from the specified company. However, this exemption does not apply to any income arising from transfer of such units by the unit holder.

For this purpose (i) “Administrator” means the Administrator as referred to in Section 2(a) of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 and (ii) “Specified Company” means a Company as referred to in Section 2(h) of the said Act. As per provisions of Section 14A of the IT Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income.

Capital Gains 1. Under Section 10(33) of the IT Act, any income arising from the transfer of a capital asset, being a unit of

the Unit Scheme, 1964 referred to in Schedule I to the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002) and where the transfer of such asset takes place on or after the 1st day of April 2002 is exempt. As per provisions of Section 14A of the IT Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income.

2. As per Section 10(38) of the IT Act, capital gains arising to the Company on transfer of long term capital asset being an equity share in a company or a Unit of an equity oriented fund or a unit of business trust (except those which were acquired in consideration of a transfer referred to in clause xvii of section 47) will be exempt in the hands of the Company, provided such transaction is chargeable to securities transaction tax. For this purpose, “Equity Oriented Fund” means a fund-

a. Where the investible funds are invested by way of equity shares in domestic companies to the extent of more than sixty five % of the total proceeds of such funds; and

b. Which has been set up under a scheme of a mutual fund specified under Section 10(23D) of the IT Act. The long term capital gains exempt under Section 10(38) would be liable to book profit tax under Section 115JB of the IT Act. As per provisions of Section 14A of the IT Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income.

3. As per section 47(vi) of the IT Act, any capital asset that will be transferred by the company to the amalgamated company is exempt from capital gain tax in the hands of amalgamating company.

4. Under the Second Proviso to Section 48 of the IT Act, long term capital gains of the Company arising on transfer of capital assets other than bonds and debentures (not being capital indexed bonds issued by Government) will be computed after applying the relevant indexation on the cost of acquisition and cost of improvement. The resulting long term capital gains would be charged @ 20% (plus applicable surcharge and education cess) as per Section 112 of the IT Act. Alternatively, at the option of the company, in respect of long term capital gains from the sale of listed securities or units or Zero coupon bonds where the tax payable in respect of any such long term capital gains exceeds 10% of the amount of Capital gains arrived at without indexing the cost, the capital gains is charged at a concessional rate of 10% (Plus applicable

41

surcharge and education cess).Vide Explanation 1(i)(c) to Section 2(42A), for determining the holding period of the capital asset being a share or shares in an Indian company which became the property of the assessee in consideration of a transfer of shares in a Scheme of Amalgamation, there shall be included the period for which the share or shares in the amalgamating company were held by the assessee. Further, vide Section 49(2), the cost of acquisition of the share or shares in the amalgamated Indian company shall be deemed to the assessee to be the cost of acquisition of the share or shares in the amalgamating company.

5. Under Section 54EC of the IT Act subject to the conditions and to the extent specified therein, long-term capital gains (in cases not covered under Section 10(38) of the IT Act) arising on the transfer of a long-term capital asset will be exempt from capital gains tax if capital gains are invested in a “long term specified asset” within a period of six months after the date of such transfer. If only part of capital gain is so invested, exemption available shall be in the same proportion as the cost of long term specified assets bears to the whole of the capital gain. However, if the assesse transfers or converts the long term specified asset into money within a period of three years from the dates of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money. “Long tern specified asset” for the purpose of making investment under Section 54EC of the IT Act, means any bond, redeemable after three years and issued on or after the 1st day of April 2007:

a) By the National Highways Authority of India constituted under Section 3 of the National Highways Authority of India Act, 1988 or;

b) By the Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956.

Provided further that the investments in the Long- term specified asset during the financial year in which the original asset or assets are transferred and in the subsequent financial year should not exceed fifty lacs rupees.

6. Under Section 111A of the IT Act, short term capital gains arising to the Company from the sale of a short term capital asset being an equity share or a unit of an equity oriented fund will be taxable at the rate of 15% (plus applicable surcharge and education cess) where such transaction is chargeable to securities transaction tax. Short Term Capital Gains arising from transfer of shares in a Company, other than those covered by Section 111A of the IT Act, would be subject to tax as calculated under the normal provisions of the IT Act. For this Purpose, ’equity oriented’ would have the same meaning as specified in section 10(38) above.

7. As per Section 70, short term capital loss suffered by the Company during the year is allowed to be set off against short-term as well as long-term capital gains of the said year. Balance Loss, if any could be carried forward under section 74 for eight years for claiming set-off against subsequent years’ long term/short term capital gains. Long-term loss suffered during the year is allowed to be set-off against long-term capital gains. Balance loss, if any, could be carried forward for eight years for claiming set-off against subsequent years’ long- term capital gains.

IV. GENERAL TAX BENEFITS AVAILABLE TO RESIDENT SHAREHOLDERS a. As per the provisions of Section 10(34) of the IT Act, any income by way of dividends referred to in

Section 115-O (i.e. dividends declared, distributed or paid on or after 1 April 2003) received from domestic company is exempt from income tax in the hands of shareholder. As per provisions of Section 14A of the IT Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income.

b. As per the Provisions of Section 10(38) of the IT Act, long term capital gains arising on sale of equity shares in the Company would be exempt from tax where the sale transaction has been subjected to securities transaction tax. As per provisions of Section 14A of the IT Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income

c. As per Provisions of Section 36(I)(xv)of the IT Act, securities transaction tax paid in respect of the taxable securities transactions entered into in the course of the business is allowed as a deduction if the income arising from such taxable securities transactions is included in the income computed under the head ‘ Profit and gains of business or profession’. Where such deduction is claimed, no further deduction in respect of the said amount is allowed while determining the income chargeable to tax as capital gains.

d. As per section 47(vii), consideration by way of shares, received by the shareholders of the amalgamating company will be exempt in the hands of the shareholder of such company. Vide Explanation 1(i)(c) to Section 2(42A), for determining the holding period of the capital asset being a share or shares in an Indian company which became the property of the assessee in consideration of a transfer of shares in a Scheme of Amalgamation, there shall be included the period for which the share or shares in the amalgamating company were held by the assessee. Further, vide Section 49(2), the cost of acquisition of the share or

42

shares in the amalgamated Indian company shall be deemed to the assessee to be the cost of acquisition of the share or shares in the amalgamating company.

e. Under the Second Proviso to Section 48 of the IT Act, long term capital gains of the Shareholder arising on the transfer of capital assets other than bonds and debentures (not being capital indexed bonds) will be computed after applying the relevant indexation on the cost of acquisition and cost of improvement. The resulting long term capital gains would be charged @ 20% (plus applicable surcharge and education cess) as per Section 112 of the IT Act. Alternatively, at the option of the Shareholder, in respect of long term capital gains from the sale of listed securities or (which are not exempt u/s 10(38) of the IT Act) units or Zero coupon bonds where the tax payable in respect of any such long term capital gains exceeds 10% of the amount of capital gains arrived at without indexing the cost, the capital gains is charged at a concessional rate of 10% (plus applicable surcharge and education cess).

f. As per the provisions of Section 54EC of the IT Act and subject to the conditions and to the extent specified therein, long-term capital gains (which are not exempt under Section 10(38) of the IT Act) would be exempt from tax to the extent such capital gains are invested in long term specified assets within six months from the date of such transfer in the bonds issued by: i. By the National Highways Authority of India constituted under Section 3 of the National Highways

Authority of India Act, 1988 or; ii. Rural Electrification Corporation Limited, the company formed and registered under the Companies

Act, 1956. If only part of the capital gain is so reinvested, exemption available shall be in the same proportion as the cost of long term specified assets bears to the whole of the capital gain. However, in case the long term specified asset is transferred or converted into money within three years from the dates of its acquisition, the amount so exempted shall be chargeable to tax during the year such transfer or conversion into money takes place. Provided further that the investments in the Long- term specified asset during the financial year in which the original asset or assets are transferred and in the subsequent financial year should not exceed fifty lacs rupees. The cost of the long term specified assets, which has been considered under this Section for calculating capital gain, shall not be allowed as a deduction from the income tax under Section 80C for any assessment year beginning on or after 1 April, 2006.

g. As per the Provisions of Section 54F of the IT Act subject to the conditions specified therein, long- term capital gains (which are not exempt under Section 10(38) of the IT Act) arising to an individual or a Hindu Undivided Family (“HUF”) on transfer of shares of the Company will be exempt from capital gains tax if the sale proceeds from transfer of such shares are used for purchase of residential house property within a period of one year before or two years after the date on which the transfer took place or for construction of residential house property within a period of three years the date of such transfer.

h. As per Section 70, short term capital loss suffered during the year is allowed to be set off against short-term as well as long-term capital gains of the said year. Balance Loss, if any could be carried forward under section 74 for eight years for claiming set-off against subsequent years’ long term/short term capital gains. Long-term loss suffered during the year is allowed to be set-off against long-term capital gains. Balance loss, if any, could be carried forward for eight years for claiming set-off against subsequent years’ long-term capital gains.

i. Where the resident shareholder is a corporate assesse, then, to the extent its business consists of purchase and sale of shares of other companies, the provisions of Explanation of Section 73 may be attracted. In other words, the losses arising on the purchase and sale of such shares shall be allowed to be set off only against the profits arising on the sale of such shares. The unabsorbed losses, if any, shall be allowed to be carried forward for a period not exceeding four assessment years immediately succeeding the assessment year in which the loss is first computed and set off against the profits arising from the sale of such shares.

j. As per the provisions of Section 111A of the IT Act, short term capital gains from the sale of an equity Share of the Company would be taxable at a rate of 15% (plus applicable surcharge and education cess) where such transaction of sale is entered on a recognized stock exchange in India and is liable to securities transaction tax. Short Term Capital Gains arising from transfer of Shares in a Company, other than those covered by Section 111A of the IT Act, would be subject to tax as calculated under the normal provisions of the IT Act.

V. GENERAL TAX BENEFITS AVAILABLE TO NON-RESIDENTS/ NON-RESIDENT INDIAN

SHAREHOLDERS (OTHER THAN MUTUAL FUNDS, FIIs AND FOREIGN VENTURE CAPITAL INVESTORS) a. As per the provisions of Section 10(34) of the IT Act, any income by way of dividends referred to in

Section 115-O (i.e. dividends declared, distributed or paid on or after 1 April 2003) received on the

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shares of any company is exempted from tax and is not subject to any deduction of tax at source. As per provisions of Section 14A of the IT Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income.

b. As per the Provisions of Section 10(38) of the IT Act, long term capital gains arising on Transfer of equity shares in the Company would be exempt from tax provided the transaction is chargeable to Securities Transaction Tax. As per provisions of Section 14A of the IT Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income.

c. As per Provisions of Sections 36(I)(xv) of the IT Act, securities transaction tax paid in respect of the taxable securities transactions entered into in the course of the business is allowed as a deduction if the income arising from such taxable securities transactions is included in the income computed under the head ‘ Profit and gains of business or profession’. Where such deduction is claimed, no further deduction in respect of the said amount is allowed while determining the income chargeable to tax as capital gains.

d. As per section 47(vii), consideration by way of shares, received by the shareholders of the amalgamating company will be exempt in the hands of the shareholder of such company. Vide Explanation 1(i)(c) to Section 2(42A), for determining the holding period of the capital asset being a share or shares in an Indian company which became the property of the assessee in consideration of a transfer of shares in a Scheme of Amalgamation, there shall be included the period for which the share or shares in the amalgamating company were held by the assessee. Further, vide Section 49(2), the cost of acquisition of the share or shares in the amalgamated Indian company shall be deemed to the assessee to be the cost of acquisition of the share or shares in the amalgamating company.

e. Under Section 111A of the IT Act, short term capital gains arising from the sale of an equity Share, being a short term capital asset in the Company, would be taxable at a concessional rate of 15% (plus applicable surcharge and education cess) where such transaction is liable to securities transaction tax. Short Term Capital Gains arising from transfer of Shares in a Company, other than those covered by Section 111A of the IT Act, would be subject to tax as calculated under the normal provisions of the IT Act.

f. In term of the first proviso to Section 48 of the IT Act, in case of a non-resident, while computing the capital gains arising from transfer of shares in or debentures of the Company acquired in convertible foreign exchange (as per exchange control regulations), protection is provided from fluctuations in the value of rupee in terms of foreign currency in which the original investment was made. Cost indexation benefits will not be available in such a case. The capital gains/loss in such a case is computed by converting the cost of acquisition, sales consideration and expenditure incurred wholly and exclusively in connection with such transfer into same foreign currency which was utilized in the purchase of Shares.

g. As per the provisions of Section 54EC of the IT Act and subject to the conditions and to the extent specified therein, long-term capital gains (which are not exempt under Section 10(38) of the IT Act) would not be chargeable to tax to the extent such capital gains are invested in long term specified assets within six months from the date of transfer and held for a period of three years, from the date of acquisition, in bonds issued by: i. National Highways Authority of India constituted under Section 3 of the National Highways

Authority of India Act,1988; ii. Rural Electrification Corporation Limited, the company formed and registered under the

Companies Act, 1956. If only part of the capital gain is so reinvested, exemption available shall be in the same proportion as the cost of long term specified assets bears to the whole of the capital gain. However, in case the long term specified asset is transferred or converted into money within three years from the date of its acquisition, the amount so exempted shall be chargeable to tax during the year such transfer or conversion into money takes place. Provided further that the investment in the long-term specified asset during the financial year in which the original asset or assets are transferred and in the subsequent financial year should not exceed fifty lakh rupees. The cost of the long-term specified assets, which has been considered under this Section for calculating capital gain, shall not be allowed as a deduction from the income tax under Section 80C for any assessment year beginning on or after 1 April, 2006.

h. As per the Provisions of Section 54F of the IT Act subject to the conditions specified therein, long-term capital gains (which are not exempt under Section 10(38) of the IT Act) arising to an individual or a Hindu Undivided Family (“HUF”) on transfer of shares of the Company will be exempt from capital gains tax if the sale proceeds from transfer of such shares are used for purchase of residential house property within a period of one year before or two years after the date on which the transfer took place

44

or for construction of residential house property within a period of three years the date of such transfer. i. As per Section 90(2) of the IT Act, provisions of the Double Taxation Avoidance Agreement between

India and the country of residence of the Non-Resident/ Non-resident Indian would prevail over the provisions of the IT Act to the extent the same are more beneficial to the Non-resident/ Non-resident Indian subject to Tax Residency Certificate being furnished as per prescribed format.

j. As per provisions of Section 115E of the IT Act, Long Term Capital Gain arising to a Non-Resident Indian from transfer of specified foreign exchange assets is taxable at the rate of 10% (Plus applicable surcharge and cess). Further, income from investment and long term capital gain assets (other than specified foreign exchange assets) arising to a Non-Resident Indian is taxable at the rate of 20% (Plus applicable surcharge and cess). No deduction is allowed from such income in respect of any expenditure or allowance or deductions under Chapter VI-A of the IT Act. Further the benefit of first proviso to section 48 shall not be available.

k. As per provisions of Section 115F of the IT Act, Long Term Capital Gain arising to a Non-Resident Indian from transfer of a foreign exchange assets is exempt from tax if the net consideration from such transfer is invested in the specified assets or savings certificates within six months from the date of such transfer, subject to the extent and conditions specified in that section.

l. As per provisions of Section 115G of the IT Act, where the total income of a Non-Resident Indian consists only of investment income / Long term capital gain from such foreign exchange asset / specified asset and tax thereon has been deducted at source in accordance with the Act, the Non-Resident Indian is not required to file a return of income.

m. As per provisions of Section 115H of the IT Act, where a person who is a Non-Resident Indian in any previous year, becomes assessable as a resident in India in respect of the total income of any subsequent year, he / she may furnish a declaration in writing to the assessing officer, along with his / her return of income under Section 139 of the IT Act for the Assessment year in which he/ she is first assessable as a resident, to the effect that the provisions of the Chapter XII-A (Special provisions relating to certain incomes of non-residents) shall continue to apply to him/her in relation to investment income derived from the specified assets for that year and subsequent years until such assets are transferred or converted into money.

n. As per provisions of Section 115-I of the IT Act, a Non-Resident can opt not be governed by the provisions of Chapter XII-A (Special provisions relating to certain incomes of Non-residents) for any assessment year by furnishing return of income for that assessment year under Section 139 of the IT Act, declaring therein that the provisions of the chapter shall not apply for that assessment year. In such a situation, the other provisions of the IT Act shall be applicable while determining the taxable income and tax liability arising thereon.

VI. GENERAL TAX BENEFITS AVAILABLE TO MUTUAL FUNDS

As per Section 10(23D) of the IT Act, any income of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or Mutual Funds set up by public sector banks or public financial institutions and Mutual Funds authorized by the Reserve Bank of India will be exempt from income tax, subject to such conditions as the Central Government may, by notification in the Official Gazette, specify in this behalf.

VII. GENERAL TAX BENEFITS AVAILABLE TO FOREIGN ISTITUTIONAL INVESTORS (‘FIIs’) 1. As per the provisions of Section 10(34) of the IT Act, dividend income (referred to in Section 115-0 of

the IT Act) would be exempt from tax in the hands of the shareholders of the Company and are not subjected to deduction of tax at source. As per provisions of Section 14A of the IT Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income.

2. As per the Provisions of Section 10(38) of the IT Act, long term capital gains arising on Transfer of equity shares in the Company would be exempt from tax where the sale transaction has been entered into on a recognized stock exchange of India and is liable to securities transaction tax. As per provisions of Section 14A of the IT Act, expenditure incurred to earn an exempt income is not allowed as deduction while determining taxable income.

3. As per Provisions of Sections 36(I)(xv) of the IT Act, securities transaction tax paid in respect of the taxable securities transactions entered into in the course of the business is allowed as a deduction if the income arising from such taxable securities transactions is included in the income computed under the head ‘Profit and gains of business or profession’. Where such deduction is claimed, no further deduction in respect of the said amount is allowed while determining the income chargeable to tax as capital gains.

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4. As per the provisions of Section 54EC of the IT Act and subject to the conditions and to the extent specified therein, long-term capital gains (which are not exempt under Section 10(38) of the IT Act) would not be chargeable to tax to the extent such capital gains are invested in long term specified assets within six months from the date of transfer and held for a period of three years, from the date of acquisition, in bonds issued by: a. National Highways Authority of India constituted under Section 3 of the National Highways

Authority of India Act,1988; b. Rural Electrification Corporation Limited, the company formed and registered under the

Companies Act, 1956. If only part of the capital gain is so reinvested, exemption available shall be in the same proportion as the cost of long term specified assets bears to the whole of the capital gain. However, in case the long term specified asset is transferred or converted into money within three years from the date of its acquisition, the amount so exempted shall be chargeable to tax during the year such transfer or conversion into money takes place. Provided further that the investment in the long-term specified asset during the financial year in which the original asset or assets are transferred and in the subsequent financial year should not exceed fifty lakh rupees.

5. Where the Foreign Institutional Investor is a corporate assessee, to the extent its business consists of purchase and sale of shares of other companies, provisions of Explanation to Section 73 may be attracted. In other words, the losses arising on the purchase and sale of such shares shall be allowed to be set off only against the profits arising on the sale of such shares. The unabsorbed losses, if any, shall be allowed to be carried forward for a period not exceeding four assessment years immediately succeeding the assessment year in which the loss is first computed and set off against the profits from the sale of such shares.

6. As per Section 90(2) of the IT Act, Provisions of the Double Taxation Avoidance Agreement between India and the country of residence of the FII would prevail over the provisions of the IT Act to the extent the same are more beneficial to the FII subject to furnishing of Tax Residency Certificate and Form No. 10F as applicable.

7. Under the provisions of Section 111A of the IT Act, Short-Term Capital Gain arising to FII from transfer of Equity share in the Company would be taxable at a concessional rate of 15% (plus applicable surcharge and education cess) where such transaction which has been subjected to Securities Transaction Tax.

8. As per provisions of Section 115AD of the IT Act, income (other than income by way of dividends referred to in Section 115-O of the IT Act) of FIIs arising from securities (other than the units purchased in foreign currency referred to Section 115AB of the IT Act) would be taxed at concessional rates, as follows:

Nature of income Rate of tax (%) Income in respect of securities 20

Interest referred to in section 194LD 5

Long term capital gains 10

Short term capital gains (other than short term capital gain referred to in Section 111 A

30

The above tax rates would be increased by the applicable surcharge and education cess. The benefits of Indexation as provided under Section 48 of the IT Act and foreign currency fluctuation protection are not available. GENERAL TAX BENEFITS AVAILABLE TO VENTURE CAPITAL COMPANIES / FUNDS

1. As per Section 10(23FB) of the IT Act, any income of a Venture Capital Company or Venture Capital Fund from investment in a Venture Capital undertaking would be exempted from income tax subject to the fulfillment of conditions specified.

2. Under Section 90(2) of the IT Act, provisions of the Double Taxation Avoidance Agreement (DTAA) between India and the country of residence of the Fund/company (if non- resident) would prevail over the provisions of the IT Act to the extent the DTAA is more beneficial to the non-resident.

The Government of India has recently made amendments in the existing income tax laws to incorporate provisions relating to General Anti-Avoidance Rules (GAAR). GAAR would be effective from assessment year commencing on 1st April 2018 or thereafter.

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Notes:

a. The above statement of Possible Direct Tax Benefits sets out the provisions of law in a summary manner only and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and disposal of equity shares.

b. The above statement of Possible Direct Tax Benefits sets out the possible tax Benefits available to the Company and its shareholders under the current tax laws presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws.

c. Legislation, its judicial interpretations and the policies of the regulatory authorities are subject to change from time to time and these may have a bearing on the above. Accordingly, any change or amendment in the law or relevant regulations would necessitate a review of the above. There is no responsibility to carry out any review of the above for changes in laws or regulations occurring after the date of issue of the information memorandum.

d. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences, the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue.

e. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further subject to any benefits available under the Double Taxation Avoidance Agreements, if any, between India and the country in which the non-resident has fiscal domicile. The statement of possible tax benefits enumerated above is as per the Income Tax Act, 1961 as amended by the Finance Act 2015 and does not take into account the proposals incorporated in the Finance Bill, 2016. This note has been prepared solely in connection with the proposed listing of Equity shares by the Company under the Securities and Exchange Board of India (“SEBI”) mechanism for the Schemes of Amalgamation.

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INDUSTRY OVERVIEW

The information presented in this section has been obtained from publicly available documents from various

sources including officially prepared materials from the Government of India and its various ministries,

industry websites/publications and company estimates. Industry websites / publications generally state that the

information contained therein has been obtained from sources believed to be reliable, but their accuracy,

completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Industry

and government publications are also prepared based on information as of specific dates and may no longer be

current or reflect current trends. Although we believe industry, market and government data used in the Draft

Letter of Offer is reliable, it has not been independently verified. Similarly, our internal estimates, while

believed by us to be reliable, have not been verified by any independent agencies.

OVERVIEW OF THE INDIAN ECONOMY India is the world’s largest democracy by population with an estimated population size of 1.25 billion and a gross domestic product (“GDP”) in purchasing power parity terms of approximately US$8.027 trillion. (Source: Central Intelligence Agency (CIA) World Factbook) As per the latest estimates available on the Index of Industrial Production (IIP), the General Index for the month of February 2016 stands at 184.60, which is 2.0% higher as compared to the level in the month of February 2015. The cumulative growth during April-February 2015-16 over the corresponding period of the previous year stands at 2.6%. The indices of Industrial Production for the mining, manufacturing and electricity sectors for the month of February 2016 stand at 136.10, 194.10 and 181.90 respectively, with the corresponding growth rates of 5.0%, 0.7% and 9.6%, as compared to February 2015. The cumulative growth in the three sectors during April-February 2015-16 over the corresponding period of 2014-15 has been 2.4%, 2.3% and 5.1% respectively. In terms of industries, sixteen (16) out of the twenty two (22) industry groups (as per 2-digit NIC-2004) in the manufacturing sector have shown positive growth during the month of February 2016 as compared to the corresponding month of the previous year. (Source: Website of Ministry of Statistics and Programme Implementation)

The Foreign Direct Investment (FDI) investment was USD 36,046 Million in FY 2013-14 and USD 44,291 Million in FY 2014-15 and USD 40,823 Million in April-December 2015 in FY 2015-16 as per provisional figures by RBI. The cumulative amount of FDI Equity Inflows from April 2000 to December 2015 stood at USD 277,954 Million. (Source: Website of Department of Industrial Policy and Promotion)

GLOBAL TEXTILE INDUSTRY OVERVIEW The current global garment market is estimated at approximately $1.5 trillion which form nearly 1.8 percent of the world GDP. Almost 75% of this market is concentrated in Europe, USA, China and Japan. An analysis of per capita spend on garment in various countries shows a significant difference between numbers in developed and developing economies. Within the major markets, India has the lowest per capita spend on garment ($37) which is only 3% of the highest one viz. Australia($1,131). The top five textile and garment exporting nations are China, India, Italy, Germany And Turkey. China is the single largest exporter with 39% share while India stood at a distant second place with 5% share. The top five textile and garmenting importing nations are US, China, Germany, Japan and United Kingdom. (Source: Report on Textile Industry in India, www.cci.in) INDIAN TEXTILE INDUSTRY OVERVIEW India’s textiles sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to India’s exports with approximately 11 per cent of total exports. The textiles industry is also labour intensive and is one of the largest employers. The industry realised export earnings worth US$ 41.4 billion in 2014-15, a growth of 5.4 per cent, as per The Cotton Textiles Export Promotion Council (Texprocil). The textile industry has two broad segments. First, the unorganized sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale. (Source: Ministry of External Affairs (MEA) India in business, www.indiainbusiness.nic.in)

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India is the one of the world’s largest producers of textiles and garments. Abundant availability of raw materials such as cotton, wool, silk and jute as well as skilled workforce have made the country a sourcing hub. It is the world’s second largest producer of textiles and garments. The Indian textiles Industry accounts for about 24% of the world’s spindle capacity and eight percent of global rotor capacity. The potential size of the Indian textile and apparel industry is expected to reach US$ 223 billion by 2021. (Source: Report on Textile Industry in India, www.cci.in) The Indian textiles industry is extremely varied, with the hand-spun and hand-woven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralized power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world. The Indian textiles industry, currently estimated at around US$ 108 billion. The industry is the second largest employer after agriculture, providing employment to over 45 million people directly and 60 million people indirectly. The Indian Textile Industry contributes approximately 5 per cent to India’s gross domestic product (GDP), and 14 per cent to overall Index of Industrial Production (IIP). The Indian textile industry has the potential to reach US$ 500 billion in size according to a study by Wazir Advisors and PCI Xylenes & Polyester. The growth implies domestic sales to rise to US$ 315 billion from currently US$ 68 billion. At the same time, exports are implied to increase to US$ 185 billion from approximately US$ 41 billion currently. (Source: Ministry of External Affairs (MEA) India in business, www.indiainbusiness.nic.in) The textiles industry has made a major contribution to the national economy in terms of direct and indirect employment generation and net foreign exchange earnings. The sector contributes about 14% to industrial production, 4% to the gross domestic product (GDP), and 27% to the country’s foreign exchange inflows. It provides direct employment to over 45 million people. The textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of India’s economy. (Source: Report on Textile Industry in India, www.cci.in) VARIOUS CATEGORIES Indian textile industry can be divided into several segments, some of which can be listed as below:

• Cotton - Second largest cotton and cellulosic fibres producing country in the world.

• Silk - India is the second largest producer of silk and contributes about 18% to the total world raw silk production.

• Wool -India has 3rd largest sheep population in the world, having 6.15 crores sheep, producing 45 million kg of raw wool, and accounting for 3.1% of total world wool production. India ranks 6th amongst clean wool producer countries and 9th amongst greasy wool producers.

• Man-Made Fibres- the fourth largest in synthetic fibres/yarns globally.

• Jute - India is the largest producer and second largest exporter of the jute goods. SUPPLY CHAIN

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INDIAN TEXTILES AND CLOTHING EXPORTS India’s textiles and clothing industry is one of the largest contributing sectors of India’s exports worldwide. The report of the Working Group constituted by the Planning Commission on boosting India’s manufacturing exports during 12th Five Year Plan (2012-17) envisages India’s exports of Textiles and Clothing at US$ 64.41 billion by the end of March, 2017. The Export of Textiles and Clothing (T&C) during 2014-2015 was as under-

Exports 2013-2014 2014-2015 Growth In Percentage

`̀̀̀ Crore US$ Million

`̀̀̀ Crore US$ Million

`̀̀̀ Crore US$ Million

Total Textile & Clothing

227,337 37,475 230,293 37,654 1.3% 0.5%

Handicrafts (EPCH Data)

23,504 3,885 27,747 4,468 18.1% 15.0%

Total T&C including Handicrafts

250,841 41,360 258,040 42,122 2.9% 1.8%

% Textile Exports of overall exports

13.2% 13.2% 13.6% 13.6%

India's overall exports

1,905,011 314,405 1,896,348 310,338

IMPORT SCENARIO The total imports of T&C products by India during the Financial Year 2014-15 was of the value of US$ 6 billion. Man-made was the biggest import amongst T&C items with a value of US$ 0.82 billion followed by Man-Made staple fibres (US$ 0.74 billion) and Cotton (US$ 0.74 billion). India’s imports of T&C during 2015- 16 (Apr-Jul) has been of the order of US$ 1.97 billion. WOOL INDUSTRY In India Woollen textiles and clothing industry is relatively small compared to the cotton and man made fibre based textiles and clothing industry. However, the woollen sector plays an important role in linking the rural economy with the manufacturing industry, represented by small, medium and large scale units. The product portfolio is equally divergent from textile intermediaries to finished textiles, garments, knitwears, blankets, carpets and an incipient presence in technical textiles. Wool industry is a rural based export oriented industry and caters to civil and defence requirements for warmer clothing. SECTORS OF WOOL & WOOLLEN INDUSTRY

i. ORGANIZED SECTOR: a) Composite Mills b) Combing Units c) Worsted and Non-Worsted Spinning Units d) Knitwear and Woven Garments Units e) Machine-made Carpet Manufacturing Units.

ii. DECENTRALIZED SECTOR a) Hosiery and Knitting Units b) Powerloom Units c) Hand-made Carpet, Druggets and Namadahs units d) Independent Dyeing and Process Houses. WOOL PRODUCTION & CONSUMPTION The total wool production in India is not enough to meet the total requirement of raw wool for woollen industry. The bulk of Indian wool is of coarse quality and is used mostly in the hand-made carpet industry. Since indigenous production of fine quality wool required by the organized mills and decentralized hosiery sector is very limited, India depends almost exclusively on import.

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Production of Indigenous Wool:

Year Production Quantity (in Million Kg.)

2008-2009 42.80 Mn Kg

2009-2010 43.10 Mn Kg

2010-2011 44.00 Mn Kg

2011-2012 44.40 Mn Kg

2012-2013 46.05 Mn Kg

2013-2014 48.77 Mn Kg

2014-2015 48.14 Mn Kg

IMPORT The production of wool in the country is not sufficient to meet the demand of the wool industry particularly of apparel sector and most of it is being imported from Australia, New Zealand and many other countries. The present requirement of different segments of Indian woollen industry is likely to grow further because of higher domestic as well as export need of woollen items. There has been a shift from imports of fine quality wool to low quality wool in recent years. This is on account of consumer preference for hand tufted carpets in the US and other western markets. Cheap wool import from the Middle East is also constantly growing and is mixed with indigenous wool to make hand tufted carpets. Import of raw wool from Australia, New Zealand and many other countries are as under:

Year Qty (in Million Kg) Value (In `̀̀̀ Crore) 2008-09 65.73 1031.86

2009-10 68.26 1000.77

2010-11 94.77 1434.65

2011-12 76.29 1876.87

2012-13 77.16 1801.90

2013-14 89.60 1967.72

2014-15 96.53 2125.74

EXPORT India exports various woolen products like tops, yarn, fabrics, Ready Made Garments and Carpets. Carpet enjoys maximum share of total export. The aggregate export of woolen items from wool tops to finished products like textiles, clothing, blankets and carpets is currently estimated around ` 7000 Crs.

0

20

40

60

80

100

120

Import of Wool

Qty (in Million Kg)

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Item wise statement of Exports are as under: Value ( `̀̀̀ Crores)

Year Woolen, Yarn, Fabrics, Made ups

Ready made garments

Carpet Handmade Total

2007-08 373.57 1409.54 3725.79 5508.90

2008-09 456.51 1742.97 3505.37 5704.85

2009-10 424.63 1838.09 3442.93 5705.65

2010-11 501.20 1510.92 4706.68 6718.77

2011-12 725.20 1654.69 4051.21 6431.09

2012-13 659.30 1617.43 5340.77 7617.23

2013-14 684.70 1888.60 6255.83 8829.21

2014-15 1234.61 1901.76 8301.56 11437.90

FUTURE PLANS OF WOOL INDUSTRY The Government, for the holistic growth and development of Wool Sector, is making serious efforts to : � To improve quality and quantity of wool (carpet grade, specialty wool fibres such as Angora & Pashmina,

apparel grade and deccani grade wool). � Reduce mortality rate of sheep and Pashmina goats by 10% to bring down mortality rate from current rate

of 12-15% to 5-7%. � Setting up Common Facility Centres (CFCs) for creating processing facilities for wool and woollens. � To increase employment in wool and allied industry and fulfill requirement of skilled manpower and also

trained to wool growers with new techniques. � Improve wool production in rain fed areas by providing feed supplement to eligible (weak & pregnant)

sheep and pashmina goats. � To induce generic promotion of quality speciality fibres like Pashmina goats and angora rabbits. � To benefit wool growers under Social Security Scheme of Govt. of India. � To strengthen State Wool Marketing Organizations for marketing facility for raw wool and to ensure

remunerative returns to wool growers. � Increase the demand for Indian wool in domestic and international market. (Source : www.ministryoftextiles.gov.in) GOVERNMENT INITIATIVES The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route.

SECTOR POLICY

• Technology Upgradation Fund Scheme has infused investment of more than INR 2500 Billion in the industry. Support has been provided for modernisation and upgradation by providing credit at reduced rates and capital subsidies.

• Scheme for Integrated Textile Parks provides world class infrastructure to new textile units. To date, 57 Textile Parks have been sanctioned with an investment of INR 60 Billion. By 2017, 25 more Textile Parks are to be sanctioned.

• Integrated Processing Development Scheme for sanctioning processing parks has been initiated. INR 5 Billion has been earmarked for this scheme.

• Integrated Skill Development Scheme has provided training to 1.5 Million people to cover all sub-sectors of textiles such as Textile and Apparel, Handicrafts, Handlooms, Jute and Sericulture.

CHALLENGES FACED BY THE INDIAN TEXTILE INDUSTRY In spite of immense factors fuelling the growth of the Indian textile industry, there are certain challenges faced by the country in terms of:

• Scarcity of Trained Manpower

• Escalating Energy Costs,

• High Transportation Costs,

• Obsolete Labor Laws,

• Low Level of Technology; and

• Lack of Economies of Scale.

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OUR BUSINESS

The Company operates in the worsted textiles segment and runs a fully equipped composite mill (ISO 9001 certified) manufacturing high quality worsted fabrics at Jamnagar, Gujarat. The worsted industry in the country comprises of a few mills in the organized sector and a number of units in the unorganized sector. Digjam has been a notable player in this industry in India. Its commitment to quality and customer orientation reflects in its strong nationally recognized and valuable brand DIGJAM, supported by a well-established national distribution network. Our Company was incorporated as Digjam Textiles Limited on June 17, 2015 under the Companies Act, 2013 with the Registrar of Companies, Ahmedabad. The Registered Office of the Company is situated at Aerodrome Road, Jamnagar, Gujarat – 361 006. The name of the Company has been changed from Digjam Textiles Limited to Digjam Limited with effect from March 23, 2016 pursuant to Scheme of Amalgamation between erstwhile Digjam Limited with Digjam Limited (formerly Digjam Textiles Limited) and their respective creditors and shareholders and the Certificate of Incorporation pursuant to the change of name issued by the Registrar of Companies. The Corporate Identification Number of our Company is U17123GJ2015PLC083569. Digjam has a proven track record of manufacture of high quality fabrics with attractive and latest designs. The Company consistently takes steps to push forward its marketing efforts by enhancing its brand visibility, strengthening marketing organization and closer interaction with and expansion of its channel partners. The Company has always laid stress on export markets and exploring new areas. It has an independent marketing team supported by an appropriate network abroad for export business. It exports a significant portion of its production to markets in Europe, USA, Canada, Middle East, Far East etc. The Company has received Oeko-Tex Certificate issued by Hohenstein Textiles Testing Institute of Germany, which certifies that the woolen and wool blended fabrics manufactured by the Company meet the human-ecological requirements of the standard established for products with direct contact to skin. We are the first worsted mill in India to get the aforesaid "Oeko-Tex" certification. Manufacturing facility The Mill At the composite Mills located at Jamnagar, Digjam uses latest production facilities to manufacture high quality fabrics. In the vertically integrated mills, greasy wool & polyester tow is converted into finished fabrics through the processes of scouring and combing, dyeing, spinning, weaving, mending and finishing. The Machinery The machineries employed in these processes are state of the art including imported from France, Germany, Switzerland besides machinery procured from local manufacturers. Quality Control Stringent quality checks at each stage of Production ensure that only the finest fabric gets to wear the DIGJAM label. This has earned an ISO 9001:2008 Certification for the plant.

Raw materials The major raw materials required for manufacture of woolen and wool blended fabrics are as under: a. Greasy Wool: The major suppliers of Greasy Wool are in Australia, New Zealand and South Africa.

Greasy Wool can be easily imported under Open General License (OGL) and there are no restrictions on its imports. The desired micron and quality are readily available as per specified parameters. Wool tops are also being procured from the local market.

b. Polyester: Polyester fibre is easily available in India and is being purchased locally. c. P/V Yarn: Polyester/Viscose yarn is also easily available in India and there are many suppliers for the

same. Capacity The installed capacity of the Mills is 14,800 spindles for yarn and 98 looms for weaving fabrics besides wool combing capacity of 13.05 lakh kgs. per annum as on March 31, 2016. The plant, spread over 28.5 acres, employs 235 staff members and a dedicated force of 781 skilled/semi-skilled workers on a permanent basis as on March 31, 2016.

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The process of manufacturing woolen/worsted fabrics involves following steps:

1. Grey Combing: The wool received as per specifications in different microns is opened, scoured, dried, carded and combed. Scouring: Removes dirt, sweat, natural grease etc. Carding: Individualisation of fibres is achieved and it also separates vegetable matter. It converts loose fibres into a continuous sliver for subsequent process. Gilling & Combing: Parallelisation of fibres. Removal of vegetable matters and short fibres is achieved.

2. Tow to top converter: Polyester is received in a tow form and is cut to the required length to match with wool fibre for homogeneous blending.

3. Dyeing: Wool tops and polyester tops are dyed separately in required colours. There is a separate section for fabric dyeing for qualities that are dyed after weaving. In this section, fully automatic microprocessor – controlled machines are in operation like radio frequency dryer, Vigoureux printing and Jet dying machines. The dyeing plant also has a computerized Datacolor system for colour matching.

4. Recombing & Spinning: During dyeing process, certain degree of disturbances take place in the fibre. Hence parallelisation is required. In recombing we achieve this as well as remove short fibres to achieve better quality of yarn and improve spinning performance. Gradual reduction in weight from top to required yarn count is achieved through the processes of gilling, rowing and ring frame jointly described as spinning. Depending on the count and blend, the twist is also imparted to give adequate strength to the yarn. This is followed by autoconing to remove spinning faults, if any, and the final yarn is assembled and twisted to make it suitable for weaving.

5. Wrap Preparation: We use sectional warpers and depending on the pattern required in the fabric, the creel is arranged. The wrap beams are produced followed by drawing, reaching and denting to prepare the beam for weaving.

6. Weaving: The weaving takes place on the loom with interlacement of wrap and weft. Number of ends and picks are dependent on the count and weave required. Weaving is done on Sulzer – Ruti microprocessor controlled projectile weaving machines which are rated amongst the best in the world for producing highest quality of fabrics.

7. Mending: It is the manual operation carried out by skilled workmen to rectify spinning and weaving faults that may be present in the fabric.

8. Finishing: It is divided into two areas, viz., wet processing and dry processing. In wet processing, the fabric is washed with detergent to remove stains or chemicals that are applied during earlier operations. It also eliminates stresses on the yarn during spinning and weaving. In dry processing, the fabric is set for dimensional stability, sheared to give clear fabric which is then pressed and becomes ready for tailoring. For finishing to perfection, the finest Italian, German and Japanese machines are used to achieve uniformity and avoid lot variation.

9. Inspection & Folding: 100% of the fabric is inspected and graded (fresh/defective). The inspected fabric is cut into lengths as per market requirements and delivered to Warehouse.

10. Quality control: At each stage of production, control checks are incorporated to ensure the required quality. This is an online process. Various tests like shrinkages, pilling, washing fastness, colour fastness, tear strength, tensile strength etc., are carried out in the Central Laboratory.

11. Designing: A team of qualified and experienced designers on a continuous basis, develop fabric in required texture, weave, colours and designs to cater to both domestic and export requirements.

12. Production planning: It is the nerve centre, coordinating activities from the time of procurement of orders to delivery upto Warehouse. It also ensures the timely delivery of all fabrics in the stipulated time frame and in assortments.

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Utilities: Water: Average monthly consumption of water is approx. 18500 Kilo liters. The Company has access to adequate water supply for the plant from the Municipal Corporation as well as from its own and outside boring wells besides using recycled water. Power: The Company’s mill has a connected load of 3000 KVA from Paschim Gujarat Vij Company Limited which is sufficient to meet its existing peak requirement. The Company is also sourcing part of its power requirement through Indian Energy Exchange Limited. The Company has standby generator sets of 4000 KVA.

Grey Combing Wool Tow to top Converter Polyster

Scouring

Carding

Grilling and Combing

Dyeing (Fibre Tops/ yarn/ fabric)

Gilling

Grey Polyster Tops Grey Wool Tops

Recombing, Blending and Spinning

Warping and Weaving

Mending

Finishing

Inspecting, Testing and Folding

Warehouse

Production Process

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Environment: The Company is conscious of the need for environmentally friendly and safe operation and has obtained consents and authorisations from the Pollution Control Authorities. Products The Company operates in the worsted textiles segments. The high quality fabric manufactured by the Company include 100% Wool, Wool rich, Poly wool, Poly viscose blends, which are used in making suits, jackets, coats, trousers, safaris and garments. Market The domestic woolen textile industry, particularly the worsted textile segment, operates in the organized and unorganized sectors and therefore, official data is not readily available. Intelligent guess estimates put the current size of the Indian worsted market at around 50 to 55 Million meters per annum. The major players in the field are Raymond, Digjam, OCM and Reid & Taylor while Dinesh, Reliance (Vimal), Grasim, Siyaram (J. Hampstead), Georgia Gullini, Donear (Ferrino Mizzoni) and imported fabrics also form a crucial part of the market. The domestic worsted textiles market had been somewhat subdued due to less demand because of low growth in the economy in the last few years. Further, the imported fabrics are providing a cheaper alternative coupled with premium cotton, linen and synthetics. However, the strong growth in economy in the current year leading to increase in incomes of the consumers is expected to lead to improved demand particularly if the monsoon which had failed in the previous two years turns out to be good. The expected improvement in the economy in the coming years is also likely to play a favourable role in boosting the demand for premium quality fabrics. With higher exposure to international fashions and demand for formals particularly with the rise in educational levels, better level of air conditioning in offices, cars, homes are likely to trigger growth for the worsted sector. The Company like other major worsted players has also started outsourcing non-core competence products to have horizontal brand extension. This has enabled the Company to reach out to all sections of the consumers and enhance volumes in this section. The Company has always laid stress on export markets and exports a significant portion of its production to markets in Europe, USA, Canada, Middle East, Far East, etc. To meet the demand of international buyers, the Company has increased the range and variety of fabrics with finishes like bio-polishing, 100% wool washable fabrics and nano finished fabrics. The woolen and wool blended fabrics manufactured by the Company meet the human-ecological requirements of the standard establish for products with direct contact to skin as evident from the Oeko-Tex Certificate received by the Company. Some of the countries are showing signs of improvement in their economy while many countries continue to be under stress and strain. The US economy is strengthening due to increase in jobs. Europe continues to be on a path of slow recovery. However, the slowdown in growth in China is a cause of concern for the global economy. This coupled with tensions in the Middle East have led to volatility and uncertainties. The Indian

Rupee has depreciated to above ` 67 and the US Fed rate hike may have a further impact on the exchange rates of the emerging economies. It is expected that the Government policies will encourage exports and that RBI will follow an exchange policy which will augment growth and exports, particularly in the context of de-growth of exports in the recent past. Marketing & Selling arrangements The Company manufactures and markets its fabrics under the well-known brand ‘DIGJAM’. The products of the Company are recognized for their quality and are a value for money proposition. The Company’s mill at Jamnagar is recognized as an important producer of worsted woolen fabrics in the Country and its products are manufactured under the Quality Management Systems in accordance with IS/ISO 9001:2008 and carry the Woolmark certification for an assurance that the product is made of 100% pure new wool. The Company sales team is supported by regional sales representatives spread throughout the Country. The Company caters to the market by selling directly to the dealers as well as through wholesale channel. For direct marketing to the consumer, the Company has exclusive showrooms, retail shops, shop-in-shop and authorised retail dealers. The Company is one of the largest Indian exporters of worsted woolen fabrics and its quality is well accepted by leading international brands. It has a dedicated team for marketing its fabrics worldwide and has also appointed a number of selling representatives in different parts of the world.

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Principal Competitors The worsted fabric industry in the country is dominated by a small number of players: Raymond (Raymond Limited), DIGJAM (Digjam Limited), OCM (OCM India Limited), S. Kumar’s (Reid & Taylor) and Dinesh (Shri Dinesh Mills Limited) who account for about 80% of the domestic market share. Apart from these companies, products from Reliance Industries Limited (Vimal), Grasim Industries Limited, Bhilwara Suitings Limited and Donear Textiles as well as imported fabrics are also present in the market. Human Resources The Company has the track record to recruit, train and retain high quality managerial and technical professionals. At the entry level, we recruit professionals with managerial and engineering background. Our Company seeks to retain professional talent through career management and through providing competitive levels of compensation and a positive working environment. The table below provides details of our company’s employees (excluding contractual employees) as on March 31, 2016:

Sr. No. Particulars No. of employees/staff/workers 1 Management personnel 7

2 General Managers & Deputy General Managers 11

3 Senior Managers & Managers 38

4 Staff 179

5 Workers 781

Total 1016 Our Company’s human resource policies concentrate on creating a management and skilled manpower pool through enhanced training and development activities and conceptualizing key responsibilities for them. Insurance We maintain comprehensive fire and special perils insurance cover for the majority of our assets, which covers material damage, due to fire, accidents and natural disasters including earthquakes as well as storm, typhoon, flood indemnity, lightening, aircraft damage, missile testing operations, riot, strike and malicious damage. In addition, we maintain marine insurance to cover losses caused by sea perils, theft or non-delivery of products we ship to customers overseas and the raw materials and equipment we import. Similarly, we insure shipment of our products and raw materials while in transit within India against such losses. Intellectual Property Rights

Our trademark and the logo is registered under the Trademark Act 1999 and the same stand transferred to our Company. Our Company has 18 trademarks / brand names registered for our products and have made an application for registration of one trademark. Properties The following table sets forth the significant properties owned by us:

Sr. No.

Address of Property

Transferor Name

Area Use of property

Status

1. City Survey No. 136/1 on Aerodrome Road, Jamnagar 361 006

Nawanagar State

1,15,276.79 Sq. Mtrs.

Factory and Residential quarters

Freehold The property has been charged in favour of the Bankers of the Company for their borrowings.

2. City Survey Nos. 139 & 141 on Aerodrome Road, Jamnagar 361 006

Acquired by Government of Gujarat for the Company

19,243.88 Sq. Mtrs.

Acquired for expansion and utilities

Land acquired under Land Acquisition Act, 1894 (partly under dispute)*

* For details of the dispute, refer to the section titled “Outstanding Litigations and Material Developments” on page 96 of the Information Memorandum. In addition to above properties as on March 31, 2016, the Company has also taken certain properties on lease from various parties which are used for operation of its businesses.

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HISTORY AND CERTAIN CORPORATE MATTERS

Our Company was incorporated as Digjam Textiles Limited on June 17, 2015 under the Companies Act, 2013 with the Registrar of Companies, Gujarat, Ahmedabad. The Registered Office of the Company is situated at Aerodrome Road, Jamnagar, Gujarat – 361 006. The name of the Company has been changed from Digjam Textiles Limited to Digjam Limited with effect from March 23, 2016 pursuant to Scheme of Amalgamation between erstwhile Digjam Limited with Digjam Limited (formerly Digjam Textiles Limited) and their respective creditors and shareholders and the Certificate of Incorporation pursuant to change of name issued by the Registrar of Companies. The Corporate Identification

Number of our Company is U17123GJ2015PLC083569. Our Main Objects The main objects of our Company as set forth in the Memorandum of Association of our Company are as follows: To carry on the business of processing, scouring, combing, spinning, weaving, manufacturing and dealing in wools, jute, flax and hemp, linen, cotton, silk, all kinds of synthetic, manmade and artificial fibres like polyester, viscose, acrylic and other fibrous substances, and the preparation, bleaching, dyeing, printing or colouring of any of the said substances, and to manufacture, process, bleach, dye other materials and tops, all kinds of filaments, yarn and all varieties of fabrics, woolen/worsted or made from single/mixed fibres and other fibrous products, readymade garments and accessories, goods and by products, whether textile, felted, netted or looped, and generally to act as merchants for the purchase, sale, import and export of any of aforesaid items and to do all other things and processes which are incidental or connected with all or any of the foregoing trades, businesses or industries. Changes in the Main Objects of our Company since incorporation There have been no changes in the main objects of our Company since incorporation. Subsidiary Companies The Company has no subsidiary, joint venture or associate company.

Strategic Partners As on the date of the Information Memorandum, we do not have any Strategic Partners.

Financial Partners As on the date of the Information Memorandum, we do not have any other financial partners. Scheme of Amalgamation The Hon’ble High Court of Gujarat vide its order dated February 17, 2016 has sanctioned the Scheme of Amalgamation and has approved the Scheme of Amalgamation between erstwhile Digjam Limited with Digjam Limited (formerly Digjam Textiles Limited) and their respective Creditors and Shareholders for merger and transfer of undertaking of Digjam Limited into Digjam Textiles Limited under sections 391 to 394 of the Companies Act, 1956.

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OUR MANAGEMENT

As per the Articles of Association of our Company, we shall not have less than three or more than fifteen Directors on our Board of Directors. The following table sets forth certain details regarding the Board of Directors as on the date of the Information Memorandum:

Sr. No.

Name, Designation, Father’s Name, Address, occupation

Nation-ality

Age (Yrs)

Directorships in other entities

1 Sri Sidharth Kumar Birla Chairman S/o Sri Sudarshan Kumar Birla 29, Prithviraj Road, New Delhi – 110 011 DIN: 00004213 Occupation: Company Director & Entrepreneur Date of appointment: March 10, 2016 Term: Upto the next Annual General Meeting

Indian 58 • iPro Capital Limited

• Xpro India Limited

• Xpro Global Limited

• Xpro Global Pte. Ltd., Singapore

• Central India General Agents Limited

• Birla Brothers Private Limited

• Alpha Capital Resources Pte. Ltd., Singapore.

• Invest India

2 Sri Bharat Anand Independent Additional Director S/o Sri Brij Kishore Anand 1, Jaipur Estate, Nizamuddin East, New Delhi- 110 013 DIN: 02806475 Occupation: Lawyer Date of appointment: March 10, 2016 Term: Upto the next Annual General Meeting

UK 39 • H-D Motor Company India Private Limited

3 Ms. Meenakshi Birla Additional Director D/o Sidharth Kumar Birla 3/1, Raja Santosh Road, Alipore, Kolkata- 700 027 DIN: 00019582 Occupation: Company Director & Entrepreneur Date of appointment: March 10, 2016 Term: Upto the next Annual General Meeting

Indian 31 • iPro Capital Limited

4 Sri Golam Momen Independent Additional Director S/o Late Sri Golam Kibria 5, Dover Park, Kolkata – 700 019 DIN: 00402662 Occupation: Chairman/Director Date of appointment: March 10, 2016 Term: Upto the next Annual General Meeting

Indian 82 • Baghmari Tea Co Limited

• The Scottish Assam (India) Limited

• White Cliff Properties Private Limited

• Bengal Tea & Fabrics Limited

• Apeejay Tea Limited

• White Cliff Tea Private Limited

• Dover Tea Private Limited

• White Cliff Holdings Private Limited

• Harrisons Malayalam Limited

• Williamson Magor & Co. Limited

• Kanco Tea & Industries Limited

• White Cliff Construction Company Private Limited

• White Cliff Infrastructure Private Limited

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Sr. No.

Name, Designation, Father’s Name, Address, occupation

Nation-ality

Age (Yrs)

Directorships in other entities

5 Sri Arun Charan Mukherji Independent Additional Director S/o Late Sri Apurba Charan Mukherji CD-254, Sector-I, Salt Lake City, Kolkata- 700 064 DIN: 00063975 Occupation: Insurance (Retired) Date of appointment: March 10, 2016 Term: Upto the next Annual General Meeting

Indian 90 • NPR Finance Limited

• Ludlow Jute & Specialities Limited

• Kirloskar Pneumatic Company Limited

6 Sri Ragothaman Sethumadhava Rao Independent Director S/o Sri Sethumadhava Rao C-3, Golden Gate Apartments, New No. 33, Habibullah Road, T Nagar, Chennai – 600 017 DIN: 00042395 Occupation: Consulting Date of appointment: June 17, 2015 Term: Upto the next Annual General Meeting

Indian 70 • The Bombay Dyeing and Manufacturing Company Limited

• Xpro India Limited

• Xpro Global Limited

• Shreyas Shipping and Logistics Limited

• Shreyas Relay Systems Limited

• National Peroxide Limited

• Ultramarine & Pigments Limited

• ABT Finance Limited

7 Sri Champa Lal Rathi Additional Director S/o Sri Laxmi Narayan Rathi Flat No. 701, Christa- I, Apollo DB City, Nipania, Indore – 452 010 DIN: 00012392 Occupation: Independent Profession Date of appointment: March 10, 2016 Term: Upto the next Annual General Meeting

Indian 70 • Drap Leasing and Finance Private Limited

• Drap Plastics Private Limited

• VXL Technologies Limited

8 Sri Chandrasekharan Bhaskar Managing Director and Chief Executive Officer wef March 18, 2016 S/o Late Sri Venkatramiyer Chandrasekharan C-2/2522, Vasant Kunj, New Delhi – 110 070 DIN: 00003343 Occupation: Service Date of appointment: June 17, 2015 Term: Period upto December 31, 2017

Indian 61 • Xpro India Limited

• Xpro Global Limited

• Xpro Global Pte. Ltd., Singapore

• Kriti Industries (India) Limited

• Organization of Plastics Processors of India

• Market Café Foods Limited

• Holland & Sherry India Private Limited

• Prosperous Healthy Life Private Limited

Brief Profile of Directors Sri Sidharth Kumar Birla, aged 58 years, Chairman of our Company, is a Science Honours Graduate and holds a Master’s degree in Business Administration from IMD, Lausanne, Switzerland and has completed OPM (Owner – President Management) programme at Harvard Business School. He has extensive experience of over 36 years in the fields of Finance, Marketing, General Management, Corporate Governance, Company Law, Strategic Issues, Corporate and Financial Structuring, Resource Mobilisation, Acquisitions and Disinvestments. He is past President of the Federation of Indian Chambers of Commerce & Industry. Sri Sidharth Kumar Birla is also Chairman of Xpro India Limited and is on the Board of Alpha Capital Resources Pte. Ltd., Singapore, Birla Brothers Private Limited, Central India General Agents Limited, Invest India, iPro Capital Limited, Xpro Global Limited and Xpro Global Pte. Ltd., Singapore. He is Member of Audit Committee of Birla Brothers Private Limited, member of Remuneration and Nominations Committee and Chairman of Committee of Directors of Xpro India Limited and our Company.

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Sri Bharat Anand, aged 39 years, is an Economics and Law Graduate and Member of the Bar Council of Delhi and Solicitor, England and Wales. After working for eight years in the London office of Freshfields Bruckhaus Deringer, he joined Khaitan & Co. LLP and is Partner in their Corporate Department. His area of expertise is mergers and acquisitions, corporate and commercial joint ventures and collaborations and he has advised several major transactions in these areas. Sri Anand has been ranked amongst India’s leading Second Generation Lawyers. Sri Bharat Anand is a Director on the Board of H D Motor Company India Private Limited. He is member of Audit Committee, Remuneration & Nominations Committee and Committee of Directors of the Company. Ms. Meenakshi Birla, aged 31 years, is a graduate in Business Administration and is a post graduate in Marketing from Cass Business School, City University, London. She is a member of Audit and Corporate Social Responsibility Committee and Committee of Directors of the Company. She has been appointed as an Additional Director on the Board of iPro Capital Limited. Sri Golam Momen, aged 82 years, is a businessman of repute and is well known in Tea trade Industry. He holds expertise in marketing of teas for over two decades and holds general expertise in marketing of products, besides expertise in packaging of teas for purposes of marketing. He is Chairman of Dover Tea Private Limited, White Cliff Construction Co. Private Limited, White Cliff Infrastructure Private Limited, White Cliff Holdings Private Limited, White Cliff Tea Private Limited, White Cliff Properties Private Limited He is Director on the Boards of Apeejay Tea Limited, Baghmari Tea Co. Limited, Bengal Tea & Fabrics Limited, Harrisons Malayalam Limited, Kanco Tea & Industries Limited, The Scottish Assam (India) Limited and Williamson Magor & Co. Limited.

He is Chairman of Shareholders/Investors Grievance & Remuneration Committees and member of Audit and Share Transfer Committees of Bengal Tea & Fabrics Limited He is Chairman of the Remuneration Committee of Harrisons Malayalam Limited He is also member of the Audit Committee of The Scottish Assam (India) Limited He is also member of Remuneration Committee of Apeejay Tea Limited and Kanco Tea & Industries Limited Besides, he is member of Investors Grievance Committee of Williamson Magor & Co. Limited He is the Chairman of the CSR Committee of the Company and member of the Audit and Remuneration & Nominations Committees of the Company. Sri Arun Charan Mukherji, aged 90 years, is past Chairman of New India Assurance Company Limited and has vast knowledge and experience. Sri Mukherji is a Director on the Boards of Kirloskar Pneumatic Co. Limited, Ludlow Jute and Specialities Limited and NPR Finance Limited He is Chairman of Audit Committees of Kirloskar Pneumatic Co. Limited and Ludlow Jute and Specialities Limited and a member of Audit Committee of NPR Finance Limited He is Chairman of Remuneration & Nominations Committee and member of the Audit Committee, Stakeholders Relationship Committee and Committee of Directors of the Company.

Sri Ragothaman Sethumadhava Rao, aged 70 years, is a Commerce Graduate and Chartered Accountant. He is presently self-employed professional and was formerly a senior official of ICICI Limited. He has to his credit vast experience of about 41 years in the field of finance. Sri S. Ragothaman is a Director on the Boards of ABT Finance Limited, Bombay Dyeing and Manufacturing Co. Limited, National Peroxide Limited, Shreyas Relay Systems Limited, Shreyas Shipping & Logistics Limited, Ultramarine & Pigments Limited, Xpro India Limited and Xpro Global Limited Sri Ragothaman is Chairman of Audit Committee and Remuneration Committee of Shreyas Relay Systems Limited, Member of Audit Committee and Remuneration Committee of Shreyas Shipping & Logistics Limited, Member of Audit Committee and Remuneration Committee of The Bombay Dyeing & Manufacturing Co. Limited, Member of Audit Committee of National Peroxide Limited, Chairman of the Audit Committee of Xpro India Limited He is Chairman of Audit Committee and member of the Remuneration & Nominations Committee of the Company. Sri Champa Lal Rathi, aged 70 years, is a Commerce and Law Graduate as well as Fellow Member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India. He has vast expertise in managing the affairs of large industrial undertakings and has experience of about 46 years in manufacturing industries like textiles, plastics, edible oil, light engineering, etc. at top management levels in India and abroad. He is a director in Drap Leasing & Finance Private Limited, Drap Plastics Private Limited and VXL Technologies Limited He is a member of Audit Committee of VXL Technologies Limited and Chairman of Stakeholders Relationship Committee of our Company.

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Sri Chandrasekharan Bhaskar, aged 61 years, is a B.Tech (Chem.), MIMA, FIPI, PGDM (IIM-Cal). He is having expertise in operations, management, marketing and general management and is having an experience of over 38 years in consulting and in industry. He has been Managing Director and Chief Executive Officer of Xpro India Limited since a long time. He is a Director of Holland & Sherry India Private Limited, Kriti Industries (India) Limited, Market Café Foods Limited, Prosperous Healthy Life Private Limited, Xpro Global Limited and Xpro Global Pte. Ltd., Singapore and a member of the Executive Committee and President of Organisation of Plastics Processors of India. He is member of Stakeholders Relationship Committee, Committee of Directors and Corporate Social Responsibility Committee of Xpro India Limited and our Company.

Relationship between the Directors Following Directors of our Company are related to each other:

Sr. No. Name of the Director Related to Nature of Relationship

1. Sri Sidharth Kumar Birla Ms. Meenakshi Birla Father

2. Ms. Meenakshi Birla Sri Sidharth Kumar Birla Daughter

None of our Directors, have held or are holding directorships in any listed companies whose shares have been or were suspended from being traded on the BSE and / or the NSE or whose shares have been or were delisted from the stock exchange(s). We also confirm that:

• we have not entered into any arrangement or understanding with our major shareholders, customers, suppliers or others, pursuant to which our Director were selected as Director or member of Senior Management.

• the service contracts entered into with our Managing Director / Whole Time Director does not provide for any benefit upon termination of employment except the retirement benefits payable to them as Provident Fund, Superannuation and Gratuity as per the policies of our Company.

Remuneration of our Directors The Board of Directors at their Meeting held on March 10, 2016 has appointed Sri C. Bhaskar as Managing Director & Chief Executive Officer effective March 18, 2016 upto December 31, 2017 on either a remuneration comprising of salary, commission (not exceeding 2% of net profits), perquisites and other benefits/allowances as may be decided by the Board from time to time, subject in aggregate to a maximum of 5% of the net profits of the Company as per relevant calculation or where in any financial year, the Company has no/inadequate profits, remuneration by way of salary, allowances and benefits as per the rules of the Company within the

applicable limits (presently ` 5 lac per month) of Schedule V of the Act, whichever is higher. Accordingly he is paid a salary of ` 2,30,000 per month and benefits/perquisites as per the rules of the Company (well within the limits prescribed). All the other Directors receive remuneration by way of sitting fee for attending the meetings of the Board and Committees of Directors of the Company. Corporate Governance Upon the listing agreement pursuant to the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to be entered into with the Stock Exchanges, various compliances including with respect to corporate governance will be applicable to us immediately upon the listing of our Company’s Equity Shares on the Stock Exchanges. To comply therewith, our Company has appointed Independent Directors to its Board and constituted the following Committees of the Board: 1. Audit Committee The Audit Committee was constituted by our Board in their meeting held on March 10, 2016 in accordance with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Audit Committee presently comprises of:

Sr. No. Name of Member Designation Remarks 1. Sri Ragothaman Sethumadhava Rao Chairman Independent Director

2. Sri Arun Charan Mukherji Member Independent Director

3. Sri Golam Momen Member Independent Director 4. Sri Bharat Anand Member Independent Director 5. Ms. Meenakshi Birla Member Non Executive Director

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Our Company Secretary is the Secretary to the Committee. 2. Remuneration and Nominations Committee The Remuneration and Nominations Committee was constituted by our Board in their meeting held on March 10, 2016 in accordance with the requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Remuneration and Nominations Committee presently comprises of:

Sr. No. Name of Member Designation Remarks 1. Sri Arun Charan Mukherji Chairman Independent Director

2. Sri Sidharth Kumar Birla Member Non Executive Director

3. Sri Bharat Anand Member Independent Director 4. Sri Golam Momen Member Independent Director 5. Sri Ragothaman Sethumadhava Rao Member Independent Director

Our Company Secretary is the Secretary to the Committee. 3. Stakeholders Relationship Committee The Stakeholders Relationship Committee was constituted by our Board in their meeting held on March 10, 2016 in accordance with the requirements of Section 178 of the Companies Act, 2013 and Regulation 20 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Stakeholders Relationship Committee presently comprises of:

Sr. No. Name of Member Designation Remarks 1. Sri Champa Lal Rathi Chairman Non Executive Director

2. Sri Arun Charan Mukherji Member Independent Director

3. Sri Chandrasekharan Bhaskar Member Executive Director

Our Company Secretary is the Secretary to the Committee. Interests of Directors All of our directors may be deemed to be interested to the extent of remuneration or fees, if any, payable to them, for attending meetings of the Board or a committee thereof as well as to the extent of other remuneration and / or reimbursement of expenses and / or commission, if any, payable to them and to the extent of related party transactions. Our Directors may also be regarded as interested in the Equity Shares, if any, held by them or that may be subscribed by and allotted to the companies, firms, and trusts, if any, in which they are interested as directors, members, promoters, and /or trustees pursuant to this Information Memorandum. Except for Sri Sidharth Kumar Birla and Ms. Meenakshi Birla, who represent the Promoter Group, none of our Directors are interested in the promotion of our Company.

Shareholding of our Directors

Sr. No. Name of the Shareholders No. of Equity Shares % of holding 1. Sri Sidharth Kumar Birla 50000 0.06

2. Ms. Meenakshi Birla 324 0.00

3. Sri Arun Charan Mukherji 116 0.00

4. Sri Ragothaman Sethumadhava Rao 723 0.00

5. Sri Chandrasekharan Bhaskar 2100 0.00

Changes in the Board of Directors since incorporation

Sr. No. Name of the Directors Date of Appointment Date of Cessation 1. Sri Chandrasekharan Bhaskar June 17, 2015 -

2. Sri Ragothaman Sethumadhava Rao June 17, 2015 -

3. Sri. Satish Shah June 17. 2015 March 10, 2016

4. Sri Sidharth Kumar Birla March 10, 2016 -

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Sr. No. Name of the Directors Date of Appointment Date of Cessation

5. Ms. Meenakshi Birla March 10, 2016 -

6. Sri Champa Lal Rathi March 10, 2016 -

7. Sri Bharat Anand March 10, 2016 -

8. Sri Arun Charan Mukherji March 10, 2016 -

9. Sri Golam Momen March 10, 2016 -

Organisation Structure

Key Managerial Personnel In addition to Sri C. Bhaskar, Managing Director & Chief Executive Officer, the following are Key Managerial Personnel of our Company.

Name Designation Age (years)

Qualification Experience (years)

Date of Joining

Sri Jatin Jain Company Secretary 30 Company Secretary & LLB

9 January 28, 2016

Sri Satish Shah Vice President & Chief Financial Officer

61 Chartered Accountant

35 March 10, 2016

All our Key Managerial Personnel are permanent employees of our Company.

Company Secretary

Executive Vice

President- Legal

Executive Vice

President

(Sales & Marketing)

Executive Vice

President - Exports Vice President

& Chief

Financial Officer

Vice President

(Material & Admin)

President

& Chief Operating Officer

Board of

Directors

Managing Director

& Chief Executive Officer

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OUR PROMOTER

The Promoters of our Company are Sri Sudarshan Kumar Birla and Sri Sidharth Kumar Birla. 1. Sri Sudarshan Kumar Birla

Sri Sudarshan Kumar Birla, Chairman Emeritus, Digjam Limited, aged 81 years, is an entrepreneur and Director of various companies. He has wide experience of over 63 years in the field of Finance, Marketing, General Management, Board level Corporate Governance, Strategic Issues, Corporate and Finance Structuring, Resource Mobilization, Planning and Budgeting. He was President of various leading Chambers of Commerce like The Federation of Indian Chamber of Commerce, New Delhi, Chamber of Indian National Committee of International Chamber of Commerce, New Delhi and Indian Chamber of Commerce, Kolkata, Chamber of Commerce of G-77 countries of United Nations, New York. He was previously a member of various Government of India bodies including Prime Minister’s National Integration Council from 1991 to 1996, Delhi and member of the official Indian delegation to UNCTAD’72 and CAFEA’66. He is associated with several education and philanthropic institutions.

2. Sri Sidharth Kumar Birla

Sri Sidharth Kumar Birla, aged 58 years, is a Science Honours Graduate and holds a Master’s degree in Business Administration from IMD, Lausanne, Switzerland and has completed OPM (Owner – President Management) programme at Harvard Business School. He has extensive experience of over 36 years in the fields of Finance, Marketing, General Management, Corporate Governance, Company Law, Strategic Issues, Corporate and Financial Structuring, Resource Mobilisation, Acquisitions and Disinvestments. He is past President of the Federation of Indian Chambers of Commerce & Industry. Other confirmation Our Promoters have not been declared as willful defaulters by the RBI or any other Governmental authority and there are no violations of securities laws committed by them in the past or are pending against them.

Interest of Promoter Our Promoters shall be deemed as interested to the extent of Equity Shares held by him or by the companies / firms / ventures promoted by him, if any and dividend or other distributions payable to him in respect of the said Equity Shares. Except as stated above and in the section titled “Financial Information” on page 73 of the Information Memorandum, and to the extent of shareholding in our Company, our Promoters do not have any other interest in our business. Related party transactions For details of related party transactions refer to “Financial Information” on page 73 of the Information Memorandum.

Passport No. : Z2250614 PAN : AEKPB3108A

Bank A/c No. : 00082560017753 with HDFC Bank

Passport No. : Z2012258 PAN : AEKPB3109B

Bank A/c No. : 00031000287002 with HDFC Bank

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OUR PROMOTER GROUP

Given below is the list of entities which forms part of our Promoter Group. In addition to the companies as disclosed below, Smt. Sumangala Birla and Smt. Madhushree Birla, relatives of the Promoters form part of the promoter group of our Company. None of the Promoter Group Companies have made any public issue in the preceding three years. None of the Promoter Group Companies has become a sick company under the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 and is not under winding up or liquidation. For details on litigations and disputes pending against the Promoter Group Entities please refer to the section titled “Outstanding Litigations and Material Developments” on page 96 of the Information Memorandum. 1. Birla Eastern Limited 2. Birla Holdings Limited 3. Central India General Agents Limited 4. Janardhan Trading Co. Limited 5. iPro Capital Limited 6. Sukriti Education Society 7. Sushila Birla Memorial Institute 8. Nathdwara Investment Co. Limited

1. Birla Eastern Limited

Birla Eastern Limited was incorporated on September 19, 1979 under the Companies Act, 1956 with the Registrar of Companies, Kolkata and received Certificate of Commencement of Business dated September 25, 1979.The Registered Office of the company is situated at 9/1, R N Mukherjee Road, Kolkata – 700 001. The CIN of the company is U74140WB1979PLC032247. The company is engaged in the business of consultancy, providing technical and managerial and other services and to carry on business of traders, dealers etc. of fabrics. The equity shares of Birla Eastern Limited are not listed on any stock exchange. Board of Directors As on date of the Information Memorandum, the Board of Directors of Birla Eastern Limited comprises of the following persons:

• Sri Sudarshan Kumar Birla

• Smt. Sumangala Devi Birla

• Smt. Vasusri Jhaver

• Sri Indra Kishore Kejriwal

• Sri Buddhadev Bose

• Sri Nandlal Hamirwasia

• Sri Balkrishna Dalmia Shareholding Pattern (as on March 31, 2016)

Name of the Shareholder No. of Equity Shares % of Shareholding Central India General Agents Limited 38,71,762 49.49

iPro Capital Limited 3,67,450 4.70

Ajax Business Services Limited 18,000 0.23

Janardhan Trading Co. Limited 7,58,275 9.70

Nathdwara Investment Co. Limited 65,950 0.84

Madho Properties Private Limited 1,60,000 2.04

Sri S K Birla 59,349 0.76

Sri S. K. Birla (HUF) 95,000 1.21

Sri Sidharth Kumar Birla 3,800 0.05

Smt. Sumangala Birla 1,59,100 2.04

Smt. Vasusri Jhaver 4,27,500 5.46

Ms. Meenakshi Birla 4,28,750 5.48

Sri B. D. Bose 1 0.00

Sukriti Education Society 8,42,000 10.77

Sushila Birla Memorial Institute 5,65,375 7.23

Total 78,22,312 100.00

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Financial performance The audited financial results of Birla Eastern Limited for the financial years ended March 31, 2015, 2014 and 2013 are set forth below.

(` in Lacs)

Particulars March 31, 2015 March 31, 2014 March 31, 2013 Total Revenue 414.14 379.27 205.50

Net profit after tax 89.40 106.38 (39.18)

Equity Share Capital 782.23 782.23 783.23

Reserves & Surplus* 1206.22 1116.82 756.10

Net Worth* 1988.45 1899.05 1539.33

Book Value (in `) of face value ` 10each* 25.42 24.28 19.68

Basic EPS (in `) of face value ` 10each 1.14 1.36 (0.50)

Diluted EPS (in `) of face value ` 10each 1.14 1.36 (0.50)

*including Capital Reserve.

2. Birla Holdings Limited

Birla Holdings Limited was originally incorporated GCC Investment & Trading Company Limited on April 20, 1982 under the Companies Act, 1956 with the Registrar of Companies, Kolkata and received Certificate of Commencement of Business dated April 27, 1982. The name of the Company was changed to Birla Holdings Limited pursuant to the fresh Certificate of Incorporation consequent on change of name on June 15, 2006. The Registered Office of the company is situated at 9/1, R N Mukherjee Road, Kolkata – 700 001. The CIN of the company is U67120WB1982PLC034802. The company is engaged in the business of investment and acquisition, holding and dealing in shares and stocks. The equity shares of Birla Holdings Limited are not listed on any stock exchange. Board of Directors As on date of the Information Memorandum, the Board of Directors of Birla Holdings Limited comprises of the following persons:

• Sri Umrao Chand Jain

• Sri Nand Kishore Poddar

• Sri Pawan Kumar Chhawchharia

Shareholding Pattern (as on March 31, 2016)

Name of the Shareholder No. of Equity Shares % of Shareholding Birla Eastern Limited (holding company) 32,49,993 100.00

Sri Sajjan Kumar Agarwal 1 0.00

Sri Ram Khiloni Agarwal 1 0.00

Sri Nand Kishore Agarwalla 1 0.00

Sri Ashok Kumar Dassani 1 0.00

Sri Pawan Kumar Chawchharia 1 0.00

Sri Jwala Prasad Agrawal 1 0.00

Sri Umrao Chand Jain 1 0.00

Total 32,50,000 100.00

Financial performance The audited financial results of Birla Holdings Limited for the financial years ended March 31, 2016, 2015 and 2014 are set forth below.

(` in Lacs)

Particulars March 31, 2016 March 31, 2015 March 31, 2014 Total Revenue 22.03 24.33 35.51

Net profit after tax (0.18) (88.15) (3.88)

Equity Share Capital 325.00 325.00 325.00

Reserves & Surplus 1409.49 1409.67 1497.81

Net Worth 1734.49 1734.67 1822.81

Book Value (in `) of face value ` 10each 53.37 53.37 56.09

Basic EPS (in `) of face value ` 10each (0.01) (2.71) (0.12)

Diluted EPS (in `) of face value ` 10each (0.01) (2.71) (0.12)

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3. Central India General Agents Limited

Central India General Agents Limited was incorporated on February 27, 1942 under The Indore Companies Act, VII of 1940 with the Registrar of Companies, Indore and received Certificate of Commencement of Business dated March 23, 1942.The Registered Office of the company was shifted from the State of Madhya Pradesh to the State of West Bengal during 1987 and is situated at 9/1, R N Mukherjee Road, 14th Floor, Kolkata – 700 001. The CIN of the company is U51909WB1942PLC042140. The company is engaged in the business of Investment and buying, selling and trading of all kinds of produce and merchandise etc. The Company is Non-Banking Financial Company (Not Deposit Taking) registered with Reserve Bank of India. The equity shares of Central India General Agents Limited are not listed on any stock exchange.

Board of Directors As on date of the Information Memorandum, the Board of Directors of Central India General Agents Limited comprises of the following persons:

• Smt. Sumangala Devi Birla

• Sri Sidharth Kumar Birla

• Sri Umrao Chand Jain

• Sri Indra Kishore Kejriwal

• Smt. Anusri Pramanik – Executive Director

Shareholding Pattern (as on March 31, 2016)

Name of the Shareholder No. of Equity Shares % of Shareholding Nathdwara Investment Company Limited 1,05,200 35.79

Birla Eastern Limited 10,192 3.46

Birla Holdings Limited& 3 Nominees 5,838 1.99

Ajax Business Services Limited 83 0.03

Sri S. K. Birla (HUF) 24,000 8.17

Sri S. K. Birla 34,518 11.74

Smt. Sumangala Birla 55,000 18.71

Sri Sidharth Kumar Birla 35,010 11.91

Smt. Vasusri Jhaver 12,084 4.11

Ms. Meenakshi Birla 12,001 4.09

Total 2,93,926 100.00

Financial performance The audited financial results of Central India Agents Limited for the financial years ended March 31, 2015, 2014 and 2013 are set forth below.

(` in Lacs)

Particulars March 31, 2015 March 31, 2014 March 31, 2013 Total Revenue 2513.49 94.99 215.79

Net profit after tax 1538.99 3.06 (878.17)

Equity Share Capital 29.39 29.39 29.39

Preference Share Capital 140.00 140.00 140.00

Reserves & Surplus* 8566.46 7060.49 7072.33

Net Worth* 8735.85 7229.88 7241.72

Book Value (in `) of face value ` 10each*$ 2924.49 2412.13 2416.16

Basic EPS (in `) of face value ` 10each 519.58 1.04 (298.77)

Diluted EPS (in `) of face value ` 10each 519.58 1.04 (298.77)

*including Capital Reserve

$after deducting Preference Share Capital ` 140.00 lacs 4. Janardhan Trading Co. Limited

Janardhan Trading Company Limited was originally incorporated as Jana Seva & Investments Limited on March 30, 1970 under the Companies Act, 1956 with the Registrar of Companies, Kolkata and received Certificate of Commencement of Business dated March 31, 1970.The name of the Company was changed to Janardhan Trading Company Limited pursuant to the fresh Certificate of Incorporation consequent on change of name on May 27, 1982.The Registered Office of the company is situated at 9/1, R N Mukherjee Road, 14th Floor, Kolkata – 700 001. The CIN of the company is U65992WB1970PLC027687. The company is engaged in

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the business of Investment and buying, selling and trading of shares, stocks, debentures and other securities. The Company is Non-Banking Financial Company (Not Deposit Taking) registered with Reserve Bank of India. The equity shares of Janardhan Trading Co. Limited are not listed on any stock exchange. Board of Directors As on date of the Information Memorandum, the Board of Directors of Janardhan Trading Co. Limited comprises of the following persons:

• Sri Umrao Chand Jain

• Sri Buddhadev Bose

• Sri Nand Kishore Poddar

Shareholding Pattern (as on March 31, 2016)

Name of the Shareholder No. of Equity Shares % of Shareholding Birla Eastern Limited 9,25,933 31.53

Birla Holdings Limited 5,38,173 18.32

Central India General Agents Limited 3,88,640 13.23

Nathdwara Investment Company Limited 1,72,510 5.88

iPro Capital Limited 2,81,153 9.57

Sukriti Education Society 5,82,493 19.83

Sushila Birla Memorial Institute 48,000 1.64

Total 29,36,902 100.00

Financial performance The audited financial results of Janardhan Trading Co. Limited for the financial years ended March 31, 2015, 2014 and 2013 are set forth below.

(` in Lacs)

Particulars March 31, 2015 March 31, 2014 March 31, 2013 Total Revenue 54.26 67.97 88.66

Net profit after tax (141.27) (0.72) (91.35)

Equity Share Capital 293.69 293.69 293.69

Reserves & Surplus 1562.11 1703.39 1704.10

Net Worth 1855.80 1997.08 1997.79

Book Value (in `) of face value ` 10each 63.19 68.00 68.02

Basic EPS (in `) of face value ` 10each (4.81) (0.02) (3.14)

Diluted EPS (in `) of face value ` 10each (4.81) (0.02) (3.14)

5. iPro Capital Limited

iPro Capital Limited was originally incorporated as Sutlej Cotton Mills Supply Agency Limited on October 02, 1947 under the Indian Companies Act, 1913 with the Registrar of Companies, Gwalior. The name of the Company was changed to iPro Capital Limited pursuant to the fresh Certificate of Incorporation consequent on change of name on January 7, 2008.The Registered Office of the company was shifted from Gwalior in the State of Madhya Pradesh to the State of West Bengal during 1984 and is situated at 9/1, R N Mukherjee Road, Kolkata – 700 001. The CIN of the company is U51491WB1947PLC061685. The company is engaged in the business of investment and management advisor etc. The equity shares of iPro Capital Limited are not listed on any stock exchange. Board of Directors As on date of the Information Memorandum, the Board of Directors of iPro Capital Limited comprises of the following persons:

• Sri Sidharth Kumar Birla

• Smt. Madhushree Birla

• Ms. Meenakshi Birla

• Sri Alok Maheshwary

• Sri Umrao Chand Jain

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Shareholding Pattern (as on March 31, 2016)

Name of the Shareholder No. of Equity Shares % of Shareholding Birla Eastern Limited 3,04,264 17.38

Central India General Agents Limited 6,90,331 39.45

Janardhan Trading Company Limited 2,42,780 13.87

Nathdwara Investment Company Limited 44,666 2.55

Birla Holdings Limited 66,790 3.82

Sukriti Education Society 45,600 2.61

Sushila Birla Memorial Institute 1,11,800 6.39

Astra Merchandising Private Limited 1,50,000 8.57

Sri Sidharth Kumar Birla 976 0.06

Public 92,793 5.30

Total 17,50,000 100.00 Financial performance The audited financial results of iPro Capital Limited for the financial years ended March 31, 2016, 2015 and 2014 are set forth below.

(` in Lacs)

Particulars March 31, 2016 March 31, 2015 March 31, 2014 Total Revenue 114.89 233.34 127.53

Net profit after tax 56.16 164.95 71.66

Equity Share Capital 175.00 175.00 175.00

Preference Share Capital 125.00 125.00 125.00

Reserves & Surplus 3680.64 3648.54 3507.97

Net Worth 3980.64 3948.54 3807.97

*Book Value (in `) of face value ` 10 each 220.32 218.49 210.46

Basic EPS (in `) of face value ` 10 each 3.03 9.25 3.92

Diluted EPS (in `) of face value ` 10 each 3.03 9.25 3.92

* After deducting Preference Share Capital ` 125.00 lacs 6. Nathdwara Investment Co. Limited Nathdwara Investment Co. Limited was originally incorporated as Hi-Fly Investment Limited on July 1, 1987 under the Companies Act, 1956 with the Registrar of Companies, Kolkata and received Certificate of Commencement of Business dated July 28, 1987.The name of the Company was changed to Nathdwara Investment Co. Limited pursuant to the fresh Certificate of Incorporation consequent on change of name on September 22, 1994. The Registered Office of the company is situated at 9/1, R N Mukherjee Road, Kolkata – 700 001. The CIN of the company is U17226WB1987PLC042622. The company is engaged in the business of acquiring, holding and dealing in Shares & Securities issued by Joint Stock Companies, etc. The Company is Non-Banking Financial Company (Not Deposit accepting) registered with Reserve Bank of India. The equity shares of Nathdwara Investment Co. Limited are not listed on any stock exchange. Board of Directors As on date of the Information Memorandum, the Board of Directors of Nathdwara Investment Co. Limited comprises of the following persons:

• Sri Sudarshan Kumar Birla

• Smt. Sumangala Devi Birla

• Sri Indra Kishore Kejriwal

• Sri Jwala Prasad Agrawal Shareholding Pattern (as on March 31, 2016)

Name of the Shareholder No. of Equity Shares % of Shareholding Birla Eastern Limited 6,07,000 15.18

Birla Holdings Limited 2,05,000 5.12

Central India General Agents Limited 12,10,410 30.26

iPro Capital Limited 2,00,000 5.00

Sukriti Education Society 3,13,100 7.83

Sushila Birla Memorial Institute 3,12,300 7.81

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Name of the Shareholder No. of Equity Shares % of Shareholding Sri Sudarshan Kumar Birla 1,23,000 3.08

Smt. Sumangala Birla 2,34,000 5.85

Smt. Vasusri Jhaver 3,02,990 7.57

Ms. Meenakshi Birla 3,02,000 7.55

M/s Sudarshan Kumar Sidharth Kumar Birla HUF 1,90,000 4.75

Total 39,99,800 100.00 Financial performance The audited financial results of Nathdwara Investment Co. Limited for the financial years ended March 31, 2015, 2014 and 2013 are set forth below.

(` in Lacs)

Particulars March 31, 2015 March 31, 2014 March 31, 2013 Total Revenue 16.12 16.53 18.04

Net profit after tax 8.16 10.49 12.56

Equity Share Capital 399.98 399.98 340.01

Preference Share Capital 75.00 75.00 155.00

Reserves & Surplus* 138.98 130.82 100.30

Net Worth* 613.96 605.80 595.31

*Book Value (in `) of face value ` 10 each$ 13.47 13.27 12.95

Basic EPS (in `) of face value ` 10 each 0.20 0.30 0.37

Diluted EPS (in `) of face value ` 10 each 0.20 0.30 0.37

* including Capital Reserve $ After deducting Preference Share Capital

7. Sukriti Education Society Registered as a Society on March 19, 1981 under the West Bengal Societies Registration Act, 1961 with the Registrar of Firms, Societies and Non Trading Corporations, West Bengal, Kolkata. Governing Body Members of the Society As on date of the Information Memorandum, the Governing Body Members of Sukriti Education Society comprises of the following persons:

• Sri Sudarshan Kumar Birla

• Smt. Sumangala Birla

• Sri Sidharth Kumar Birla

• Sri Buddhadev Bose

• Sri J P Agarwal

• Sri Umrao Chand Jain

• Sri A K Dassani Financial performance The audited financial results of Sukriti Education Society for the financial years ended March 31, 2015, 2014 and 2013 are set forth below.

(` in Lacs)

Particulars March 31, 2015 March 31, 2014 March 31, 2013 Corpus Fund 1,934.10 1,783.21 1,509.69

Income 1,276.69 1,273.47 1,052.79

Surplus 150.89 273.52 195.20

8. Sushila Birla Memorial Institute

Registered as a Society on March 5, 1987 under the West Bengal Societies Registration Act, 1961 with the Registrar of Firms, Societies and Non Trading Corporations, West Bengal, Kolkata Trustees As on date of the Information Memorandum, the Governing Body Members of Sushila Birla Memorial Institute comprises of the following persons:

71

• Smt. Sumangala Birla

• Sri Sidharth Kumar Birla

• Sri Buddhadev Bose

• Sri Umrao Chand Jain Governing Body Members of the Society As on date of the Information Memorandum, the Governing Body Members of Sukriti Education Society comprises of the following persons:

• Smt. Sumangala Birla

• Sri Sidharth Kumar Birla

• Sri Buddhadev Bose

• Sri J P Agarwal

• Sri Umrao Chand Jain

• Sri D. D. Kedia

• Sri A K Dassani Financial performance The audited financial results of Sushila Birla Memorial Institute for the financial years ended March 31, 2015, 2014 and 2013 are set forth below.

(` in Lacs)

Particulars March 31, 2015 March 31, 2014 March 31, 2013 Corpus Fund 546.04 516.87 517.55

Income 86.15 49.64 39.79

Surplus 29.17 (0.68) (6.40)

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DIVIDEND POLICY

The declaration and payment of dividend on the Equity Shares will be recommended by our Board and approved by the shareholders of our Company at their discretion and will depend on a number of factors, including the results of operations, earnings, capital requirements and surplus, general financial conditions, contractual restrictions, applicable Indian legal restrictions and other factors considered relevant by the Board. Our Company has not declared any dividend since incorporation.

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FINANCIAL INFORMATION

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF DIGJAM LIMITED Report on the Financial Statements We have audited the accompanying financial statements of DIGJAM LIMITED (formerly DIGJAM TEXTILES LIMITED) (“the Company”), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the period17thJune, 2015 (Date of Incorporation) to 31st March, 2016 (“the period”), and a summary of the significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements The Company’s Board of Directors is responsible for the matters 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 prescribed under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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; and design, implementation and maintenance of adequate internal financial controls, that were 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. 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 and the Order under section 143 (11) of the Act. We conducted our audit of the financial statements 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 the 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 of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s 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. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements 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, of the state of affairs of the Company as at 31st March, 2016, and its loss and its cash flows for the period ended on that date.

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Report on Other Legal and Regulatory Requirements 1. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge

and belief were necessary for the purposes of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as it

appears from our examination of those books. c) The Balance Sheet, the Statement of Profit and Loss, and the 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 Accounting Standards prescribed

under section 133 of the Act. e) On the basis of the written representations received from the directors as on 31stMarch, 2016 taken on

record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its financial

statements – Refer Note 18 to the financial statements. ii. The Company did not have any long-term contracts including derivative contracts for which there

were any material foreseeable losses. iii. There were no amounts which were required to be transferred to the Investor Education and

Protection Fund by the Company. 2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central

Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

Place: New Delhi Date: May 18, 2016

For Deloitte Haskins and Sells LLP Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

(Kartikeya Raval) (Partner)

(MembershipNo.106189)

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ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT OF DIGJAM LIMITED (formerly DIGJAM TEXTILES LIMITED) (Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Act We have audited the internal financial controls over financial reporting of Digjam Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the period 17th June, 2015 (Date of Incorporation) to 31st March, 2016 (“the period”).

Management’s Responsibility for Internal Financial Controls The Company’s Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor’s Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

76

Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Place: New Delhi Date: May 18, 2016

For Deloitte Haskins and Sells LLP Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

(Kartikeya Raval) (Partner)

(MembershipNo.106189)

77

ANNEXURE “B” TO THE INDEPENDENT AUDITOR’S REPORT OF DIGJAM LIMITED (formerly DIGJAM TEXTILES LIMITED)

(Referred to in paragraph (2) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a

regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the Orders provided to us, we report that, the title deeds, comprising all the immovable properties of land, which are freehold, are held in the name of the Company as at the balance sheet date except the following:

Particulars of the land

Gross Block Rs. (as at the

balance sheet date)

Net Block Rs. (as at the

balance sheet date)

Remarks

Freehold land at Jamnagar, Gujarat

5,91,347 5,91,347 The said land is in the name of Birla VXL Limited (Digjam Woollen Mills) pending transfer in the name of the Company.

Immovable properties of land and buildings whose title deeds have been pledged as security for loans are held in the name of the Company based on the confirmations directly received by us from lenders.

(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Act.

(iv) The Company has not granted any loans, made investments or provided guarantees and hence reporting

under clause (iv) of the CARO 2016 is not applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2014, as amended, would apply. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the

Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie,

the prescribed cost records have been made and maintained We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.

78

(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on March 31, 2016 on account of disputes are given below:

Name of Statute

Nature of Dues

Forum where Dispute is Pending

Period to which the Amount

Relates

Amount Involved

(Rs.)

Amount Unpaid

(Rs.) Finance Act 1994

Service Tax

Customs, Excise and Service Tax Appellate Tribunal

18.04.2006 to 31.07.2006

11,74,484 10,99,484

Finance Act 1994

Service Tax

Commissioner (Appeals) Rajkot

Oct 2009 to Sept 2014

9,73,356 4,32,427

Finance Act 1994

Service Tax

Customs, Excise and Service Tax Appellate Tribunal

Oct 2009 to Sept 2014

115,15,579 106,51,909

(viii) In our opinion and according to the information and explanations given to us, the Company has not

defaulted in the repayment of loans or borrowings to financial institutions and banks. The Company has not borrowed from Government and also the Company has not issued debentures.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid /

provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013 except for the approval of the Members which will be obtained at the forth coming Annual General Meeting of the Company.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or

fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the

Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-I of the Reserve Bank of India Act, 1934. Place: New Delhi Date: May 18, 2016

For Deloitte Haskins and Sells LLP Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

(Kartikeya Raval) (Partner)

(MembershipNo.106189)

79

Digjam Limited (formerly Digjam Textiles Limited)

Balance Sheet as at March 31, 2016

(Rs.) As at

Notes March 31, 2016

EQUITY AND LIABILITIES

Shareholders’ Funds

Share Capital 3 -

Equity Share Capital Suspense 3 87,64,16,210 Preference Share Capital Suspense 3 5,00,00,000

Reserves and Surplus 4 36,44,05,679 Non-current Liabilities

Long Term Borrowings 5 9,18,75,206

Other Long Term Liabilities 6 2,25,75,500

Long Term Provisions – Employee benefits 3,54,82,229

Current Liabilities

Short Term Borrowings 7 43,95,78,462

Trade Payables 8

c. Total outstanding dues of Micro and Small Enterprises -

d. Total outstanding dues of creditors other than Micro and Small Enterprises

35,93,74,048

Other Current Liabilities 9 2,92,48,466

Short Term Provisions 10 1,85,44,301

Total 2,28,75,00,101

ASSETS

Non-current Assets

Fixed Assets

Tangible Assets 11a 1,78,23,63,322

Intangible Assets 11b 14,64,913

Long Term Loans and Advances 12 44,63,114

Current Assets

Inventories 13 32,62,23,345

Trade Receivables 14 13,12,82,639

Cash and Cash Equivalents 15 1,71,65,212

Short Term Loans and Advances 16 1,82,55,768

Other Current Assets 17 62,81,788

Total 2,28,75,00,101

Accompanying notes form integral part of the financial statements

In terms of our report attached For and on behalf of the Board

For Deloitte Haskins & Sells LLP Chartered Accountants

Sidharth Birla

Chairman Kartikeya Raval Partner

Jatin Jain Company Secretary

Satish Shah Vice President &

Chief Financial Officer

C. Bhaskar Managing Director &

Chief Executive Officer

New Delhi May 18, 2016

80

Statement of Profit and Loss

for the period 17.06.2015 to 31.03.2016 (Rs.)

Notes Period ended 31.03.2016

INCOME

Revenue from Operations 19 94,73,07,558

Other Income 20 68,13,054

95,41,20,612

EXPENSES

Cost of Materials Consumed 21 28,24,39,219

Purchase of Stock-in-Trade 22 14,41,03,354

Changes in Inventories (of Finished Goods, Work-in-progress and Stock-in-trade)

23 5,10,65,362

Employees Benefits Expense 24 18,21,27,372

Finance Costs 25 8,59,25,750

Depreciation and Amortisation Expense 11 2,17,18,257

Other Expenses 26 28,53,43,399

1,05,27,22,713

Loss before Tax (9,86,02,101)

Tax Expense -

Loss after Tax for the Period (9,86,02,101)

Earnings per Equity Share (Face Value – Rs. 10)

34

Basic and Diluted – Rs.: (1.13)

Accompanying notes form integral part of the financial statements

In terms of our report attached For and on behalf of the Board

For Deloitte Haskins & Sells LLP Chartered Accountants

Sidharth Birla

Chairman Kartikeya Raval Partner

Jatin Jain Company Secretary

Satish Shah Vice President &

Chief Financial Officer

C. Bhaskar Managing Director &

Chief Executive Officer

New Delhi May 18, 2016

81

Cash Flow Statement for the period 17.06.2015 to 31.03.2016 (Rs.)

Period ended 31.3.2016

A. Cash Flow from Operating Activities Net Loss before Tax (9,86,02,101) Adjusted for : Depreciation and Amortisation Expense 2,17,18,257 Finance Costs 8,59,25,750 Interest income (47,43,321) Loss on sale/discard of Fixed Assets 5,295 (Gain) on Foreign Exchange Fluctuation (unrealised) (6,716) Operating Profit before working capital changes 42,97,164 Adjustment for decrease in operating assets Trade receivables 6,66,55,954 Loans & Advances 69,87,318 Other receivables 39,85,084 Inventories 8,31,26,962 Adjustment for (decrease)/ increase in operating liabilities Trade Payables (6,46,24,830) Other current liabilities 27,50,409 Cash generated from operations 10,31,78,061 Direct taxes 3,84,834 Net Cash from Operating Activities … (A) 10,35,62,895 B. Cash Flow from Investing Activities Capital Expenditure on Purchase of Fixed Assets (6,48,873) Proceeds from Sale of Fixed Assets 38,150 Bank Balances not considered as Cash and Cash Equivalents – Matured 30,35,636 Interest received 47,43,321 Net Cash from Investing Activities … (B) 71,68,234 C. Cash Flow from Financing Activities Repayment of Long Term Borrowings (72,67,211) Repayment of Short Term Borrowings 2,60,02,873 Repayment of Borrowings (net) (1,87,35,662) Interest and Financial Charges (9,27,24,063) Proceeds from Issue of Equity Shares (refer note 1C) 5,00,000 Net Cash (used) in Financing Activities … (C) (11,09,59,725) Net increase/ (decrease) in Cash and Cash Equivalents (A+B+C) (2,28,596) Cash and Cash Equivalents(Opening Balance) - Add: Pursuant to Scheme of Amalgamation (refer note 1C) 39,08,708 Cash and Cash Equivalents(Closing Balance) (refer note 15(A)) 36,80,112

Notes : 1. Cash and Cash Equivalents (Refer Note No. 15A) includes foreign exchange fluctuation (unrealised) in bank

balance in foreign exchange – Rs. (746) 2. Cash Flow Statement has been prepared as per the indirect method set out in Accounting Standard-3 “Cash Flow

Statements”. 3. 4.

For non-cash transactions relating to investing and financing activities pursuant to the Scheme refer Note 1B. Cash flows have been adjusted for the balances transferred from the amalgamated company.

In terms of our report attached For and on behalf of the Board

For Deloitte Haskins & Sells LLP Chartered Accountants

Sidharth Birla

Chairman Kartikeya Raval Partner

Jatin Jain Company Secretary

Satish Shah Vice President &

Chief Financial Officer

C. Bhaskar Managing Director &

Chief Executive Officer

New Delhi May 18, 2016

82

Notes to the Financial Statements 1. Company Overview

A. DIGJAM Textiles Limited (“The Company”) was incorporated as a company limited by shares on June

17, 2015 under the Companies Act, 2013 as a wholly owned subsidiary of erstwhile Digjam Limited. A Scheme of Amalgamation (“the Scheme”) u/s 391 to 394 of the Companies Act, 1956 and the corresponding provisions of Companies Act, 2013 as applicable, between erstwhile Digjam Limited (the “Amalgamating Company”) with the Company (the “Amalgamated Company”) was sanctioned by the Hon’ble High Court of Gujarat vide Order dated February 17, 2016. The said Scheme became effective on March 17, 2016 upon filing of the certified copy of the Order with the Registrar of Companies, Gujarat and pursuant thereto, the entire business and undertaking of the Amalgamating Company stands transferred to and vested in the Company as going concern without any further act, instrument, deed as and from the Appointed Date under the Scheme i.e. close of business on June 30, 2015. The name of the Company was changed to ‘Digjam Limited’ w.e.f March 23, 2016 in terms of the Scheme of Amalgamation. The Company is engaged in the business of trading in all kinds of textiles and manufacturing of high quality woolen/worsted fabrics at Jamnagar, Gujarat under the brand “DIGJAM”.

B. In terms of the Scheme, the Company shall allot 8,76,41,621 fully paid up Equity Shares of Rs. 10 each at a premium of Rs. 5 per Equity share and 5,00,000 - 8% Non-convertible Redeemable Preference Shares of Rs. 100 each at par fully paid-up in the ratio of 1 share for every 1 share held in the Amalgamating Company. Pending allotment of such shares as at March 31, 2016 (Record Date), the face value of shares to be issued has been accounted under the respective Share Capital Suspense Accounts and the share premium under Securities Premium Suspense Account. The said allotment was completed on April 29, 2016 and the Equity Shares are to be listed on BSE and NSE as provided in the Scheme.

C. The amalgamation has been accounted for as per “The Purchase Method” prescribed under Accounting

Standard 14 - “Accounting for Amalgamations” (AS 14) issued by the Institute of Chartered Accountants of India and notified by the Central Government. Accordingly, all the assets and liabilities of the Amalgamating Company were recorded in the books of the Company, at respective fair values, as determined by an approved valuer/the management, as at the Appointed Date. Accordingly, the difference of Rs. 2,47,99,675 between the value of net assets of the Amalgamating Company as recorded in the Company’s books and the amount credited to Share Capital Suspense Account and Securities Premium Suspense Account and cancellation of inter-company balances and inter-company investments has been credited to Capital Reserve.

D. Pursuant to the Scheme of Amalgamation, the Authorised Share Capital of the Amalgamating Company

stands combined with the Authorised Share Capital of the Company and the Authorised Share Capital of the Company is reflected accordingly.

2. Significant Accounting Policies

2.1 Basis of Preparation of Financial Statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (“the Act”). The financial statements have been prepared on accrual basis under the historical cost convention, except that the Assets & Liabilities of the Amalgamating Company, transferred to and vested in the Company are recorded at their respective fair values, as on the appointed date.

2.2 Use of estimates The preparation of the financial statements in conformity with Indian GAAP required the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the period. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates as are recognised in the periods in which the results are known/materialise.

83

2.3 Fixed Assets Fixed assets are stated at cost of acquisition (i.e. fair value on the Appointed Date as determined under the Scheme of Amalgamation) less depreciation and Impairment, if any. The cost is inclusive of freight, duties, taxes, incidental expenses related to acquisition/installation. Fixed assets acquired and put to use for project purposes are capitalized when the project is ready for intended use and all costs and revenues till then are capitalized with the project cost. Projects under which tangible fixed assets are not yet ready for their intended use are carried as capital-work-in-progress at cost comprising direct cost, related incidental expenses and attributable interest.

2.4 Depreciation and Amortisation Depreciation on tangible fixed assets except Building and Plant & Machinery has been charged under Straight Line Method as per the useful life prescribed in Schedule II to the Companies Act, 2013. Depreciation on Building and Plant & Machinery has been charged on Straight Line Method over the useful life of assets as determined by the Valuer while evaluating fair value. Amortisation in respect of intangible assets is provided on straight line basis over the period of underlying contract or estimated period of its economic life.

2.5 Impairment of Assets The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of the assets exceeds the recoverable amount. The impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount.

2.6 Investments Long Term investments are stated at cost less provision for diminution in value other than temporary, if any.

2.7 Inventories Inventories include stock-in-transit/bonded warehouses and with others for manufacturing/processing/ replacement. Inventories are valued at lower of cost and net realizable value, cost is determined on the weighted average method. Finished goods and process stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

2.8 Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Sale of goods: Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer (on despatch to the buyer) and are reported net of turnover/trade discounts, returns and claims. Income from Services: Revenue is recognized on accrual basis. Dividend income on investments is accounted for when the right to receive the payment is established. Interest income is accounted on time proportion basis taking into account the amount outstanding and applicable interest rate. Others: Wherever it is not possible to determine the quantum of accrual with reasonable certainty, e.g. Insurance & other claims, these continue to be accounted for on cash basis.

2.9 Employee Benefits Contributions to Provident Fund and Superannuation Fund, which are defined contribution schemes, are made to a government administered Provident Fund and to recognised trust respectively, and are charged to the statement of Profit and Loss as incurred. The Company has no further obligations beyond its contributions to these funds.

84

Provision for gratuity, under a LIC administered fund, and compensated absences, which are in the nature of defined benefit plans, are provided based on actuarial valuations based on projected unit credit method, as at the balance sheet date. Termination benefits are recognized as expense as and when incurred.

2.10 Borrowing Cost Borrowing cost relating to (i) funds borrowed for acquisition/construction of qualifying assets are capitalised up to the date the assets are put to use, and (ii) funds borrowed for other purposes are charged to the statement of Profit and Loss.

2.11 Research & Development Expenditure Research and Development expenses of revenue nature are charged to the statement of Profit and Loss under respective heads of account and capital expenditure is added to the cost of Fixed Assets in the year in which it is incurred.

2.12 Leases Leases where the lessor retains substantially all the risks and rewards of ownership of the leased asset, are classified as operating leases. Operating lease payments are recognized as expense in the statement of Profit and Loss as per the terms of the lease.

2.13 Taxation

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.

2.14 Government Grants Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset. Project capital subsidy is credited to Capital Reserve. Other government grants or subsidies including export incentives are credited to the statement of Profit and Loss or deducted from related expenses.

2.15 Provisions, Contingent Liabilities and Contingent Assets Provisions are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources to settle the obligation in respect of which a reliable estimate can be made. Contingent liabilities, if any, are not recognized in the accounts but are disclosed by way of notes. Contingent assets are neither recognized nor disclosed in the financial statements.

2.16 Foreign Currency Transactions and Forward Contracts Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate prevailing at time of transaction. Monetary items denominated in foreign currencies and outstanding at the year-end are translated at year-end rates. Exchange differences arising on settlement of monetary items at rates different from those at which they were initially recorded are recognized as income or as expenses in the statement of Profit & Loss for the year in which they arise. Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortised over the period of the contracts if such contracts relate to monetary items as at the

85

balance sheet date. Any profit or loss arising on cancellation or renewal of such forward exchange contract is recognised as income or expense in the period in which such cancellation or renewal is made.

2.17 Segment reporting The Company identifies primary segments based on dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the Executive Management in deciding how to allocate resources and in assessing performance. The accounting policies adopted for segment reporting are in line with accounting policies of the company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.

2.18 Cash flow statement Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.19 Operating Cycle Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of classification of assets and liabilities as current and non-current.

3. Share Capital (Rs.)

As at 31.3.2016

Authorised (Refer Note No. 1D)

10,00,50,000 Equity Shares of Rs. 10 each 100,05,00,000

25,00,000 Preference Share of Rs. 100 each 25,00,00,000

125,05,00,000

Issued, Subscribed & fully paid up

Nil

-

In terms of the Scheme, the paid-up Equity Share Capital of Rs. 5,00,000 held by the erstwhile holding Company stands cancelled. (Refer Note No. 1B).

3.1 Equity shares having a par value of Rs.10 each carry one vote per share without restrictions and are entitled to dividend, as and when declared. All shares rank equally with regard to the Company’s residual assets after distribution of all preferential amounts.

The Non-Convertible Redeemable Preference Shares of Rs. 100 each to be allotted under the Scheme of

Amalgamation on the same terms and conditions on which the said shares were allotted by the Amalgamating Company and are entitled to dividend @ 8% p.a. (non-cumulative) in preference to the Equity Shares but are not entitled to vote at the General Meeting of the Company unless dividend has been in arrears for minimum 2 years. For purpose of determination/accrual of all rights (including the right of redemption), the date of allotment viz. March 27, 2015 is deemed to be the relevant date. The Preference Shares are non-participating and shall have preferential right to repayment in the case of winding up or repayment of capital of the amount of the share capital paid-up.

The Non-Convertible Redeemable Preference Shares are redeemable at par at the end of 10 years from March 27, 2015 with an option to the Company to redeem at any time earlier thereto.

86

3.2 Share Capital Suspense

Shares to be issued pursuant to Scheme of Amalgamation (Refer Note No. 1B)

Particulars Amount Rs.

8,76,41,621 Equity Shares of Rs. 10 each 87,64,16,210

5,00,000 8% Non-Convertible Redeemable preference shares of Rs. 100 each 5,00,00,000

3.3 Reconciliation of number of Shares

Equity Shares As at 31.3.2016 Number of Shares at the beginning of the period -

Shares issued and allotted during the period on incorporation 50,000

Cancellation on account of the Scheme (refer note 3 above) 50,000

Balance at the period end -

3.4 Shareholders holding more than 5% shares in the Company*

I. Equity Shares of Rs. 10 each

Central India General Agents Ltd.: 1,65,14,000 Shares; 18.84%

ICICI Bank Ltd. 87,63,381 Shares; 10.00%

Birla Holdings Ltd.: 72,50,000 Shares; 8.27%

iPro Capital Ltd.: 70,00,000 Shares; 7.99%

Sukriti Education Society: 48,09,881 Shares; 5.49%

II. 8% Non- Convertible Redeemable Preference Shares of Rs. 100 each

Central India General Agents Ltd.: 5,00,000 Shares; 100.00%

* reflects proportionate number of shares that have since been allotted on April 29, 2016 under the Scheme. Percentages have been rounded to the nearest second decimal place.

4. Reserves and Surplus (Rs.) As at 31.3.2016

Capital Reserve (Refer Note No. 1C)

Pursuant to Scheme of Amalgamation 2,47,99,675

Closing Balance 2,47,99,675

Surplus / (Deficit)

(Loss) after tax as per the Statement of Profit and Loss (9,86,02,101)

Closing Balance (9,86,02,101)

Security Premium Suspense (Refer Note No. 1C) 43,82,08,105

Reserve & Surplus (Total) 36,44,05,679

5. Long Term Borrowings (Rs.)

As at 31.3.2016

Non-current portion Current Maturities

Secured

Term Loans :

- Banks and Financial Institutions 4,75,206 1,94,590

Unsecured

Intercorporate Deposits 9,14,00,000 -

9,18,75,206 1,94,590

87

Note: Amount stated in “Current Maturities” are amounts disclosed under the head “Other Current

Liabilities” (Refer Note 9)

Loan from Housing Development Finance Corporation Limited total outstanding - Rs. Nil together with the right of recompense, if any, on account of settlement is secured by mortgage on specified immovable properties. Loans from bank for purchase of vehicles total outstanding – Rs. 6,69,795 are secured against the vehicles purchased out of those loans. The loans are repayable, in 37 equated monthly instalments, by April 2019. Unsecured Intercorporate Deposits of Rs. 9,14,00,000 are repayable after June, 2017.

6. Other Long Term Liabilities (Rs.)

As at 31.3.2016

Security Deposits from Dealers and Selling Representatives 2,25,75,500

7. Short Term Borrowings (Rs.)

As at 31.3.2016

Secured Loans from Banks 38,46,78,462

Unsecured Intercorporate Deposits 5,49,00,000

43,95,78,462

Secured loans are for working capital from consortium of banks, comprising of UCO Bank and State Bank of India, and are secured by first charge on inventories and book debts besides second charge on movable machinery and fixed assets at Jamnagar as well as on DIGJAM brand, all ranking pari passu, and pledge of part of the promoters’ shareholding in the Company.

8. Trade Payables (Rs.)

As at 31.3.2016

Acceptances 14,51,85,227

Others 21,41,88,821

35,93,74,048

There are no dues and no payment has been made to Micro and Small Enterprises, determined to the extent such parties have been identified on the basis of information available with the Company, as at March 31, 2016, which requires disclosure under the Micro, Small and Medium Enterprises Development Act, 2006. This has been relied upon by auditors.

9. Other Current Liabilities (Rs.)

As at 31.3.2016

Current maturities of long term loans 1,94,590

Interest Accrued and due on borrowings 28,65,107

Interest accrued but not due on borrowings 29,36,876

Advance from Customers 1,66,79,821

Statutory Liabilities 65,72,072

2,92,48,466

10. Short Term Provisions (Rs.)

As at 31.3.2016

Short Term Employees Benefits 1,77,16,775

Provision for Fringe benefit tax (refer note 15) 8,27,526

1,85,44,301

88

11. Fixed Assets (Rs.)

Gross Block Depreciation & Amortisation Net Block

As at June 17,

2015

Acquired pursuant to Scheme of

Amalgamation (Refer Note

No. 1C)

Additions Sale/ Adjustments

As at March 31,

2016

As at June 17,

2015

For the period

On Sale/ Adjustments

Up to March 31,

2016

As at March 31,

2016

11. a. Tangible Assets

Land - 1,49,86,18,134 - - 1,49,86,18,134 - - - - 1,49,86,18,134

Building - 13,45,84,000 - - 13,45,84,000 - 31,54,134 - 31,54,134 13,14,29,866

Plant & Equipment

- 16,37,23,000 - - 16,37,23,000 - 1,66,00,468 - 1,66,00,468 14,71,22,532

Furniture & Fixtures

- 10,90,244 50,437 - 11,40,681 - 1,08,875 - 1,08,875 10,31,806

Vehicles - 30,48,498 - 40,327 30,08,171 - 6,54,091 - 6,54,091 23,54,080

Office Equipment

- 19,64,832 5,98,437 3,118 25,60,151 - 7,53,247 - 7,53,247 18,06,904

-------------- -------------------- ------------------ ------------------- ------------------- --------------- ------------------ ------------------- ----------------- ------------------- - 180,30,28,708 6,48,874 43,445 1,80,36,34,137 - 2,12,70,815 - 2,12,70,815 1,78,23,63,322

-------------- -------------------- ------------------ ------------------- ------------------- --------------- ------------------ ------------------- ----------------- -------------------

11.b. Intangible Assets

Software - 19,12,355 - - 19,12,355 - 4,47,442 - 4,47,442 14,64,913

89

12. Long Term Loans and Advances (Rs.)

As at 31.3.2016

(Unsecured, considered good)

Security Deposits 22,15,800

Advances to Showrooms 14,82,314

Others 7,65,000

44,63,114

13. Inventories (Please refer Note 2.7 for accounting policy for valuation) (Rs.)

As at 31.3.2016

Raw Materials* 3,66,48,041

Work- in- progress 13,80,49,400

Finished Goods 11,47,03,560

Stock-in-trade 2,66,49,366

Stores and Spares 1,01,72,978

32,62,23,345

* Includes goods in transit Rs. 1,04,45,491

14. Trade Receivable (Rs.)

As at 31.3.2016 (Secured, considered good)

Outstanding for a period exceeding six months from the date they are due for payment

69,294

(Unsecured, considered good)

Outstanding for a period exceeding six months from the date they are due for payment (Net)*

11,56,775

Others 13,00,56,570

13,12,82,639

* excludes doubtful receivables - Rs. 3,50,02,778 fully provided for. 15. Cash and Cash Equivalents (Rs.)

As at 31.3.2016

Cash on hand 3,09,833

Balances with Banks

- Current Accounts 33,16,764

- Export Earners Foreign Currency Accounts 53,515

Total Cash & Cash Equivalents (As per AS-3 Cash Flow Statements) (A) 36,80,112

Other Balances with Banks

- Fixed Deposits in earmarked accounts

Balances held as Margin Money 1,23,10,103

- Fringe Benefit Tax Account 11,74,997

Total – Other Bank Balances (B) 1,34,85,100

Total Cash and Cash Equivalents (A+B) 1,71,65,212

16. Short Term Loans and Advances (Rs.)

As at 31.3.2016

(Unsecured, considered good)

Security Deposits 11,93,200

Balance with Government Authorities* 20,61,808

90

Advance Income Tax 24,71,863

Prepaid Expenses 35,02,749

Advances to Vendors 45,46,320

Advances to Showrooms 7,65,196

Interest Free Loan to Employees 1,95,000

Other Advances 35,19,632

1,82,55,768

* excludes doubtful, against which full provision made – Rs. 14,69,628.

17. Other Current Assets (Rs.)

As at 31.3.2016

Export Benefits Receivable 58,82,923

Interest Accrued but not due (on deposits with Bank) 3,98,865

62,81,788

18. Contingent Liabilities and Commitments (not provided for, net of deposits) (Rs.)

Contingent Liabilities As at 31.3.2016

Service Tax matters under appeal 1,31,22,490

(In the opinion of the Company, the possibility relating to net outflow on the above accounts are remote)

19. Revenue from Operations (Rs.)

Period ended 31.3.2016

Sale of Goods

- Cloth 91,56,96,945

- Others 1,35,64,776

Sub-total 92,92,61,721

Export Incentives and Claims 1,60,68,101

Other Operating Revenue 19,77,736

Revenue from Operations 94,73,07,558

20. Other Income (Rs.) Period ended

31.3.2016 Interest Income

47,43,321

Provisions/Liabilities no longer required written back 2,18,444

Gain on Foreign Exchange Fluctuation (Net) 10,95,554

Other Non-operating Income 7,55,735

68,13,054

21. Cost of Materials Consumed (Rs.) Period ended

31.3.2016

Inventories at the beginning of the period -

Add: Acquired pursuant to the Scheme of Amalgamation (Refer Note 1C) 6,41,27,569

Add: Purchases during the period 25,94,79,608

32,36,07,177 Less: Sales 45,19,917

31,90,87,260

91

Less: Inventories at the end of the period 3,66,48,041

Cost of Raw Materials consumed 28,24,39,219

Details of Material Consumed

Wool and Synthetic Fibers 25,69,35,266

Yarn (bought out) 1,87,64,147

Others 67,39,806 28,24,39,219 22. Purchase of Stock-in-Trade (Rs.) Period ended

31.3.2016

Cloth 13,06,45,551

Others 1,34,57,803

14,41,03,354

23. Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade (Rs.)

Period ended 31.3.2016

Inventories at the beginning of the year -

Acquired Pursuant to Scheme of Amalgamation (Refer Note No. 1C)

Finished Goods 10,99,63,407

Work-in-progress 18,73,95,550

Stock-in-trade 3,31,08,731

Sub-total (II) 33,04,67,688

Closing Stock:

Finished Goods 11,47,03,560

Work-in-progress 13,80,49,400

Stock-in-trade 2,66,49,366

Sub-total (III) 27,94,02,326

Net (Increase) / Decrease 5,10,65,362

24. Employees Benefits Expense (Rs.)

Period ended 31.3.2016

Salaries, Wages, Bonus, etc. 14,98,93,259

Contribution to Provident & other funds 1,86,39,480

Employees Welfare expenses 1,35,94,633

18,21,27,372

Defined benefits plans: The Company has defined benefit plans for gratuity to eligible employees, contributions for which are made to Life Insurance Corporation of India, who invests the funds as per the IRDA Regulations. The Company also provides compensated absences to the employees. The details of these defined benefit plans recognized in the financial statements are as under:

(Rs.)

Gratuity Compensated Absences

Period ended 31.3.2016

Period ended 31.3.2016

a. Reconciliation of opening and closing balances of the present value of defined benefit obligation

Obligation at the beginning of the period - -

92

Add: Pursuant to Scheme of amalgamation (Refer Note No. 12,37,98,294 1,83,83,001 Current Service Cost 40,19,047 26,02,305 Interest Cost 77,43,583 11,49,857 Actuarial (gain)/loss (18,49,956) (24,23,385) Benefits paid (75,52,013) (9,26,718)

Obligation at the end of the period 12,61,58,955 1,87,85,060

b. Reconciliation of opening and closing balances of fair

value of plan assets

Plan assets at the beginning of the period, at fair value - -

Add: Pursuant to Scheme of amalgamation (Refer Note No. 1C)

9,39,50,905 -

Expected Return on Plan Assets 58,76,629 -

Actuarial gain/(loss) (5,30,510) -

Contribution - -

Benefits paid (75,52,013) -

Plan assets at the end of the period at fair value 9,17,45,011 -

c. Net Liability recognised in Balance Sheet

Obligation at the end of the period 12,61,58,955 1,87,85,060

Less : Plan assets at the end of the period at fair value (9,17,45,011) -

Liability recognised in Balance Sheet as at the end of the period as under:

3,44,13,944 1,87,85,060

- Long Term Provision for Employees Benefits 2,11,98,001 1,42,84,228

- Short Term Provision for Employees Benefits 1,32,15,943 45,00,832

d. Components of employer expense for the period Gratuity Compensated Absences

Period ended 31.3.2016

Period ended 31.3.2016

Current service cost 40,19,047 26,02,305

Interest cost 77,43,583 11,49,857

Expected return on plan assets (58,76,629) -

Net Actuarial (gain)/loss (13,19,446) (24,23,385)

Net cost 45,66,555 13,28,777

e. Assumptions % %

%

Discount Rate (p.a.) 8.21 8.21

Expected Rate of Return on plan assets (p.a.) 8.21 -

Expected rate of increase in compensation levels (p.a.) 6.00 6.00

f. The contribution expected to be made by the Company during the next financial year has not been ascertained.

g. The Company makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme

contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 1,30,34,064 for Provident Fund contributions, Rs.10,38,859 for Superannuation Fund contributions and Rs. 34,06,935 for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

93

25. Finance Costs (Rs.)

Period ended 31.3.2016

Interest Expenses 7,65,90,197

Other Borrowing Costs 93,35,553

8,59,25,750

26. Other Expenses (Rs.)

Period ended 31.3.2016

Stores and Spares consumed 3,46,51,940

Power and Fuel 9,24,75,874

Processing Expenses 2,02,49,903

Repairs to Building 18,62,310

Repairs to Machinery 83,74,113

Repairs (Others) 9,48,171

Insurance 24,02,706

Directors Fees including Service Tax 12,82,821

Professional & Legal Fees and Expenses 1,14,54,178

Payment to Auditors * 10,61,289

Rates & Taxes 14,07,016

Rent ** 86,37,134

Traveling Expenses 87,48,166

Advertisement & Sales Promotion 4,21,44,210

Brokerage, Rebate, Discount & Commission 2,35,93,218

Bad Debts written off 25,204

Loss on Sale/Discard of Fixed Assets (Net) 5,295

Freight & other Selling Expenses 1,25,43,905

Miscellaneous Expenses 1,34,75,946

28,53,43,399

* Payment to Auditors (Rs.)

Period ended 31.3.2016

As Auditors 8,00,000

For Other Services (included in Professional & Legal fees and Expenses)* 6,26,660

Service Tax 1,15,500

Reimbursement of expenses 1,45,789

16,87,949

@ Includes amount paid to a firm in which some of the partners of the Statutory Auditors are partners : Rs 30,000. ** The Company is lessee under various operating leases, none of which is non-cancellable.

27. In view of uncertainty that sufficient future taxable income will be available against unabsorbed

depreciation and carried forward losses under tax laws, deferred tax asset has not been recognised. 28. As on March 31, 2016 Company’s current liabilities are over its current assets. The Company has taken

steps to strengthen its liquidity position by infusing long term funds by way of long term loans. The Company expects to earn operating profit and a positive cash flow during the current year from the operations.

94

29. Foreign Currency Transactions (Rs.)

Period ended 31.3.2016

i. Value of Imports on CIF Basis

Raw Materials 70,59,273

Store & Spare parts (incl. Components) 21,13,685

ii. Expenditure in Foreign Currency

Commission 59,36,863

Traveling expenses 13,40,655

Others 5,82,705

iii. Earnings in Foreign Exchange

Export (including Deemed) of goods (on FOB basis) 31,13,99,867

30. Foreign Exchange Exposure

i. There are no outstanding foreign exchange exposures hedged under forward contracts. ii. The foreign exchange exposures not covered under forward contracts

Receivables : EURO – 8,558 Rs. 6,45,477, USD – 200, Rs. 13,266 and GBP – 50, Rs. 4,780 Payables : EURO – 57,254, Rs. 43,20,991 USD – 90,490, Rs. 59,97,716

31. Value of Consumables Period ended 31.3.2016

Rs. %

Raw Material

Imported 3,03,51,712 10.75

Indigenous 25,20,87,507 89.25

28,24,39,219 100.00

Spares and Components

Imported 34,13,598 9.85

Indigenous 3,12,38,342 90.15

3,46,51,940 100.00

32. Segment Information (in terms of AS 17) As the Company operates in a single business segment “Textiles”, the primary segment information in terms of AS 17 is not required to be given. The information based on location of customers are as under

(Rs.)

Period ended 31.3.2016

Revenue Within India 64,54,24,592

Outside India (excluding Deemed Exports) 30,86,96,020 Total 95,41,20,612 Carrying amount of Assets

Within India 2,25,69,77,420 Outside India 3,05,22,681 Total 2,28,75,00,101 Additions to Fixed Assets

Within India (including pursuant to Scheme of Amalgamation Refer Note No. 1C) 1,80,55,89,937 Outside India ___________- Total 1,80,55,89,937

95

33. Related Party Disclosures (in terms of AS 18) i. Key Managerial Personnel: Sri C. Bhaskar (Managing Director & Chief Executive Officer) - Remuneration – Rs.25,14,600. The above remuneration is for the period from the close of business as on June 30, 2015 (Appointed Date) up to March 17, 2016 Rs. 23,82,684 as Managing Director of erstwhile Digjam Limited (Amalgamating Company) in accordance with the Special Resolution approved at the Extra-Ordinary General Meeting of the Amalgamating Company held on March 25, 2015 and Rs. 1,31,916 for the period from March 18, 2016 as per approval of the Board of Directors in accordance with Section II Part II of Schedule V of the Companies Act, 2013 subject to approval of the Members at the forthcoming Annual General Meeting as provided in Section 196(4) of the Companies Act, 2013. The remuneration exclude gratuity funded through LIC, and leave obligation for which contribution/provision are not separately identified. There was no other transaction with him during the aforesaid period. ii. Xpro India Ltd. (a company where common management may be deemed to exist) – transferred pursuant to Scheme of Amalgamation (Refer Note 1C) – Rs. 2,50,00,000, aggregate of Short Term Deposits taken from them from time to time – Rs. Nil; Deposits repaid from time to time – Rs. 2,50,00,000. Interest expense (gross) on above Deposits – Rs. 28,72,429 and Expenses reimbursed – Rs.7,39,784. Maximum outstanding balance (credit) during the period – Rs. 2,62,04,823. Outstanding balance as at March 31, 2016 – Rs. Nil.

34. Earnings Per Share (in terms of AS 20)

Period ended 31.3.2016

(Loss) / Profit after Tax Rs. (9,86,02,101)

(Loss) /Profit pertaining to equity shareholders Rs. (9,86,02,101)

Number of Equity Shares* Nos. 8,76,41,621

Nominal value per Equity Share Rs. 10

Basic & Diluted Earnings per share: Rs. (1.13)

*Note: For the purpose of calculating Earnings Per Share, the Equity Shares to be issued pursuant to the Scheme (Refer Note No. 1B) have been considered effective close of business as on June 30, 2015, being the Appointed Date under the Scheme and the Equity Shares on incorporation have been ignored since the same are cancelled there under.

35. The Company was incorporated on June 17, 2015 and hence, previous year’s figures are not given.

For and on behalf of the Board

Sidharth Birla Chairman

Jatin Jain Company Secretary

Satish Shah Vice President &

Chief Financial Officer

C. Bhaskar Managing Director &

Chief Executive Officer

96

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS

Except as described below, there are no material outstanding litigations, suits or criminal or civil prosecutions,

proceedings or tax liabilities against our Company (in the name of our Company and / or entities which were

acquired by our Company), our Directors and our Promoter and there are no defaults, non-payment or overdue

of statutory dues, institutional / bank dues and dues payable to holders of any debentures, bonds and fixed

deposits, other unclaimed liabilities against our Company or Directors or Promoter. Further, no disciplinary

action has been taken by SEBI or any stock exchanges against our Company, our Directors and our Promoter

and Group Companies.

Except as stated under there are no: � litigation or legal action pending or taken by any Ministry or Department of the Government or a statutory

authority against the Promoter of our Company during the last five years immediately preceding the date of the Information Memorandum and no direction has been issued by such Ministry or Department or statutory authority upon conclusion of such litigation or legal action.

� pending litigation involving our Company, Promoter, Directors or any other person, whose outcome could have material adverse effect on the position of our Company

� no pending proceedings initiated against our Company for economic offences � no defaults and non-payment of statutory dues etc. Consent order: Four Promoter Group entities of erstwhile Digjam Limited viz. Janardhan Trading Co. Limited, Birla Holdings Limited, Central India General Agents Limited and Sukriti Education Society, filed application for consent with Securities and Exchange Board of India on December 7, 2011 bearing No. 2483 of 2011 for condoning delay in disclosure about accrual of voting rights entirely and automatically by operation of provisions of Section 87(2) of the Companies Act, 1956 in respect of 14,94,000 - 8% Cumulative-Redeemable Preference Shares of face value ` 100/- each held by them on account of non-payment of dividend by erstwhile Digjam Limited as on the annual general meeting of the Company held on August 25, 2011. SEBI vide its Order dated December 31, 2013 accepted the revised consent terms offering to pay a sum of ` 13,27,500/- towards settlement charges by the said Promoter Group Companies to settle any anticipated proceedings for the delay, which amount was paid on November 28, 2013 and it was confirmed that enforcement action would not be initiated against the said companies for the said default. A. Outstanding litigation against erstwhile Digjam Limited which now stands transferred in the name of

Digjam Limited (formerly Digjam Textiles Limited)

1. Criminal Cases Against Company :

Court / Forum

Parties to Dispute Brief Facts of the Case Extent of Liability /

Claim (in Lac `̀̀̀)

Present Status

Chief Judicial Magistrate, Jamnagar

Himatsinh Jalamsinh & Others Vs. Sri S.C. Agrawal, Sri N. C. Trivedi & Sri M. R. Bhandari

Bonus was not received intentionally by three workers and three criminal complaints were lodged under Sec. 403, 406, 408, 418, 34, 114 of IPC

0.07 Pending for hearing

Chief Judicial Magistrate, Jamnagar

Apprentice Adviser Vs. Company & Sri ML Verma

Criminal complaint lodged against Company’s Manager by Apprenticeship Advisor under Apprentice Act, 1961 for recruitment of less apprentices against allotment of quota.

NA Pending for hearing

97

2. Civil Cases Against Company:

Court / Forum

Parties to Dispute

Brief Facts of the Case Extent of Liability / Claim (in

Lac `̀̀̀)

Present Status

Gujarat High Court

Walker Anjaria & Sons Pvt. Ltd

&Anr. Vs.

Government of Gujarat, Dy.

Secretary, Asst. Collector, the Company &

Central Bank of India

Against acquisition of the land measuring 29,654 sq. mtrs. at Jamnagar for the Company under the Land Acquisition Act, 1894 vide award dated April 17, 2002, one of the original owners of land measuring 19728 sq. mtrs had filed a petition before the Gujarat High Court challenging the acquisition. The Hon’ble High Court has ordered status quo to be maintained. Besides, three references against the compensation awarded for the acquisition of land are pending before the District Court, Jamnagar.

NA For Final Hearing Next date June 20,

2016

Jamnagar Court

Company Vs. Jamnagar Municipal

Corporation& Walker Anjaria&

Sons Pvt. Ltd

Out of the above mentioned land acquired for the Company, Jamnagar Municipal Corporation (JMC) acquired 10,410 sq. mtrs. for road. The Company has filed a petition against JMC in Jamnagar Court for enhanced compensation to which the original owner whose petition is pending before the Gujarat High Court has been allowed to be joined as a party.

416.40 Matter stayed

Jamnagar Court

Walker Anjaria & Sons Pvt. Ltd

Vs. Jamnagar Municipal

Corporation &Ors& Company

Party claiming to be the owner of the land acquired by the Jamnagar Municipal Corporation filed suit for compensation and also for seeking direction for recovery of amount paid to Company with interest.

518.80 Pending for hearing

3. Labour Cases :

Court / Forum Parties to Dispute Brief Facts of the Case Extent of Liability / Claim (in

Lac ₹)

Present Status

Labour Court, Jamnagar

Prabhatsinh Lakhubha Rathod V/s. Company

Worker challenged dismissal due to absenteeism

NA The next date of hearing is July 05, 2016

Labour Court, Jamnagar

Hamirsinh Balleysinh V/s. Company

Dispute related to overtime& Misconduct

NA The next date of hearing is June 15, 2016

Labour Court, Jamnagar

Babu Mavji Bokhani V/s. Company

Worker demanding wage for one day ` 240/- against one day suspension as a punishment

- The next date of hearing is June 03, 2016

Industrial Tribunal, Jamnagar

Company Vs. Parakramsinh J. Jadeja

Misconduct with other workers

NA Awaiting outcome of High Court Appeal of the Company

98

Court / Forum Parties to Dispute Brief Facts of the Case Extent of Liability / Claim (in

Lac ₹)

Present Status

against adverse Tribunal Order Next date of hearing is June 15, 2016

Industrial Tribunal, Jamnagar

D.W.Mill Kamdar Mandal V/s. Company

Interpretation of calculation of Bonus under Payment of Bonus Act, 1965

NA The next date of hearing is June 16, 2016

Industrial Tribunal, Jamnagar

Mukesh Ratilal Nanda Vs. Company

Workman demanding two days wage against two days suspension as punishment

- The next date of hearing is June 14, 2016

Employee's Insurance Court, Jamnagar

Company V/s. ESIC, Ahmedabad

Company has challenged demand for interest and damages

2.62 Matter stayed on furnishing Bank guarantee of 50%. Next date June 1, 2016

Gujarat High Court

Mohammed RafikYusufbhai V/s Company

Tribunal upheld dismissal of workman for absenteeism against which workman filed appeal

- Pending for hearing

Gujarat High Court

Company Vs. Parakramsinh J. Jadeja

Against Tribunal order holding the inquiry conducted by the Company as bad, Company filed appeal which has been admitted

- Pending for final hearing

Gujarat High Court

Kishor S. Jadav V/s. Company

Tribunal upheld dismissal of workman against which workman filed appeal

- The next date of hearing is June 09, 2016

Gujarat High Court

Devubha Prabhatsinh Vs. Company

Tribunal upheld dismissal of workman against which workman filed appeal

- Pending for hearing

4. Taxation Central Excise:

i. The Company had received two show cause notices for the period July 9, 2004 to December, 2008 demanding duty of ` 278.96 lacs (without cenvat credit) on polyester tops captively consumed besides interest and penalty. The Company has filed detailed replies thereto and the said notices are pending for adjudication.

ii. The Company had received further three show clause notices for the period January 1, 2009 to July 6, 2009 purporting to deny exemption benefit on goods in which duty paid yarn was utilised since the Company had claimed cenvat credit on polyester tops and demanding duty of ` 110.73 lacs along with interest and penalty. The Company has filed detailed replies thereto and the said notices are pending for adjudication.

Income Tax :

Court / Forum

Parties to Dispute

Brief Facts of the Case Extent of Liability /

Claim (in `̀̀̀)

Present Status

Gujarat High Court

Income Tax Department vs Company

Department filed reference against ITAT order in our favour in respect of Depreciation, Bonus, Finance Charges, Interest, etc in A.Y 1991-1992

356.81 Lacs Pending for final hearing

Gujarat High Income Tax Department filed reference against 11.91 Lacs Pending for final

99

Court / Forum

Parties to Dispute

Brief Facts of the Case Extent of Liability /

Claim (in `̀̀̀)

Present Status

Court Department vs Company

ITAT order in our favour in respect of Depreciation, Guest House Expenses, etc. in A.Y 1991-1992.

hearing

Gujarat High Court

Income Tax Department vs Company

Department filed reference against ITAT order in our favour in respect of Bonus, Lease Rent, Interest etc in A.Y 1992-1993.

515.82 Lacs Pending for final hearing

Gujarat High Court

Income Tax Department vs Company

Department filed reference against ITAT order in our favour in respect of Guest House Expenses etc. in A.Y 1992-1993.

3.99 Lacs Pending for final hearing

Gujarat High Court

Income Tax Department vs Company

Department filed reference against ITAT order in our favour in respect of Bonus, Interest etc in A.Y 1993-1994.

99.74 Lacs Pending for final hearing

Gujarat High Court

Income Tax Department vs Company

Department filed reference against ITAT order in our favour for Allowance of Repair Expenses, capitalised but claimed as revenue, Investment Allowance, etc. in A.Y 1993-1994.

54.80 Lacs Pending for final hearing

Gujarat High Court

Income Tax Department vs Company

Department filed reference against ITAT order in our favour in respect of Bonus, Interest, Losses on transaction with subsidiaries etc. in A.Y 1994-1995.

1,414.36 Lacs

Pending for final hearing

Gujarat High Court

Income Tax Department vs Company

Department filed reference against ITAT order in our favour in respect of Bonus, Finance charges, Interest, Royalty on Coal & Limestone etc. in A.Y 1995-1996.

2,293.02 Lacs

Pending for final hearing

Gujarat High Court

Income Tax Department vs Company

Department filed reference against ITAT order in our favour in respect of Allowance of Repair Expenses, capitalised but claimed as revenue, Finance charges, Interest, Investment Allowance, disallowance of sundry balances written off. in A.Y 1995-1996.

1,635.50 Lacs

Pending for final hearing

Gujarat High Court

Income Tax Department vs Company

Department filed reference against ITAT order in our favour in respect of Bonus, Interest, etc. in A.Y 1996-1997.

1,074.06 Lacs

Pending for final hearing

Gujarat High Court

Income Tax Department vs Company

Department filed reference against ITAT order in our favour in respect of Bonus, Interest, deduction of Revaluation reserve U/s 115JA in A.Y 1997-1998.

1,580.88 Lacs

Pending for final hearing

Gujarat High Court

Income Tax Department vs Company

Department filed reference against ITAT order in our favour for Allowing reduction of credit balances w/back for 115JA in A.Y 1997-1998.

139.55 Lacs Pending for final hearing

Gujarat High Court

Income Tax Department vs Company

Department filed reference against ITAT order in our favour in respect of Bonus, Interest, transfer from Revaluation reserve U/s 115JA in A.Y

775.44 Lacs Pending for final hearing

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Court / Forum

Parties to Dispute

Brief Facts of the Case Extent of Liability /

Claim (in `̀̀̀)

Present Status

1998-1999.

Pending before ITAT

Income Tax Department vs Company

Dept. filed appeal against CIT (Appeals) order for deletion of disallowance for interest on royalty and for deletion of extra ordinary items from book profit computation in A.Y 1998-1999.

462.28 Lacs Pending for hearing

5. Arbitration Matters

Court / Forum

Parties to Dispute

Brief Facts of the Case Extent of Liability /

Claim (in `̀̀̀)

Present Status

Sole Arbitrator

Company vs DLF Real Estate Developers Limited

An agreement dated April 15, 1995 for purchase of an office block admeasuring 24,210 sq. ft. at DLF Corporate Park, DLF City, Phase II, Gurgaon where despite payment of full agreed consideration of ` 573.64 lacs DLF had defaulted in handing over possession of the office block.

Property or alternatively 573.64 Lacs + Interest + mesne profits

The matter is under final hearing before the Ld. Arbitrator

Sole Arbitrator

DLF Real Estate Developers Limited vs Saurashtra Chemicals Limited & Company

Three purchase orders placed in 1994 upon DLF Industries Limited, predecessor in interest of DLF Universal Limited by one Saurashtra Chemicals Limited, (the erstwhile Chemicals Division of the Company) for supply of turbine generators. An amount of approx.

` 17 crores is claimed by DLF in the said arbitration proceeding as against Saurashtra Chemicals Limited and the Company under various heads which is denied by the Company since by then the said Division had demerged as a separate company under a Scheme of Arrangement sanctioned by the Hon’ble High Court of Gujarat.

17 Crores (approx.)

The matter is under final hearing before the Ld. Arbitrator

6. Miscellaneous matters:

a. The Company has received two show cause notices from Gujarat Pollution Control Board directing the

Company to increase the boiler chimney heights to 30 meters and also to improve the lignite storage area and modification in the Air Pollution Control Machine. The Company has submitted its replies and is taking follow up actions.

b. There are about three matters, two in the Hon’ble Delhi High Court and one before the Addl. Rent Controller, Delhi in relation to the Company’s occupation of flat no.12, 3-4 Rajesh Pilot Marg (previously known as South End Lane), New Delhi. Company is presently occupying the said flat in terms of the order passed in Company’s favour by the Hon’ble Supreme Court of India. Two suits, one by O. P. Khaitan (HUF) and the other by one Kranti Arora had been filed for recovery of said flat and for mesne profit of ` 85,000/- per month from May 1995. The said suits had been dismissed against which Regular First Appeals are pending before the Hon’ble Delhi High Court. The proceedings for fixation of standard rent have been concluded and the Standard Rent has been fixed at ` 650 per month but an Appeal has been filed by the said Kranti Arora there against and the same is pending. The assessment of annual rateable value for House Tax purposes is under re-determination by NMDC after the matter was remanded in Appeal.

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c. The Company had acquired land at Bangalore in settlement of its dues by way of an award and subsequently transferred same to a financial institution. There is pending litigation filed by members of the family of the original owner to which the Company is also a party.

d. Erstwhile Digjam Limited was granted financial assistance by certain Banks and Financial Institutions, subsequently assigned by them to Asset Reconstruction Company (India) Limited (“ARCIL”). Thereafter, a restructuring package was sanctioned by ARCIL and in accordance therewith, payment of balance dues was made by erstwhile Digjam Limited in full settlement and on receipt of no objection certificate from ARCIL, satisfaction for the charges registered with Registrar of Companies for the said financial assistance were filed. Long after the aforesaid settlement and release of securities, ARCIL claimed an amount of ` 13.45 crores with interest which was rejected by erstwhile Digjam Limited as the dues had already been settled as above. Recently it has come to the Company’s notice (details awaited) that ARCIL has instituted an application in Debt Recovery Tribunal, Mumbai for its dues and in view of the above, the Company will contest the same.

B. Outstanding Litigation By erstwhile Digjam Limited which now stands transferred in the name of Digjam Limited (formerly Digjam Textiles Limited)

1. Criminal Cases :

Court / Forum

Parties to Dispute Brief Facts of the Case Extent of Liability /

Claim (in `̀̀̀)

Present Status

Chief Judicial Magistrate, Jamnagar

Raghuvir Singh Vs. Gopalsingh Jodhsingh

Watchman Raghuvir Singh was assaulted by workman Gopalsingh

NA The next date of hearing is June 16,

2016

Chief Judicial Magistrate, Jamnagar

Shri Ashok Mishra V/s. Jaywantsinh Jadeja

Company official Ashok Mishra was assaulted by workman Jaywantsinh Jadeja

NA Pending for hearing

2. Civil Cases

Court / Forum

Parties to Dispute

Brief Facts of the Case Extent of Liability /

Claim (in `̀̀̀)

Present Status

Jamnagar Court

Company vs Savdas Chavda and Ramesh Chavda

Civil Suit had been filed by the Company against Savdas Chavda and Ramesh Chavda, Respondents for relief as Respondents were trespassing and constructing in Plot Nos. 7, 8 & 9 which is included in the Company’s property situated in Revenue Survey no. 151/3B in City Survey no. 139 in Jamnagar. Application for interim relief was decided against the Company and the Company is in appeal against the same.

NA Pending for hearing

3. Taxation:

Income Tax

Court / Forum

Parties to Dispute

Brief Facts of the Case Extent of Liability /

Claim (in `̀̀̀)

Present Status

Pending before ITAT

Company vs Income Tax Department

Various disallowances & claim of Company for treating demerger of OCM division as transfer of going concern in A.Y 2005-2006.

90.18 Lacs Pending for hearing

4. Arbitration :

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Court / Forum

Parties to Dispute

Brief Facts of the Case Extent of Liability /

Claim (in `̀̀̀)

Present Status

Arbitral Tribunal

Company Vs. Keshan Brothers & Co. Private Limited

Arbitration had been initiated by the Company against the erstwhile franchisee of its showroom at Kolkata for ` 42.48 lacs plus interest being the claim of the Company against the franchisee and the proceedings are pending.

42.48 Pending for hearing

C. Outstanding Litigation By / Against Directors of Digjam Limited (Formerly Digjam Textiles

Limited) Nil

D. Outstanding Litigation By / Against Promoter/Promoter Group of Digjam Limited (Formerly Digjam Textiles Limited)

Court / Forum

Parties to Dispute

Brief Facts of the Case Extent of Liability /

Claim (in `̀̀̀)

Present Status

Calcutta High Court

Income Tax Department vs Birla Eastern Limited

Income Tax Department has filed references before the Hon’ble Calcutta High Court for three Assessment Years on the issue of holding period for determining Cost Inflation Index benefits for capital gains.

439 Lacs Pending for hearing

MATERIAL DEVELOPMENT AFTER THE DATE OF LAST AUDITED FINANCIAL STATEMENTS AS ON MARCH 31, 2016 In the opinion of our Board, there have not arisen since the date of the last audited financial statements i.e. March 31, 2016, any circumstances that materially or adversely affect or are likely to affect our profitability taken as a whole or the value of our assets or our ability to pay our material liabilities within the next 12 months.

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GOVERNMENT AND OTHER APPROVALS

Our Company is engaged in the business of manufacturing suiting fabrics. As per the Scheme of Amalgamation, all the registration taken by erstwhile Digjam Limited stands transferred in the name of Digjam Limited. Our Company has all necessary registration required for carrying on its business operations.

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OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority of Listing The Hon’ble High Court of Gujarat vide its Order dated February 17, 2016 (certified copy received by the Company on March 11, 2016) has approved the Scheme of Amalgamation between Digjam Limited, Digjam Textiles Limited and their respective Creditors and Shareholders for transfer and vesting of undertaking of Digjam Limited into Digjam Textiles Limited under sections 391 to 394 of the Companies Act, 1956. For more details relating to the Scheme of Amalgamation please refer to the Section titled “Scheme of Amalgamation” of this Information Memorandum. In accordance with the said Scheme, the equity shares of our Company issued pursuant to the Scheme shall be listed and admitted to trading on the NSE and BSE. Such listing and admission for trading is not automatic and is subject to fulfillment by the Company of criteria of NSE and BSE and also subject to such other terms and conditions as may be prescribed by NSE and BSE at the time of application by our Company seeking listing. Our Company has received no objection from NSE and BSE in relation to listing of equity shares issued pursuant to the Scheme of Amalgamation vide their letters dated October 16, 2015 and October 19, 2015 respectively. The Company has received in-principle approval for listing of its Equity Shares on National Stock Exchange of India Limited (“NSE”) and BSE Limited (“BSE”) vide their letter no. NSE/LIST/76059 dated June 10, 2016 and DCS/AMAL/AC/IP/1102/2016-17 dated June 14, 2016 respectively. Further, the company has received relaxation under Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957 from Securities and Exchange Board of India (“SEBI”) vide their letter no. CFD/DIL-1/BNS/ AKD/18286/2016 dated June 28, 2016 for listing of the Equity Shares of Digjam Limited on stock exchanges. Prohibition by SEBI The Company, its promoter, its promoter group, its directors, other companies promoted by the promoter has not been prohibited from accessing the capital market under any order or direction passed by SEBI. Further, any of the directors of the Company are not associated with the securities market in any manner, and SEBI has not initiated any action against any entity, which whom the directors of the Company are associated. Eligibility Criteria There being no initial public offering or rights issue, the eligibility criteria in terms of Chapter III & IV of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended does not become applicable. Willful defaulters by Reserve Bank of India The Company, its promoter, its promoter group, the relatives (as per the Companies Act, 2013) of Promoter and other companies promoted by the Promoter are not identified as willful defaulters by Reserve Bank of India or other authorities. General Disclaimer from the Company The Company accepts no responsibility for statements made otherwise than in the Information Memorandum or in the advertisements to be published in terms of SEBI circular no. CIR/CFD/DIL/5/2013 dated February 4, 2013, as amended from time to time, if any, or any other material issued by or at the instance of the Company and that anyone placing reliance on any other source of information would be doing so at his own risk. All information shall be made available by our Company to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner. Jurisdiction Exclusive jurisdiction for the purpose of this Information Memorandum is with the competent courts / authorities in Gujarat, India. Disclaimer Clause - BSE As required, a copy of this Information Memorandum has been submitted to BSE. BSE has vide its letter dated October 19, 2015 granted its observations on the Scheme of Amalgamation under Clause 24(f) of Listing Agreement of the Listing Agreement and by virtue of that approval, the BSE’s name is included in this Information Memorandum as one of the Stock Exchanges on which the Company’s securities are proposed to be listed.

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Disclaimer Clause - NSE As required, a copy of this Information Memorandum has been submitted to NSE. NSE has vide its letter dated October 16, 2015 granted its observations on the Scheme of Amalgamation under Clause 24(f) of Listing Agreement of the Listing Agreement and by virtue of that approval, the NSE’s name is included in this Information Memorandum as one of the Stock Exchanges on which the Company’s securities are proposed to be listed. Filing Copy of this Information Memorandum has been filed with BSE and NSE.

Listing Application has been made to BSE and NSE for permission for listing and trading in and for an official quotation of the Equity Shares of the Company. The Company has nominated BSE as the Designated Stock Exchange for the aforesaid listing of shares. The Company shall ensure that all steps for the completion of necessary formalities for listing and commencement of trading at all the Stock Exchanges mentioned above within such period as approved by SEBI. Demat Credit The Company has executed tri-partite Agreements with CDSL and NSDL dated April 26, 2016 and April 22, 2016, respectively, for admitting its securities in demat form. The ISIN allotted to the Company’s Equity Shares is INE731U01010. Shares have been allotted to those shareholders who have provided necessary details to the Company and/or who were holding their shares in Digjam Limited in demat form as on the Record Date i.e. March 31, 2016. The demat shares have been credited to the demat accounts of the shareholders by CDSL and NSDL and was completed by May 12, 2016 and May 06, 2016 respectively. Dispatch of share certificates Pursuant to the Scheme, on April 29, 2016, our Company has issued and allotted its Shares to eligible shareholders of Digjam Limited on the Record Date and our Company has dispatched share certificates to those shareholders holding shares in Digjam Limited in physical form on May 16, 2016. Expert Opinions Save as stated elsewhere in this Information Memorandum, we have not obtained an expert opinions. Previous Public Issues The Company has not made any public issue since incorporation.

Commission and Brokerage on previous issues Since the Company has not issued shares to the public in the past, no sum has been paid or is payable as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of the Equity Shares since its inception.

Companies under the same management There are no companies under the same management within the meaning of Section 370(1B) of the erstwhile Companies Act, 1956 other than the ones disclosed elsewhere in the Information Memorandum.

Promise vis-à-vis Performance This is for the first time the Company is getting listed on the Stock Exchange. Outstanding Debenture or Bonds and Redeemable Preference Shares and Other Instruments Issued by the Company The Company has issued and allotted 5,00,000 8% Non-Convertible Redeemable Preference Shares of face value ` 100 each at par aggregating to ` 5,00,00,000 to the Promoter Group company as per the Scheme. The said Non-Convertible Redeemable Preference Shares are redeemable at par at the end of 10 (ten) years from March 27, 2015 with an option to the Company to redeem at any time earlier thereto. Except as above, there are no outstanding debentures or bonds or redeemable preference shares or other instruments issued by the Company.

Stock Market Data for Equity Shares of the Company Equity shares of the Company are not listed on any stock exchanges. The Company is seeking approval for listing of shares through this Information Memorandum.

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Disposal of Investor Grievances MCS Share Transfer Agent Limited is the Registrar and Transfer Agent of the Company to accept the documents/requests/complaints from the investors/shareholders of the Company. All documents are received at the inward department, where the same are classified based on the nature of the queries/actions to be taken and coded accordingly. The documents are then electronically captured before forwarding to the respective processing units. The documents are processed by professionally trained personnel. The Company/RTA has set up service standards for each of the various processes involved such as effecting the transfer/dematerialization of securities/change of address ranging from 3-15 days. Sri Jatin Jain, the Company Secretary and Compliance Officer of the Company is vested with responsibility of addressing the Investor Grievance in coordination with Registrar & Transfer Agents. Name and Contact Address of the Company Secretary and Compliance Officer: Sri Jatin Jain Digjam Limited (formerly Digjam Textiles Limited) Aerodrome Road, Jamnagar Gujarat - 361 006 Tel.: +91 288 2712 972 Fax: +91 288 2712 991 Email: cosec@digjam.co.in Change in auditors since incorporation There has been no change in the Auditors of our Company since its incorporation.

Capitalisation of reserves or profits Our Company has not capitalised reserves or profits since incorporation. Revaluation of assets Our Company has not revalued its assets since incorporation. However in terms Clause 10.1 of the Scheme of Amalgamation, the accounting for amalgamation shall be done as per “The Purchase Method” prescribed under the Accounting Standard 14 – “Accounting for Amalgamations” issued by the Institute of Chartered Accountants of India and notified by the Central Government. Further, the asset and liabilities of erstwhile Digjam Limited are transferred and vested with Digjam Limited pursuant to the Scheme at their respective fair values. The difference of net assets as recorded by the Company in terms of the Scheme and the amount credited to Share Capital and Securities Premium Account and cancellation of inter-company balances and investments is credited to the Capital Reserve Account of the Company.

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MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

The main provisions of the Articles of Association of our Company are given under:

1. The regulations contained in Table ‘F’ in Schedule I to the Companies Act, 2013 (“Table ‘F’”), as are applicable to a public company limited by shares, shall apply to the company so far as they are not inconsistent with any of the provisions contained in these regulations or modifications thereof and only to the extent that there is no specific provision in these regulations. In case of any conflict between the provisions of these articles and Table ‘F’, the provisions of these articles shall prevail.

Table “F” to apply save as varied

The following regulations viz. 20(a), 27, 48 and 76 of Table “F” in the said Schedule shall not apply to the Company.

Regulations not applicable

INTERPRETATION 2. In the interpretation of these Articles the following expressions shall have

the following meanings, unless repugnant to the subject or context :- Interpretation Clause

“The Company” or “this Company” means DIGJAM LIMITED

“The Act” means the Companies Act, 2013, in force for the time being. In the event of any Section of the Act to which specific reference is made in these presents being amended or altered by Statute or otherwise then such reference shall be deemed to be to the amended or altered Section accordingly.

“Articles” or “Company’s Regulations” or “these presents” means these Articles of Association of the Company or as altered from time to time.

“Board of Directors” or “Board” means the collective body of the directors of the Company.

“Beneficial Owner” shall have the meaning assigned thereto in Section 2 of the Depositories Act,1996;

“Common Seal” or “Seal”, if any, shall mean the Common Seal of the Company as may be approved by the Board of Directors from time to time.

“Directors” means the Directors for the time being of the Company or, as the case may be, the Directors assembled at a Board Meeting.

“Depositories Act” means the Depositories Act,1996 and shall include any statutory modification(s) or re-enactment thereof for the time being in force;

“Depository” shall mean a Depository as defined in Section 2 of the Depositories Act,1996;

“Debentureholder(s)” or “Securityholder(s)” means the duly registered holders from time to time of the debenture(s) or securities of the Company;

“Independent Director” shall mean a Director who fulfils the requirements of Section 149(6) of the Act and who is appointed as an independent director in accordance with the provisions of the Act;

“In writing” means written or printed or partly written and partly printed or lithographed, or type-written or other substitute for writing.

“Month” means English calendar month

“Shareholder(s)” or “Member(s)” means the duly registered holder(s) from time to time of the Share(s) of the Company and includes the subscriber(s) to the Memorandum of Association of the Company and also every person holding Equity Share(s) and/or Preference Share(s) of the Company as also one whose name is entered as the beneficial owner in the records of the Depository.

“Year” means the English calendar year and “Financial Year” shall have meaning assigned thereto by Section 2(41) of the Act.

“The Office” means the Registered Office for the time being of the Company.

“Persons” include corporations (and firms) as well as individuals.

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Words importing the masculine gender also include the feminine gender. Words importing the singular number include, where the context admits or requires, the plural number and vice versa.

Subject as aforesaid, any words or expressions defined in the Act shall, except where repugnant to the subject or context, bear the same meaning in these Articles. The marginal notes hereto shall not affect the construction of these Articles.

SHARE CAPITAL AND VARIATION OF RIGHTS 3. The Authorised Share Capital of the Company shall be such amount as may

be authorised from time to time and the Board shall have the power to divide the shares in the capital for the time being into equity share capital and preference share capital and to attach thereto respectively any preferential, qualified or special rights, privileges or conditions, in accordance with the provisions of the Act and these Articles.

Capital

4 Subject to the provisions of the Act and these Articles, the shares in the capital of the Company shall be under the control of the Directors who may issue, allot or otherwise dispose of the same or any of them to such persons, in such proportion and on such terms and conditions and either at a premium or at par and at such time as they may from time to time think fit.

Shares under control of Board

5 Subject to the provisions of the Act and these Articles, the Board may issue and allot shares in the capital of the Company on payment or part payment for any property or assets of any kind whatsoever sold or transferred, goods or machinery supplied or for services rendered to the Company in the conduct of its business and any shares which may be so allotted may be issued as fully paid-up or partly paid-up otherwise than for cash, and if so issued, shall be deemed to be fully paid-up or partly paid-up shares, as the case may be.

Directors may allot shares otherwise than for cash

6 The Company may issue the following kinds of shares in accordance with these Articles, the Act, the Rules and other applicable laws: i. Equity share capital: a. with voting rights; and / or b. with differential rights as to dividend, voting or otherwise in accordance with the Rules; and ii. Preference share capital

Kind of share capital

7 i. Every person whose name is entered as a member in the register of members shall be entitled to receive within two months after allotment or within one month after the application for the registration of transfer or transmission or within such other period as the conditions of issue shall be provided: a. one certificate for all his shares without payment of any charges; or b. several certificates, each for one or more of his shares, upon payment of such charges as may be fixed by the Board for each certificate after the first.

Issue of certificate

ii. Every certificate shall be under the seal, if any, and shall specify the shares to which it relates and the amount paid-up thereon.

iii. In respect of any share or shares held jointly by several persons, the company shall not be bound to issue more than one certificate, and delivery of a certificate for a share to one of several joint holders shall be sufficient delivery to all such holders.

One certificate for shares held jointly

8 i. If any share certificate be worn out, defaced, mutilated or torn or if there be no further space on the back for endorsement of transfer, then upon production and surrender thereof to the Company, a new certificate may be issued in lieu thereof, and if any certificate is lost or destroyed then upon proof thereof to the satisfaction of the Company and on execution of such indemnity as the Company deem adequate, a new certificate in lieu thereof shall be given. The Board may at its discretion fix fees payable for every certificate issued under this Article.

Issue of new share certificate in place of one defaced, lost or destroyed

ii. The provisions of the foregoing Articles relating to issue of certificates shall mutatis mutandis apply to issue of certificates for any other securities

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including debentures (except where the Act otherwise requires) of the Company. Provided that, notwithstanding what is stated above, the Directors shall comply with such rules or regulations or requirements of any stock exchange or the rules made under the Act or the rules made under the Securities Contracts (Regulation) Act, 1956 or any other Act or rules applicable in this behalf.

9. Except as required by law, no person shall be recognised by the Company as holding any share upon any trust, and the Company shall not be bound by, or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share, or any interest in any fractional part of a share, or (except only as by these regulations or by law otherwise provided) any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder.

Trust not recognised

10. i. The Company may exercise the powers of paying commissions or brokerage or underwriting fee conferred by the Act, to any person in connection with issue of the securities, provided that the rate per cent or the amount of the same paid or agreed to be paid shall be disclosed in the manner required by the Act and Rules made there under.

Power to pay commission in connection with securities Issued

ii. The rate or amount of the said payments shall not exceed the rate or amount prescribed in the Act and Rules made there under.

Rate of commission

iii. These payments may be satisfied in cash or by the allotment of fully or partly paid shares or partly in cash and partly in kind.

Mode of payment of commission

11. i. If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, subject to the provisions of the Act, and whether or not the Company is being wound up, be varied with the consent in writing of the holders of three-fourths of the issued shares of that class, or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class, as prescribed under the Act.

Variation of the members right

ii. To every such separate meeting, the provisions of these regulations relating to general meetings shall mutatis mutandis apply, but so that the necessary quorum shall be at least two persons holding at least one-third of the issued shares of the class in question.

Provisions as to general meetings to apply mutatis

mutandis to class meeting

12 The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

Issue of further shares not to affect rights of existing members

13 Subject to the provisions of the Act, the Board shall have the power to issue or re-issue preference shares of one or more classes which are liable to be redeemed, or converted to equity shares, on such terms and conditions and in such manner as determined by the Board in accordance with the Act.

Power to issue preference shares

14 i. The Company may, in accordance with the Act and the Rules, issue further shares to:

Further issue of share capital

a. persons who, at the date of offer, are holders of equity shares of the Company; such offer shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to him or any of them in favour of any other person; or

b. employees under any scheme of employees’ stock option, subject to approval by the shareholders of the Company by way of a special resolution; or

c. persons, whether or not those persons include the persons referred to in clause (a) or clause (b) above, subject to approval by the shareholders of the Company by way of a special resolution.

ii. A further issue of shares may be made in any manner whatsoever as the Board may determine including by way of preferential offer or private

Mode of further issue of Shares

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placement, subject to and in accordance with the Act and the Rules.

15 Subject to the provisions of the Act and other applicable provisions of law, the Company may with the approval of the shareholders by a special resolution in general meeting issue sweat equity shares in accordance with such rules and guidelines as applicable or issued by the competent authorities for the time being and further subject to such conditions as may be prescribed in that behalf.

Sweat equity shares

16 Any debentures, debenture-stock or other securities may be issued subject to the provisions of the Act and these Articles, at a discount, premium or otherwise and may be issued on the condition that they shall be convertible into shares of any denomination and with any special privileges and conditions as to redemption, surrender, drawing, allotment of shares, attending (but not voting) at the general meeting, appointment of directors and otherwise. Debentures with the right to conversion into or allotment of shares shall be issued only with the consent of the Company in the general meeting by way of a special resolution.

Terms of issue of debentures

LIEN 17 i. The Company shall have a first and paramount lien—

a. on every share (not being a fully paid share), for all monies (whether presently payable or not) called, or payable at a fixed time, in respect of that share; and b. on all shares (not being fully paid shares) standing registered in the name of a single person, for all monies presently payable by him or his estate to the Company: Provided that the Board of Directors may at any time declare any share to be wholly or in part exempt from the provisions of this clause. ii. The Company’s lien, if any, on a share shall extend to all dividends or interest, as the case may be, payable and bonuses declared from time to time in respect of such shares. iii. Unless otherwise agreed by the Board, the registration of a transfer of shares shall operate as a waiver of the Company’s lien.

Company’s lien on shares Waiver of lien in case of registration Lien to extend to dividends, etc.

18 The Company may sell, in such manner as the Board thinks fit, any shares on which the Company has a lien: Provided that no sale shall be made: a. unless a sum in respect of which the lien exists is presently payable; or b. until the expiration of fourteen days after a notice in writing stating and demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the share or the person entitled thereto by reason of his death or insolvency or otherwise.

As to enforcing lien by sale

19 i. To give effect to any such sale, the Board may authorise some person to transfer the shares sold to the purchaser thereof.

Validity of sale

ii. The purchaser shall be registered as the holder of the shares comprised in any such transfer.

Purchaser to be registered holder

iii. The purchaser shall not be bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.

Purchaser not affected

20 The receipt of the Company for the consideration (if any) given for the share on the sale thereof shall (subject, if necessary, to execution of an instrument of transfer or a transfer by relevant system, as the case may be) constitute a good title to the share and the purchaser shall be registered as the holder of the share.

Validity of Company’s receipt

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21 i. The proceeds of the sale shall be received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable.

Application of proceeds of sale

ii. The residue, if any, shall, subject to a like lien for sums not presently payable as existed upon the shares before the sale, be paid to the person entitled to the shares at the date of the sale.

Payment of residual money

22 In exercising its lien, the Company shall be entitled to treat the registered holder of any share as the absolute owner thereof and accordingly shall not (except as ordered by a court of competent jurisdiction or unless required by any statute) be bound to recognise any equitable or other claim to, or interest in, such share on the part of any other person, whether a creditor of the registered holder or otherwise. The Company’s lien shall prevail notwithstanding that it has received notice of any such claim.

Outsider’s lien not to effect Company’s lien

23 The provisions of these Articles relating to lien shall mutatis mutandis

apply to any other securities including debentures of the Company. Provisions as to lien to apply mutatis

mutandis to debentures, etc.

DEMATERIALIZATION OF SECURITIES 24 Every person subscribing to or holding securities of the Company shall

have the option to receive security certificates or to hold the securities in electronic form with a Depository as permitted under the law. If a person opts to hold his security with a Depository, the Company shall intimate such Depository the details of allotment of the security, and on receipt of the information, the Depository shall enter in its records the name of the allottee as the Beneficial Owner of the Security.

Option to hold shares in electronic or physical form

25 Save as herein otherwise provided, the Company shall be entitled to treat the person whose name appears as the beneficial owner of the shares, debentures and other securities in the records of the Depository as the absolute owner thereof as regards receipt of dividends or bonus on shares, interest/premium on debentures and other securities and repayment thereof or for service of notices and all or any other matters connected with the Company and accordingly the Company shall not (except as ordered by the Court of competent jurisdiction or as by law required and except as aforesaid) be bound to recognise any benami trust or equity or equitable, contingent or other claim to or interest in such shares, debentures or other securities as the case may be, on the part of any other person whether or not it shall have express or implied notice thereof.

Beneficial owner deemed as absolute owner

26 In the case of transfer of shares, debentures or other securities where the Company has not issued any certificates and where such shares, debentures or other securities are being held in an electronic and fungible form, the provisions of the Depositories Act, shall apply. Provided that in respect of the shares and securities held by the Depository on behalf of a beneficial owner, provisions of Section 9 of the Depositories Act shall apply so far as applicable.

Shares, debentures and other securities held in electronic form

27 Every Depository shall at such intervals and in such manner as may be specified in its bye-laws furnish to the Company, information about the transfer of securities in the name of the Beneficial Owners.

Information about transfer of Securities

28 Except as specifically provided in these Articles, the provisions relating to joint holders of shares, calls, lien on shares, forfeiture of shares and transfer and transmission of shares shall be applicable to shares held in electronic form so far as they apply to shares in physical form subject however to the provisions of the Depositories Act. Provided that, nothing contained in Article 39 shall apply to the transfer of shares, debentures or other marketable securities effected by the transferor and the transferee, both of whom are entered as beneficial owners in the record of the Depository

Provisions to apply to shares in electronic form

CALLS ON SHARES 29 i. The Board may, from time to time, make calls upon the members in Board may make

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respect of any monies unpaid on their shares (whether on account of the nominal value of the shares or by way of premium) and not by the conditions of allotment thereof made payable at fixed times.

calls

ii. Each member shall, subject to receiving at least fourteen days’ notice specifying the time or times and place of payment, pay to the Company, at the time or times and place so specified, the amount called on his shares.

Notice of call

iii. The Board may, from time to time, at its discretion, extend the time fixed for the payment of any call in respect of one or more members as the Board may deem appropriate in any circumstances.

Board may extend time for Payment of call

iv. A call may be revoked or postponed at the discretion of the Board. Revocation or postponement of call

30 A call shall be deemed to have been made at the time when the resolution of the Board authorising the call was passed and may be required to be paid by installments.

Call to take effect from date of resolution

31 The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.

Liability of joint holders of Shares

32 i. If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest thereon from the day appointed for payment thereof to the time of actual payment at such rate as the Board may determine.

When interest on call payable

ii. The Board shall be at liberty to waive payment of any such interest wholly or in part.

Board may waive interest

33 i. Any sum which by the terms of issue of a share becomes payable on allotment or at any fixed date, whether on account of the nominal value of the share or by way of premium, shall, for the purposes of these regulations, be deemed to be a call duly made and payable on the date on which by the terms of issue such sum becomes payable.

Sums deemed to be calls

ii. In case of non-payment of such sum, all the relevant provisions of these regulations as to payment of interest and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

Effect of non-payment of sum

34 The Board: i. may, if it thinks fit, receive from any member willing to advance the same, all or any part of the monies uncalled and unpaid upon any shares held by him; and

Payment in anticipation of calls may carry interest

ii. upon all or any of the monies so advanced, may (until the same would, but for such advance, become presently payable) pay interest at such rate not exceeding, unless the Company in general meeting shall otherwise direct, twelve per cent per annum, as may be agreed upon between the Board and the member paying the sum in advance. Nothing contained in this clause shall confer on the member (a) any right to participate in profits or dividends or (b) any voting rights in respect of the moneys so paid by him until the same would, but for such payment, become presently payable by him.

35 If by the conditions of allotment of any shares, the whole or part of the amount of issue price thereof shall be payable by instalments, then every such instalment shall, when due, be paid to the Company by the person who, for the time being and from time to time, is or shall be the registered holder of the share or the legal representative of a deceased registered holder.

Instalments on shares to be duly paid

36 All calls shall be made on a uniform basis on all shares falling under the same class. Explanation: Shares of the same nominal value on which different amounts have been paid-up shall not be deemed to fall under the same class.

Calls on shares of same class to be on uniform basis

37 Neither a judgment nor a decree in favour of the Company for calls or other moneys due in respect of any shares nor any part payment or satisfaction thereof nor the receipt by the Company of a portion of any money which shall from time to time be due from any member in respect of any share

Partial payment not to preclude forfeiture

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either by way of principal or interest nor any indulgence granted by the Company in respect of payment of any such money shall preclude the forfeiture of such shares as herein provided.

38 The provisions of these Articles relating to calls shall mutatis mutandis

apply to any other securities including debentures of the Company. Provisions as to calls to apply mutatis mutandis to debentures etc.

TRANSFER OF SHARES 39 i. The instrument of transfer of any share in the Company which is in

physical form shall be executed by or on behalf of both the transferor and transferee.

Instrument of transfer to be executed by transferor and transferee

ii. The transferor shall be deemed to remain a holder of the share until the name of the transferee is entered in the register of members in respect thereof.

40 The Company shall not register a transfer of shares in, or debentures of the Company held in physical form unless a proper instrument of transfer in the form prescribed under the Act duly stamped and executed in respect of only one class of shares/debentures by or on behalf of the transferor and by or on behalf of the transferee and specifying the name, address and occupation, if any, of the transferee has been delivered to the Company along with the certificates relating to the shares or debentures, or if no such certificate is in existence, along with the letter of allotment of the shares or debentures and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer:

Transfer not to be registered except on production of Instrument of transfer

Provided that where on an application in writing made to the Company by the transferee and bearing the stamp required for an instrument of transfer, it is proved to the satisfaction of the Board that the instrument of transfer signed by or on behalf of the transferor and by or on behalf of the transferee has been lost or where the instrument of transfer has not been delivered within the prescribed period, the Company may register the transfer on such terms as to indemnity as the Board may think fit:

Provided further that nothing in this Article shall prejudice any power of the Company to register as shareholder or debenture holder any person to whom the right to any shares in, or debentures of, the Company has been transmitted by operation of law.

41 In case of shares held in physical form, the Board may, subject to the right of appeal conferred by the Act decline to register any transfer of shares on which the Company has a lien.

Board may refuse to register Transfer

42 A transfer of the shares or other interest in the Company of a deceased member thereof made by his legal representatives shall, although the legal representative is not himself a member be as valid as if he had been a member at the time of the execution of the instrument of transfer.

Transfer by legal representative

43 Where the application is made by the transferor and relates to partly paid shares, the transfer shall not be registered, unless the Company gives notice of the application to the transferee and the transferee makes no objection to the transfer within two weeks from the date of receipt of the notice.

For the purpose of above clause notice to the transferee shall be deemed to have been duly given if it is dispatched by prepaid registered post to the transferee at the address given in the instrument of transfer, and shall be deemed to have been duly delivered upon the expiry of 7 days from the date of dispatch.

44 If the Company refuses to register the transfer of any share pursuant to these Articles, it shall within thirty days from the date on which the instrument of transfer was delivered to the Company send notice of refusal to the transferee and transferor.

Notice of refusal to be given to transferor and transferee

45 No transfer shall be made to a person of unsound mind. However, transfer of fully paid up shares can be made in the name of a minor if he is represented by his lawful guardian.

No transfer to person of unsound mind, etc.

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46 All instruments of transfer shall be retained by the Company, but any instrument of transfer which the Directors may decline to register shall be returned to the person depositing the same.

When instruments of transfers to be retained/returned

47 The Company shall incur no liability or responsibility whatever in consequence of its registering or giving effect to any transfer of shares, made or purporting to be made by any apparent legal owner thereof as shown or appearing in the Register of Members to the prejudice of persons having or claiming any equitable right, title or interest to or in the same shares, notwithstanding that the Company may have had notice of such equitable right, title or interest or notice prohibiting registration of such transfer and may have entered such notice, or referred thereto in any book of the Company, and the Company shall not be bound or required to regard to attend or give effect to any notice which may be given to it of any equitable right, title or interest, or be under any liability whatsoever for refusing or neglecting so to do, though it may have been entered or referred to in some book of the Company; but the Company shall nevertheless, be at liberty to regard and attend to any such notice, and give effect thereto if the Directors shall so think fit.

The Company not liable for disregard of a notice prohibiting registration of a transfer.

48 The Company may, after giving appropriate previous notice of not less than seven days, close the register of members or the register of debentureholders or other security holders for any period or periods not exceeding in the whole forty-five days in each year, but not exceeding thirty days at any one time.

Power to close Registers

49 The provisions of these Articles relating to transfer of shares shall mutatis

mutandis apply to any other securities including debentures of the Company.

Provisions as to transfer of shares to apply mutatis

mutandis to debentures, etc.

TRANSMISSION OF SHARES 50 i. On the death of a member, the survivor or survivors where the member

was a joint holder, and his nominee or nominees or legal representatives where he was a sole holder, shall be the only persons recognized by the company as having any title to his interest in the shares.

Title to shares on death of a member

ii. Nothing in clause (i) shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by him with other persons.

Estate of deceased member liable

51 i. Any person becoming entitled to a share in consequence of the death or insolvency of a member may, upon such evidence being produced as may from time to time properly be required by the Board and subject as hereinafter provided, elect, either— a. to be registered himself as holder of the share; or b. to make such transfer of the share as the deceased or insolvent member could have made.

Transmission Clause

ii. The Board shall, in either case, have the same right to decline or suspend registration as it would have had, if the deceased or insolvent member had transferred the share before his death or insolvency.

Board’s right unaffected

52 The Company shall be fully indemnified by such person from all liability, if any, for actions taken by the Board to give effect to such registration or transfer.

Indemnity to the Company

53 i. If the person so becoming entitled shall elect to be registered as holder of the share himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects.

Right to election of holder of share

ii. If the person aforesaid shall elect to transfer the share, he shall testify his election by executing a transfer of the share.

Manner of testifying election

iii. All the limitations, restrictions and provisions of these regulations relating to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as aforesaid as if the death or insolvency of the member had not occurred and the notice or transfer were a transfer signed by that member.

Limitations applicable to notice

54 A person becoming entitled to a share by reason of the death or insolvency Claimant to be

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of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company:

entitled to same advantage

Provided that the Board may, at any time, give notice requiring any such person to elect either to be registered himself or to transfer the share, and if the notice is not complied with within ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the share, until the requirements of the notice have been complied with.

55 The provisions of these Articles relating to transmission by operation of law shall mutatis mutandis apply to any other securities including debentures of the Company.

Provisions as to transmission to apply mutatis

mutandis to debentures, etc.

56 No fee shall be charged for registration of transfer, transmission, probate, succession certificate and letters of administration, certificate of death or marriage, power of attorney or similar other document.

No fee on transfer or transmission

FORFEITURE OF SHARES 57 If a member fails to pay any call, or instalment of a call or any money due

in respect of any share, on the day appointed for payment thereof, the Board may, at any time thereafter during such time as any part of the call or instalment remains unpaid or a judgement or decree in respect thereof remains unsatisfied in whole or in part, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued and all expenses that may have been incurred by the Company by reason of non-payment.

If call or instalment not paid notice must be given

58 The notice aforesaid shall: Form of notice

i. name a further day (not being earlier than the expiry of fourteen days from the date of service of the notice) on or before which the payment required by the notice is to be made; and

ii. state that, in the event of non-payment on or before the day so named, the shares in respect of which the call was made shall be liable to be forfeited.

59 If the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has been given may, at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the Board to that effect.

In default of payment, shares to be forfeited

60 When any share shall have been so forfeited, notice of the forfeiture shall be given to the defaulting member and an entry of the forfeiture with the date thereof, shall forthwith be made in the register of members but no forfeiture shall be invalidated by any omission or neglect or any failure to give such notice or make such entry as aforesaid.

Entry of forfeiture in register of members

61 The forfeiture of a share shall involve extinction at the time of forfeiture, of all interest in and all claims and demands against the Company, in respect of the share and all other rights incidental to the share.

Effect of forfeiture

62 i. A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the Board thinks fit.

ii. At any time before a sale or disposal as aforesaid, the Board may cancel the forfeiture on such terms as it thinks fit.

Forfeited shares may be sold, etc. Cancellation of forfeiture

63 i. A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but shall, notwithstanding the forfeiture, remain liable to pay to the Company all monies which, at the date of forfeiture, were presently payable by him to the Company in respect of the shares.

Member still liable to pay money owing at the time of forfeiture

ii. All such monies payable shall be paid together with interest thereon at such rate as the Board may determine, from the time of forfeiture until

Member still liable to pay money owing

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payment or realisation. The Board may, if it thinks fit, but without being under any obligation to do so, enforce the payment of the whole or any portion of the monies due, without any allowance for the value of the shares at the time of forfeiture or waive payment in whole or in part.

at time of forfeiture and interest

iii. The liability of such person shall cease if and when the Company shall have received payment in full of all such monies in respect of the shares.

Cessation of liability

64 i. A duly verified declaration in writing that the declarant is a director, the manager or the secretary, of the Company, and that a share in the Company has been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share;

Certificate of forfeiture

ii. The Company may receive the consideration, if any, given for the share on any sale or disposal thereof and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of;

Title of purchaser and transferee of forfeited shares

iii. The transferee shall thereupon be registered as the holder of the share; and

Transferee to be registered as holder

iv. The transferee shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share.

Transferee not affected

65 Upon any sale after forfeiture or for enforcing a lien in exercise of the powers hereinabove given, the Board may, if necessary, appoint some person to execute an instrument for transfer of the shares sold and cause the purchaser’s name to be entered in the register of members in respect of the shares sold and after his name has been entered in the register of members in respect of such shares the validity of the sale shall not be impeached by any person.

Validity of the sale

66 Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles, the certificate(s), if any, originally issued in respect of the relative shares shall (unless the same shall on demand by the Company has been previously surrendered to it by the defaulting member) stand cancelled and become null and void and be of no effect, and the Board shall be entitled to issue a duplicate certificate(s) in respect of the said shares to the person(s) entitled thereto.

Cancellation of share certificate in respect of forfeited shares

67 The Board may, subject to the provisions of the Act, accept a surrender of the share certificate for any forfeited share from or by any member desirous of surrendering them on such terms as they think fit.

Surrender of share certificates

68 The provisions of these regulations as to forfeiture shall apply in the case of nonpayment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the nominal value of the share or by way of premium, as if the same had been payable by virtue of a call duly made and notified.

Sums deemed to be calls

69 The provisions of these Articles relating to forfeiture of shares shall mutatis

mutandis apply to any other securities including debentures of the Company.

Provisions as to forfeiture of shares to apply mutatis

mutandis to debentures, etc.

ALTERATION OF CAPITAL 70 The Company may, from time to time, by ordinary resolution increase the

share capital by such sum, to be divided into shares of such amount, as may be specified in the resolution.

71 Subject to the provisions of the Act, the Company may, by ordinary resolution: i. consolidate and divide all or any of its share capital into shares of larger amount than its existing shares; ii. convert all or any of its fully paid-up shares into stock, and reconvert that stock into fully paid-up shares of any denomination;

Power to alter share capital

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iii. sub-divide its existing shares or any of them into shares of smaller amount than is fixed by the memorandum; iv. cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person.

72 Where shares are converted into stock— i. the holders of stock may transfer the same or any part thereof in the same manner as, and subject to the same regulations under which, the shares from which the stock arose might before the conversion have been transferred, or as near thereto as circumstances admit: Provided that the Board may, from time to time, fix the minimum amount of stock transferable, so, however, that such minimum shall not exceed the nominal amount of the shares from which the stock arose.

Shares may be converted into stock

ii. the holders of stock shall, according to the amount of stock held by them, have the same rights, privileges and advantages as regards dividends, voting at meetings of the Company, and other matters, as if they held the shares from which the stock arose; but no such privilege or advantage (except participation in the dividends and profits of the Company and in the assets on winding up) shall be conferred by an amount of stock which would not, if existing in shares, have conferred that privilege or advantage.

Right of stockholders

iii. such of these regulations of the Company as are applicable to paid-up shares shall apply to stock and the words “share” and “shareholder” in those regulations shall include “stock” and “stock-holder” respectively.

73 The Company may, by special resolution, reduce in any manner and with, and subject to, any incident authorised and consent required by law: i. its share capital; ii. any capital redemption reserve account; or iii. any securities premium account

Reduction of capital

JOINT HOLDERS 74 Where two or more persons are registered as joint holders (not more than

three) of any share, they shall be deemed (so far as the Company is concerned) to hold the same as joint tenants with benefits of survivorship, subject to the following and other provisions contained in these Articles:

Jointholders

i. The joint-holders of any share shall be liable severally as well as jointly for and in respect of all calls or instalments and other payments which ought to be made in respect of such share.

Liability of jointholders

ii. On the death of any one or more of such jointholders, the survivor or survivors shall be the only person or persons recognized by the Company as having any title to the share but the Directors may require such evidence of death as they may deem fit, and nothing herein contained shall be taken to release the estate of a deceased jointholder from any liability on shares held by him jointly with any other person.

Death of one or more joint holders

iii. Any one of such joint holders may give effectual receipts of any dividends, interests or other moneys payable in respect of such share.

Receipt from any one holder sufficient

iv. Only the person whose name stands first in the register of members as one of the joint-holders of any share shall be entitled to the delivery of certificate, if any, relating to such share or to receive notice (which term shall be deemed to include all relevant documents) and any notice served on or sent to such person shall be deemed service on all the jointholders.

Delivery of certificate and giving of notice to first namedholder

v. Any one of two or more joint-holders may vote at any meeting either personally or by attorney or by proxy in respect of such shares as if he were solely entitled thereto and if more than one of such jointholders be present at any meeting personally or by proxy or by attorney then that one of such persons so present whose name stands first or higher (as the case may be) on the register in respect of such shares shall alone be entitled to vote in respect thereof but the other or others of the joint-holders shall be entitled to vote in preference to a joint-holder present by attorney or by proxy although the name of such joint-holder present by any attorney or proxy

Vote of jointholders

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stands first or higher (as the case may be) in the register in respect of such shares

vi. Several executors or administrators of a deceased member in whose (deceased member) sole name any share stands, shall for the purpose of this clause be deemed joint-holders.

Executors or administrator asjoint holders

vii. The provisions of these Articles relating to joint holders of shares shall mutatis mutandis apply to any other securities including debentures of the Company registered in joint names.

Provisions as to joint holders as to shares to apply mutatis mutandis to debentures, etc.

CAPITALISATION OF PROFITS 75 i. The Company in general meeting may, upon the recommendation of the

Board, resolve— Capitalisation

a. that it is desirable to capitalise any part of the amount for the time being standing to the credit of any of the Company’s reserve accounts, or to the credit of the profit and loss account, or otherwise available for distribution; and

b. that such sum be accordingly set free for distribution in the manner specified in clause (ii) amongst the members who would have been entitled thereto, if distributed by way of dividend and in the same proportions.

ii. The sum aforesaid shall not be paid in cash but shall be applied, subject to the provision contained in clause (iii), either in or towards—

Sum how applied

a. paying up any amounts for the time being unpaid on any shares held by such members respectively; b. paying up in full, unissued shares of the Company to be allotted and distributed, credited as fully paid-up, to and amongst such members in the proportions aforesaid; c. partly in the way specified in sub-clause (a) and partly in that specified in sub-clause (b);

iii. A securities premium account and a capital redemption reserve account may, for the purposes of this regulation, be applied in the paying up of unissued shares to be issued to members of the Company as fully paid bonus shares;

iv. The Board shall give effect to the resolution passed by the Company in pursuance of this regulation.

76 i. Whenever such a resolution as aforesaid shall have been passed, the Board shall: a. make all appropriations and applications of the undivided profits resolved to be capitalised thereby, and all allotments and issues of fully paid shares if any; and b. generally to do all acts and things required to give effect thereto.

Powers of the Board for capitalisation

ii. The Board shall have power: a. to make such provisions, by the issue of fractional certificates or by payment in cash or otherwise as it thinks fit, for the case of shares becoming distributable in fractions ; and

Board’s power to issue fractional certificate/coupon etc.

b. to authorise any person to enter, on behalf of all the members entitled thereto, into an agreement with the Company providing for the allotment to them respectively, credited as fully paid-up, of any further shares to which they may be entitled upon such capitalisation, or as the case may require, for the payment by the Company on their behalf, by the application thereto of their respective proportions of profits resolved to be capitalised, of the amount or any part of the amounts remaining unpaid on their existing shares;

iii. Any agreement made under such authority shall be effective and binding on such members.

Agreement binding on members

BUY-BACK OF SHARES 77 Notwithstanding anything contained in these Articles but subject to the

provisions of the Act or any other law for the time being in force, the Buy-back of shares

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Company may purchase its own shares or other specified securities.

GENERAL MEETINGS 78 All general meetings other than annual general meeting shall be called

Extraordinary General Meeting. Extraordinary General Meeting

79 i. The Board may, whenever it thinks fit, call an Extraordinary General Meeting. ii. If at any time directors capable of acting who are sufficient in number to form a quorum are not within India, any director of the Company may call an Extraordinary General Meeting in the same manner, as nearly as possible, as that in which such a meeting may be called by the Board.

Powers of Board to call Extraordinary General Meeting

PROCEEDINGS AT GENERAL MEETINGS 80 i. No business shall be transacted at any general meeting unless a quorum

of members is present at the time when the meeting proceeds to business. ii. Save as otherwise provided herein, the quorum for the general meetings shall be as provided in the Act.

Presence of Quorum Quorum for general meeting

81 The Chairman, if any, of the Board shall preside as Chairman at every general meeting of the Company.

82 No business shall be discussed or transacted at any general meeting whilst the chair is vacant, except election of Chairman.

Business confined to election of Chairman whilst chair vacant

83 If there is no such Chairman, or if he is not present within fifteen minutes after the time appointed for holding the meeting, or is unwilling to act as Chairman of the meeting, the directors present shall elect one of their numbers to be Chairman of the meeting.

Chairman of the meeting

84 If at any meeting no director is willing to act as Chairman or if no director is present within fifteen minutes after the time appointed for holding the meeting, the members present shall choose one of their number to be Chairman of the meeting.

Members to elect Chairman

85 The Chairman of any meeting shall be the sole judge of the validity of every vote tendered at such meeting.

Power of Chairman

86 On any business at any general meeting, in case of an equality of votes, whether on a show of hands or electronically or on a poll, the Chairman shall have a second or casting vote.

Casting vote of Chairman at general meeting

87 i. The Company shall cause minutes of the proceedings of every general meeting of any class of members or creditors and every resolution passed by postal ballot to be prepared and signed in such manner as may be prescribed by the Rules and making entries thereof within thirty days of the conclusion of every such meeting or passing of resolution by postal ballot in books kept for that purpose with their pages consecutively numbered.

Minutes of proceedings of meetings and resolutions passed by postal ballot

ii. There shall not be included in the minutes any matter which, in the opinion of the Chairman of the meeting: a. is, or could reasonably be regarded, as defamatory of any person; or b. is irrelevant or immaterial to the proceedings; or c. is detrimental to the interests of the Company.

Certain matters not to be included in the minutes books

iii. The Chairman shall exercise an absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the grounds specified in the aforesaid clause.

Discretion of the Chairman in relation to Minutes

iv. The minutes of the meeting kept in accordance with the provisions of the Act shall be evidence of the proceedings recorded therein.

Minutes to be evidence

88 i. The books containing the minutes of the proceedings of any general meeting of the Company or a resolution passed by postal ballot shall:

Inspection of minute books of general meeting

a. be kept at the registered office of the Company; and

b. be open to inspection of any member without charge, during 11.00 a.m. to 1.00 p.m. on all working days.

ii. Any member shall be entitled to be furnished, within the time prescribed by the Act, after he has made a request in writing in that behalf to the

Members may obtain copy of the

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Company and on payment of such fees, if any, as may be fixed by the Board, with a copy of any minutes referred to in clause (i) above.

minutes

ADJOURNMENT OF MEETING 89 i. The Chairman may, suo moto, adjourn the meeting from time to time and

from place to place. Chairman may adjourn the Meeting

ii. No business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

Business at adjourned Meeting

iii. When a meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case of an original meeting.

Notice of adjourned meeting

iv. Save as aforesaid, and as provided in the Act, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.

Notice of adjourned meeting not required

VOTING RIGHTS 90 Subject to any rights or restrictions for the time being attached to any class

or classes of shares,— Entitlement to vote on show of hands and on poll

i. on a show of hands, every member present in person shall have one vote; and

ii. on a poll, the voting rights of members shall be in proportion to his share in the paid-up equity share capital of the Company.

91 Where a poll is to be taken, the Chairman of the meeting shall appoint such numbers of persons, as he deems necessary to scrutinise the poll process and votes given on the poll and to report thereon to him;

Scrutineers at poll

92 The Chairman shall have power, at any time before the result of the poll is declared to remove a scrutineer from office and to fill vacancies in the office of scrutineer arising from such removal or from any other cause;

93 A member may exercise his vote at a meeting by electronic means in accordance with the Act and shall vote only once.

Voting through electronic means

94 i. In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders.

Vote of jointholders

ii. For this purpose, seniority shall be determined by the order in which the names stand in the register of members.

Seniority of names

95 A member of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee or other legal guardian, and any such committee or guardian may, on a poll, vote by proxy. If any member be a minor, the vote in respect of his share or shares shall be by his guardian or any one of his guardians.

How members non

compos mentis and minor may vote

96 Subject to the provisions of the Act and other provisions of these Articles, any person entitled under the Transmission Clause to any shares may vote at any general meeting in respect thereof as if he was the registered holder of such shares, provided that at least 48 (forty eight) hours before the time of holding the meeting or adjourned meeting, as the case may be, at which he proposes to vote, he shall duly satisfy the Board of his right to such shares unless the Board shall have previously admitted his right to vote at such meeting in respect thereof.

Votes in respect of shares of deceased or insolvent members, etc.

97 Any business other than that upon which a poll has been demanded may be proceeded with, pending the taking of the poll.

Business may proceed pending poll

98 No member shall be entitled to vote at any general meeting unless all calls or other sums presently payable by him in respect of shares in the Company have been paid or in regard to which the Company has exercised any right of lien.

Restriction on voting rights

99 Unless voting has been exercised in any mode in respect of the shares held by a Member, the said member is not prohibited from exercising his voting

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121

on the ground that he has not held his share or other interest in the Company for any specified period preceding the date on which the vote is taken, or on any other ground not being a ground set out in the preceding Article.

rights in other cases to be void

100 i. No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered, and every vote not disallowed at such meeting shall be valid for all purposes.

Validity of the Vote

ii. Any such objection made in due time shall be referred to the Chairman of the meeting, whose decision shall be final and conclusive.

101 Any member shall enjoy the same rights and be subject to the same liabilities as all other members of the same class.

Equal rights of members

PROXY 102 Any member entitled to attend and vote at a general meeting may do so

either personally or through his constituted attorney or through another person as a proxy on his behalf, for that meeting.

Member may vote in person or otherwise

103 The instrument appointing a proxy and the power-of-attorney or other authority, if any, under which it is signed or a notarised copy of that power or authority, shall be deposited at the registered office of the Company not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote and in default the instrument of proxy shall not be treated as valid.

Proxies when to be deposited

104 An instrument appointing a proxy shall be in the form as prescribed in the rules made under the Act.

Form of proxy

105 A vote given in accordance with the terms of an instrument of proxy shall be valid, notwithstanding the previous death or insanity of the principal or the revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the shares in respect of which the proxy is given:

Proxies to be valid not withstanding death etc. of the principal

Provided that no intimation in writing of such death, insanity, revocation or transfer shall have been received by the Company at its office before the commencement of the meeting or adjourned meeting at which the proxy is used.

BOARD OF DIRECTORS 106 Unless otherwise determined by the Company in general meeting, the

number of directors shall not be less than 3 (three) and shall not be more than 15 (fifteen).

Board of Directors

107 The following shall be the first Directors of the Company: 1. Sri Sethumadhava Rao Ragothaman 2. Sri Chandrasekharan Bhaskar 3. Sri Satish Shah

First Directors

108

The appointment, re-appointment, continuation or retirement including by rotation of Directors shall be in accordance with the provisions of the law.

Appointment/Retirement of Directors

109 The same individual may, at the same time, be appointed as the Chairman of the Company as well as the Managing Director or Chief Executive Officer of the Company,

Same individual may be Chairman and Managing Director/Chief Executive Officer

110 The remuneration of the directors shall, in so far as it consists of a monthly payment, be deemed to accrue from day-to-day.

Remuneration of directors

111 i. The remuneration payable to the directors, including any managing or whole-time director or manager, if any, shall be determined in accordance with and subject to the provisions of the Act.

Remuneration payable as per Act

ii. In addition to the remuneration payable to them in pursuance of the Act, the directors may be paid all travelling, hotel and other expenses properly incurred by them in attending and returning from meetings of the Board of Directors or any committee thereof or general meetings of the Company; or in connection with the business of the Company

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112 The fees payable to the Director for attending the meeting of the Board or Committee thereof shall be decided by the Board of Directors from time to time within the maximum limits of such fees that may be prescribed under the Act or the Rules.

Sitting Fees

113 i. Subject to the provisions of the Act, the Board shall have power at any time, and from time to time, to appoint a person as an additional director, provided the number of the directors and additional directors together shall not at any time exceed the maximum strength fixed for the Board by the Articles.

Appointment of Additional Director

ii. Such person shall hold office only up to the date of the next annual general meeting of the Company but shall be eligible for appointment by the Company as a director at that meeting subject to the provisions of the Act.

Duration of the office of the additional director

114 The Board may appoint an alternate director to act for a director (hereinafter in this Article called “the Original Director”) during his absence for a period of not less than three months from India. No person shall be appointed as an alternate director for an independent director unless he is qualified to be appointed as an independent director under the provisions of the Act.

Appointment of Alternate Director

115 An alternate director shall not hold office for a period longer than that permissible to the Original Director in whose place he has been appointed and shall vacate the office if and when the Original Director returns to India.

Duration of office of alternate director

116 If the term of office of the Original Director is determined before he returns to India the automatic reappointment of retiring director in default of another appointment shall apply to the Original Director and not to the alternate director.

Re-appointment provisions applicable to Original Director

117 i. If the office of any director appointed by the Company in general meeting is vacated before his term of office expires in the normal course, the resulting casual vacancy may be filled by the Board of Directors at a meeting of the Board.

Appointment of director to fill casual vacancy

ii. The Director so appointed shall hold office only upto the date upto which the director in whose place he is appointed would have held office if it had not been vacated.

Duration of office of Director appointed to fill casual vacancy

118 Notwithstanding anything to the contrary contained in these Articles, so long as any moneys remaining owing by the Company to Public Financial Institutions as defined in Section 2(72) of the Companies Act, 2013 and any amendments/re-enactment thereof or to securitization company or the reconstruction company, which has obtained a certificate of registration from Reserve Bank of India under sub-section (4) of Section 3 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, or to any other Finance Corporation or Credit Corporation or to any other financing Company or Board or any Bank out of any loans granted by them to the company or so long as Public Financial Institutions or securitization company or reconstruction company or any other financing Corporation or Credit Corporation or any other Financing Company or Board or any Bank (each of which Public Financial Institutions or any securitization company or any reconstruction company or any other Finance Corporation or Credit Corporation or any other Financing Company or Board or any Bank is hereinafter in this Article referred to as “the Corporation”) continue to hold debentures in the Company by direct subscription or private placement, or so long as the Corporation holds shares in the Company as a result of underwriting or direct subscription or so long as any liability of the Company arising out of guarantee furnished by the Corporation on behalf of the Company remains outstanding, the Corporation shall have a right to appoint from time to time any person or persons as a Director or Directors, wholetime or non wholetime, (which Director or Directors is/are hereinafter referred to as “Nominee Director/s”) on the Board of the Company and to remove from

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such office any person or persons so appointed and to appoint any person or persons in his or their place/s. The Board of Directors of the Company shall have no power to remove from office the Nominee Director/s. At the option of the Corporation such Nominee Director/s shall not be required to hold any share qualification in the Company. Also at the option of the Corporation, such Nominee Director/s shall not be liable to retirement by rotation of directors. Subject as aforesaid, Nominee Director/s shall be entitled to the same right and privileges and be subject to the same obligations as any other Director of the Company. The Nominee Director/s so appointed shall hold the said office only so long as moneys remain owing by the Company to the Corporation or so long as the Corporation holds debentures in the Company as a result of direct subscription or private placement or so long as the Corporation holds shares in the Company as a result of underwriting or direct subscription or the liability of the Company arising out of any guarantee is outstanding and the Nominee Director/s so appointed in exercise of the said power shall ipso facto vacate such office immediately the moneys owing by the Company to the Corporation is paid off or on the Corporation ceasing to hold debentures/shares in the Company or on the satisfaction of the liability of the Company arising out of any guarantee furnished by the Corporation. The Nominee Director/s appointed under this Article shall be entitled to receive all notices of and attend all General Meetings, Board Meetings and Meetings of the Committee of which the Nominee director/s is/are member/s as also the minutes of such meetings. The Corporation shall also be entitled to receive all such notices and minutes. The Company shall pay to the Nominee Director/s sitting fees and expenses which the other Directors of the Company are entitled, but if any other fees, commission, moneys or remuneration in any form is payable to the Directors of the Company, the fees, commission, moneys and remuneration in relation to such Nominee Director/s shall accrue to the Corporation and same shall accordingly be paid by the Company directly to the Corporation. Any expenses that may be incurred by the Corporation or such Nominee Directors in connection with their appointment or Directorship shall also be paid or reimbursed by the Company to the Corporation or as the case may be to such Nominee Director/s. Provided that if any such Nominee Director/s is an officer of the Corporation the sitting fees, in relation to such Nominee Director/s shall also accrue to the Corporation and the same shall accordingly be paid by the Company directly to the Corporation. Provided also that in the event of the Nominee Director/s being appointed as whole-time director/s such Nominee Director/s shall exercise such powers and duties as may be approved by the Lenders and have such rights as are usually exercised or available to whole-time Directors, in the management of the affairs of the Borrower. Such Nominee Director/s shall be entitled to receive such remuneration, fees, commission and moneys as may be approved by the Lenders.

119 If it is provided by the Trust Deed securing or otherwise in connection with any issue of Debentures of the Company, that any person or persons shall have the power to nominate Director(s) of the Company, then in the case of any and every issue of Debentures, the person or persons having such power may exercise such power from time to time to appoint Director(s) in accordance with the terms agreed with the Company. Any Director so appointed is herein referred to as Debenture Director. A Debenture Director may be removed from office at any time by the person or persons in whom for the time being is vested the power under which he was appointed and another Director may be appointed in his place and casual vacancy in that office, caused for whatever reason may also be filled.

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POWERS OF BOARD 120

The management of the business of the Company shall be vested in the Board and the Board may exercise all such powers, and do all such acts and things, as the Company is by the Memorandum of Association or otherwise authorized to exercise and do, and, not hereby or by the statute or otherwise directed or required to be exercised or done by the Company in general meeting but subject nevertheless to the provisions of the Act and other laws and of the Memorandum of Association and these Articles and to any regulations, not being inconsistent with the Memorandum of Association and these Articles or the Act, from time to time made by the Company in general meeting provided that no such regulation shall invalidate any prior act of the Board which would have been valid if such regulation had not been made.

General powers of the Company vested in Board

121 All cheques, promissory notes, drafts, hundis, bills of exchange and other negotiable instruments, and all receipts for monies paid to the Company, shall be signed, drawn, accepted, endorsed, or otherwise executed, as the case may be, by such person and in such manner as the Board shall from time to time by resolution determine.

Execution of negotiable Instruments, etc.

BORROWING POWERS 122

The Directors may, from time to time, at their discretion, raise or borrow, or secure the payment of, any sum or sums of money for the purposes of the Company; Provided that the moneys to be borrowed together with the moneys already borrowed by the Company (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) shall not at any time except with the consent of the Company by way of special resolution in general meeting exceed the aggregate of the paid-up capital of the Company and its free reserves, that is to say, reserves not set apart for any specific purpose.

Power to borrow

123 The Directors, with shareholders’ consent where required by the Act and Rules, may raise or secure the payment or repayment of such sum or sums in such manner and upon such terms and conditions in all respects as they think fit and, in particular, by the issue of securities including debentures or debenture stock of the Company charged upon all or any part of the property of the Company (both present and future) including its uncalled capital for the time being.

Conditions on which money may be borrowed

PROCEEDINGS OF THE BOARD 124 i. The Board of Directors may meet for the conduct of business, adjourn

and otherwise regulate its meetings, as it thinks fit. When meeting to be convened

ii. The Chairman or any one Director with the previous consent of the Chairman may, or the company secretary on the direction of the Chairman shall, at any time summon a meeting of the Board.

Who may summon Board meeting

125 The quorum for a Board meeting shall be as provided in the Act. Quorum for Board meetings

126 If a meeting of the Board cannot be held for want of quorum, then the meeting shall stand adjourned to such day, time and place as the Director or Directors present at the meeting may fix.

Adjournment of meeting for want of quorum

127 Subject to the provisions of the Act, question arising at any meeting shall be decided by a majority of votes, each Director having one vote, and in case of an equality of votes the Chairman shall have a second or casting vote.

Voting at Board Meeting

128 The Board may from time to time appoint one of their body as Chairman and determine the period for which he is to hold such office. The position, duties and responsibilities of the Chairman (whether whole-time or not and notwithstanding the fact that his appointment may be in the designation of a whole-time Director under the Act) & the Chief Executive Officer (by whatever designation described) shall be accordingly defined by the Board. The Board may authorize maintenance of a Chairman’s Office at

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Company’s expense to support him in the performance of his duties. Subject to the provisions of the Act, these Articles and of any Contract between him and the Company the remuneration of the Chairman (notwithstanding the fact that his appointment may be in the designation of a whole-time Director under the Act) may from time to time be fixed by the Directors, subject to the approval of the Company in General Meeting, and may be by way of fixed monthly payments, commission on profits of the Company; any or all of these modes or any other mode not expressly prohibited in the Act. If the Chairman has notified to the Company of his inability to be present at a Board meeting or if at any meeting the Chairman is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as Chairman or if no such Chairman has been appointed, the Directors present may choose one of their body to act as the Chairman of the meeting.

129 The Board may from time to time appoint one amongst its members to be the Vice Chairman who shall perform the duties of Chairman in absence of Chairman.

Vice Chairman

130 The continuing directors may act notwithstanding any vacancy in the Board; but, if and so long as their number is reduced below the quorum fixed by the Act for a meeting of the Board, the continuing directors or director may act for the purpose of increasing the number of directors to that fixed for the quorum, or of summoning a general meeting of the Company, but for no other purpose.

Directors not to act when number falls below minimum

131 i. The Board may, subject to the provisions of the Act, delegate any of its powers to committees consisting of such member or members of its body as it thinks fit.

Delegation of powers

ii. Any committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on it by the Board.

Committee to conform to Board regulations

132 i. A Committee may elect a Chairman of its meetings unless the Board while constituting the Committee has appointed one.

Chairman of Committee

ii. If no such Chairman is elected, or if at any meeting the Chairman is not present within five minutes after the time appointed for holding the meeting, the members present may choose one of their number to be Chairman of the meeting.

Who to preside at meetings of Committee

133 i. A Committee may meet and adjourn as it thinks fit. Committee to meet

ii. Questions arising at any meeting of a Committee shall be determined by a majority of votes of the members present, and in case of an equality of votes, the Chairman shall have a second or casting vote.

Questions at Committee meeting how decided

134 All acts done in any meeting of the Board or of a Committee thereof or by any person acting as a director, shall, notwithstanding that it may be afterwards discovered that there was some defect in the appointment of any one or more of such directors or of any person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such director or such person had been duly appointed and was qualified to be a director.

Acts of Board or Committee valid notwithstanding defect in appointment

135 Save as otherwise expressly provided in the Act, a resolution in writing, signed by all the members of the Board or of a Committee thereof, for the time being entitled to receive notice of a meeting of the Board or Committee, shall be valid and effective as if it had been passed at a meeting of the Board or Committee, duly convened and held.

Passing of resolution by Circulation

Chief Executive Officer, Manager, Company Secretary, Whole Time Director & Chief Financial Officer

136 Subject to the provisions of the Act,—

i. A Chief Executive Officer, Manager, Company Secretary, Whole Time Director or Chief Financial Officer may be appointed by the Board for such term, at such remuneration and upon such conditions as it may think fit; and any Chief Executive Officer, Manager, Company Secretary, Whole

Chief Executive Officer, etc

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Time Director or Chief Financial Officer so appointed may be removed by means of a resolution of the Board;

ii. A director may be appointed as Chief Executive Officer, Manager, Company Secretary or Chief Financial Officer.

Director may be Chief Executive Officer, etc.

MANAGING DIRECTOR 137 i. The Directors may from time to time appoint one or more of their body to

be the Managing Director(s) of the Company, in accordance with the provisions of the Act and the Rules. ii. A Managing Director so appointed shall be entrusted with substantial powers of the management in respect of the whole of the affairs of the Company subject to the superintendence, control and directions of the Board of Directors and shall perform such duties and exercise such powers as may be conferred upon him by a Resolution of the Board and be subject to the obligations and restrictions imposed upon him thereby or by the Act.

Managing Director

REGISTERS 138

The Company shall keep and maintain at its registered office or at such other place as permitted under the Act or the Rules thereunder, all statutory registers and annual returns for such duration as the Board may, unless otherwise prescribed, decide, and in such manner and containing such particulars as prescribed by the Act and the Rules. The registers and copies of annual return shall be open for inspection during 11.00 a.m. to 1.00 p.m. on all working days at the registered office of the Company or at such other place by the persons entitled thereto on payment, where required, of such fees as may be fixed by the Board but not exceeding the limits prescribed by the Act or the Rules thereunder.

Statutory Registers

139 i. Any Member, Beneficial Owner, Debenture or other Security holder or any other person entitled to inspection of any documents/registers/records required to be maintained by the Company under the provisions of the Act or the Rules thereunder or any previous Company Law or to any copy thereof or extract therefrom shall be entitled to the same upon payment of such fee as may be prescribed under the Act or the Rules thereunder. In absence of any such stipulation, a fee of Rs. 10/- per page shall be charged.

ii. A copy of the Memorandum and Articles of Association of the Company and other documents referred to in Section 17 of the Act shall be sent to a member requesting for the same within seven days thereof upon payment of such fees as may be prescribed under the Act or the Rules thereunder. In absence of any such stipulation, a fee of Rs. 10/- for each copy thereof shall be charged.

Inspection/copies of documents, etc.

THE SEAL 140 The Company may if required under the Act have a Common Seal in which

case the Directors shall provide for the safe custody thereof. The Seal shall not be affixed to any instrument except: i. by the authority of a Resolution of the Board of Directors or a Committee of the Board authorized in that behalf, and ii. in the presence of at least one Director and the Secretary of the Company or such other person as the Board may appoint for the purpose, who shall sign every instrument to which the Seal is so affixed. Such signatures shall be conclusive evidence of the fact that the seal has been properly affixed.

Seal

DIVIDENDS AND RESERVE 141 The Company in general meeting may declare dividends, but no dividend

shall exceed the amount recommended by the Board. Company in general meeting may declare dividends

142 Subject to the provisions of the Act, the Board may from time to time pay to the members such interim dividends of such amount on such class of shares and at such times as it may think fit.

Interim dividends

143 i. The Board may, before recommending any dividend, set aside out of the Dividends only to

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profits of the Company such sums as it thinks fit as a reserve or reserves which shall, at the discretion of the Board, be applied for any purpose to which the profits of the Company may be properly applied, including provision for meeting contingencies or for equalizing dividends; and pending such application, may, at the like discretion, either be employed in the business of the company or be invested in such investments (other than shares of the Company) as the Board may, from time to time, thinks fit.

be paid out of profits

ii. The Board may also carry forward any profits which it may consider necessary not to distribute, without setting them aside as a reserve.

Carry forward of profits

144 i. Subject to the rights of persons, if any, entitled to shares with special rights as to dividends, all dividends shall be declared and paid according to the amounts paid or credited as paid on the shares in respect whereof the dividend is paid, but if and so long as nothing is paid upon any of the shares in the Company, dividends may be declared and paid according to the amounts of the shares.

Division of profits

ii. No amount paid or credited as paid on a share in advance of calls shall be treated for the purposes of this regulation as paid on the share.

Payments in advance

iii. All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid; but if any share is issued on terms providing that it shall rank for dividend as from a particular date such share shall rank for dividend accordingly.

Dividends to be apportioned

145 The Board may deduct from any dividend payable to any member all sums of money, if any, presently payable by him to the Company on account of calls or otherwise in relation to the shares of the Company.

No member to receive dividend whilst indebted to the Company and Company’s right to reimbursement therefrom

146 The Board may retain dividends payable upon shares in respect of which any person is, under the Transmission Clause hereinbefore contained, entitled to become a member, until such person shall become a member in respect of such shares.

147 Any dividend, interest or other monies payable in cash in respect of shares may be paid by electronic mode or cheque or warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the registered address of that one of the joint holders who is first named on the register of members, or to such person and to such address as the holder or joint holders may in writing direct.

148 The waiver in whole or in part of any dividend on any share by any document (whether or not under seal) shall be effective only if such document is signed by the member (or the person entitled to the share in consequence of the death or bankruptcy of the holder) and delivered to the Company and if or to the extent that the same is accepted as such or acted upon by the Board.

Waiver of dividend

149 No dividend shall bear interest against the Company. No Interest on Dividend

ACCOUNTS 150 The books of account and books and papers of the Company, or any of

them, shall be open to the inspection of directors in accordance with the applicable provisions of the Act and the Rules.

Inspection by Directors

151 No member (not being a director) shall have any right of inspecting any account or book or document of the Company except as conferred by law or authorised by the Board.

Restriction on inspection by members

WINDING UP 152 Subject to the provisions of Chapter XX of the Act and rules made

thereunder— Winding up of Company

i. If the Company shall be wound up, the liquidator may, with the sanction of a special resolution of the Company and any other sanction required by

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the Act, divide amongst the members, in specie or kind, the whole or any part of the assets of the Company, whether they shall consist of property of the same kind or not.

ii. For the purpose aforesaid, the liquidator may set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the members or different classes of members.

iii. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories if he considers necessary, but so that no member shall be compelled to accept any shares or other securities whereon there is any liability.

INDEMNITY AND INSURANCE 153 Subject to the provisions of the Act, every Director, Managing Director,

Whole-Time Director, Manager, Company Secretary and other officer of the Company shall be indemnified by the Company out of the funds of the Company, to pay all costs, liability incurred and expenses (including travelling expense) which such Director, Managing Director, Whole-Time Director, Manager, Company Secretary and officer may incur or become liable for by reason of any contract lawfully entered into or act or deed done by him in his capacity as such Director, Manager, Company Secretary or officer or in any way in the discharge of his duties in such capacity including expenses.

Directors and officers right to Indemnity

154 Subject as aforesaid, every Director, Managing Director, Whole-Time Director, Manager, Company Secretary or other officer of the Company shall be indemnified against any liability incurred by him in defending any proceedings, whether civil or criminal in which judgement is given in his favour or in which he is acquitted or discharged or in connection with any application under applicable provisions of the Act in which relief is given to him by the Court.

155 The Company may take and maintain any insurance as the Board may think fit on behalf of its present and/or former directors and key managerial personnel for indemnifying all or any of them against any liability for any acts in relation to the Company for which they may be liable but have acted honestly and reasonably in good faith.

Insurance

GENERAL POWER 156 Wherever in the Act, it has been provided that the Company shall have any

right, privilege or authority or that the Company could carry out any transaction only if the Company is so authorized by its Articles, then and in that case this Article authorizes and empowers the Company to have such rights, privileges or authorities and to carry such transactions as have been permitted by the Act, without there being any specific Article in that behalf herein provided.

General Power

SECRECY CLAUSE

157 Subject to the provisions of the Act, no member shall be entitled to require discovery of any information respecting any detail of the Company’s trading or any matter in the nature of a trade secret, mystery of trade or secret process which may relate to the conduct of the business of the Company and which in the opinion of the Board of Directors it may be inexpedient in the interest of the Company to communicate to the public.

Secrecy clause

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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts (not being contracts entered into in the ordinary course of business carried on by our Company or entered into more than two years before the date of the Information Memorandum), which are or may be deemed material have been entered or are to be entered into by our Company. These contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered Office of our Company situated at Aerodrome Road, Jamnagar 361 006 from 10.00 a.m. to 02.00 p.m. on working days from the date of the Information Memorandum till commencement of trading in the Equity Share of our Company.

Documents for Inspection 1. Certificate of Incorporation of our Company. 2. Memorandum and Articles of our Company. 3. Copy of the Fairness Report provided by SPA Capital Advisors Limited dated July 30, 2015. 4. Copy of the Undertaking and the Auditor's certificate dated July 31, 2015 submitted to SEBI confirming

non application of clause 5.16 (a) of the SEBI circulars (CIR/CFD/DIL/5/2013 dated February 4, 2013 and CIR/CFD/DIL/8/ 2013 dated May 21, 2013).

5. Copy of the resolution passed by the Board of directors dated July 31, 2015 approving the scheme. 6. Scheme of Amalgamation between erstwhile Digjam Limited with Digjam Limited (formerly Digjam

Textiles Limited) and their respective Shareholders and Creditors. 7. Letters under Clause 24(f) of Listing Agreement dated October 19, 2015 & October 16, 2015 of BSE and

NSE, respectively approving the Scheme. 8. Order dated February 17, 2016 of the Hon’ble High Court of Gujarat sanctioning the Scheme of

Amalgamation under Section 391 to 394 of the Companies Act, 1956, received by the Company on March 11, 2016.

9. Tripartite agreements dated April 26, 2016 and April 22, 2016 with CDSL & NSDL respectively. 10. Statement of Tax Benefits dated May 05, 2016 from Sarda & Sarda, Chartered Accountants, Jamnagar. 11. Audited Financial results of the Company for the period ended March 31, 2016.

Any of the contracts or documents mentioned in the Information Memorandum may be amended or modified at any time if so required in the interest of our Company or if required by the other parties, without reference to the Shareholders subject to compliance of the provisions contained in the Companies Act, 1956 / Companies Act, 2013 and other relevant statutes.

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DECLARATION

All relevant provisions of the Companies Act, 1956 / Companies Act, 2013 (to the extent notified and applicable), the rules made thereunder and the guidelines issued by the Government of India or the regulations issued by Securities and Exchange Board of India, as the case may be, have been complied with and no statement made in this Information Memorandum is in contrary to the provision of the Companies Act, 1956 / Companies Act, 2013 (to the extent notified and applicable), the Securities and Exchange Board of India Act, 1992 or the rules made thereunder. We further certify that all statements made in the Information Memorandum are true and correct. On behalf of the Board of Directors of Digjam Limited Jatin Jain Company Secretary Date: June 30, 2016 Place: Jamnagar