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Directors Report of Sarla Performance Fibers Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the Twenty Second Annual Report on the business operations together with the Audited Financial Statements for the financial year ended 31st March, 2015 and on the state of affairs of the Company as on the date of this report.

Corporate Overview

Sarla Performance Fibers Limited ('Your Company') is engaged in the business of Specialty Yarn from Last 21 Years having with 2 Manufacturing Plants at Silvassa, UT of Dadra & Nagar Haveli and 1 Dyeing Plant at Vapi, Gujarat and Wholly Owned Subsidiaries (WOS) at British Virgin Islands (BVI) and United States of America (USA) with Group's Corporate Office situated at Mumbai.

FINANCIAL SUMMARY HIGHLIGHTS

The highlights of the performance of the Company for the year ended March 31, 2015 is summarized below:

(Rs. in Lacs)

Financial Year ended Financial Year ended Particulars March 31, 2015 March 31, 2014

Sales & Operations 27,762.72 25,558.27

Less: Excise Duty (1,069.91) (952.38)

Net Sales 26,692.80 24,605.91

Add: Other Income 1146.98 1,032.20 TOTAL INCOME 27,839.79 25,638.10 Profit Before Interest, Depreciation & Tax 5,646.31 4,798.84

Less: Finance Cost 514.48 637.20

Less: Depreciation &amortization 913.55 935.98

PROFIT BEFORE TAX 4,218.28 3,225.67

Less: Provision for Taxation

- Current (1,283.60) (894.00)

- Deferred 33.26 (105.15)

- Earlier Years - - - MAT credit Entitlement - -

NET PROFIT AFTER TAX 2,967.94 2,226.52

Balance bought forward 6,143.42 5,959.12

Excess provision for Dividend distribution tax written back 88.59 67.65

Effect of Change in Method of Depreciation 61.74

AMOUNT AVAILABLE FOR APPROPRIATION 9261.70 8253.29 APPROPRIATION:

Proposed Dividend 668.02 521.27

Dividend Tax 133.56 88.59

Transfer to General Reserve 1,500.00 1,500.00

BALANCE CARRIED FORWARD 6,836.62 6,143.42

BUSINESS PERFORMANCE:

Operations: During the year under review the sales of the Company were Rs. 26,692.80 Lacs as against Rs. 24,605.90 Lacs in 2013-14 registering an annual growth of 8.48%. The FOB value of exports Rs. 15,693.58 Lacs compared to Rs 14,847.14 Lacs.

Profitability: The profit before Depreciation, Interest & Tax was Rs. 5,646.31 Lacs as compared to Rs. 4,798.34 Lacs in the previous year, after providing for depreciation of Rs. 913.55 Lacs (Previous Year Rs. 935.98 Lacs) & provision for taxation of Rs. 1,250.33 Lacs (Previous Year Rs. 999.15 Lacs), there was a net profit of Rs. 2,967.94 Lacs as compared to Rs. 2,226.52 Lacs in the Previous Year.

The audited financial statements for the year ended 31st March, 2015 for each of the company's subsidiary are available on the company website www.sarlafibers.com

DIRECTORS & KMP:

On the recommendation of Nomination and Remuneration Committee, Board of Directors had re-appointed Shri Krishnakumar Jhunjhunwala as Managing Director of the Company for a period of five years effective from 1st October, 2014 to 30th September, 2019 and approved variation in remuneration for the period of five years.

During the year under review, pursuant to the provisions of Section 149 of the Act, Shri. Jigar Shah (DIN: 00191165), Shri Arun Vaid

(DIN: 00351464) and Shri. Parantap Dave (DIN: 00019742) were appointed as Independent Directors of the Company for a period of five years at the Annual General Meeting held on 27th September, 2014. The terms and conditions of appointment of independent directors are as per Schedule IV of the Act. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and Clause 49 of the Listing Agreement, there has been no change in the circumstances which may affect their status as Independent Director during the year.

Pursuant to provisions of Section 196(3)(a) of the Companies Act, 2013, continuation of appointment of Shri Madhusudan Jhunjhunwala as Whole Time Director of the Company was consented by the members at the Annual General Meeting held on 27th September, 2014 for his remaining term up to 31st July , 2015. Thereafter, at the Board Meeting held on 1st August, 2015 on the recommendation of Nomination and Remuneration Committee he was re-appointed for a period of Five years from 1st August, 2015 to 31st July, 2020.

Shri. Lalita P. Aggarwal, Independent Director of the Company appointed on 1st November, 2013, did not seek re-appointment at the previous AGM held on 27th September, 2014 and he ceased to be Director of the Company at that AGM.

During the year under review, in compliance of provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors on 31st March, 2015 appointed women director viz. Ms. Neha Jhunjhunwala as Additional (non- executive non-independent) Director of the Company, who is liable to retire by rotation. She holds office till the conclusion of the ensuing Annual General Meeting. A notice has been received from a member of the Company proposing her candidature for the post of Director. In view of the same, she offers herself for re-appointment at the forthcoming Annual General Meeting.

In terms of provisions of the Section 152 (6) of the Companies Act, 2013, Mr. Madhusudan Jhunjhunwala retires by rotation at the forthcoming Annual General Meeting, and being eligible to offer himself for re-appointment. The profile of director seeking reappointment pursuant to Clause 49(IV)(G)(I) of the Listing Agreement with the Stock Exchanges is included in the annual report.

Mr. Mahendra V. Sheth was appointed as CFO & Company Secretary of the Company w.e.f. 28th January, 2012 and In terms of provisions of the Section 203 (1) of the Companies Act, 2013, Mr. Mahendra V Sheth, was appointed as Chief Financial Officer of the Company w.e.f. 29th May, 2014.

Other than this No Director or Key Managerial Personnel was appointed or has resigned during the year under consideration.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

ANNUAL PERFORMANCE EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee, CSR Committee, Nomination & Remuneration Committee, Risk Management Committee and Stakeholder Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

NOMINATION AND REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This Policy also lays down criteria for selection, independence and appointment of Board Members. The details of this policy are briefly explained in the Corporate Governance Report.

Particulars of Employees drawing remuneration exceeding Rs. 5 Lacs per month or Rs. 60 Lacs per annum:

During the year under review, there was no employee drawing remuneration in excess of what is prescribed under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees:

1. The Ratio of the remuneration paid to each Director to the median remuneration of the employees of the Company during the year under consideration:

Remuneration Median Name of Director Ratio Paid Remuneration

Mr. Madhusudan S. 80,00,000 1,22,400 65.36x Jhunjhunwala (Chairman, Executive Director)

Mr.Krishnakumar 96,00,000 1,22,400 78.43x M. Jhunjhunwala (Managing Director)

Independent directors are paid sitting fees for attending board meetings which are not considered.

2. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary in the financial year:

Percentage Remuneration Name of Director PAID Increase in current financial year

Mr. Madhusudan S. 80,00,000 29.03% Jhunjhunwala (Chairman, Executive Director)

Mr.Krishnakumar M. 96,00,000 45.45% Jhunjhunwala (Managing Director)

Mr. Mahendra Sheth 13,91,000 24.53%

(CFO & Company Secretary)

3. The Average percentage increase in the median remuneration of employees in the financial year: 8-10%

4. The number of permanent employees on the rolls of company: 157

5. Average percentage increase in salaries of non-managerial employees was 8 % as compared to average percentage increase in managerial remuneration which was 15 %

6. Comparison of remuneration of the Key Managerial Personnel against the performance of the Company:

i) Change in sales of the Company: 8.48 % increase

ii) Change in the PAT of the Company: 33.29 % increase

iii) Change in the remuneration of Mr. Madhusudan

Jhunjhunwala, Mr, Krishnakumar Jhunjhunwala and

Mr. Mahendra Sheth (KMPs) (as mentioned in Sr. No. 2)

Percentage Remuneration Name of Director PAID Increase in current financial year

Mr. Madhusudan S. 80,00,000 29.03% Jhunjhunwala (Chairman, Executive Director)

Mr.Krishnakumar M. 96,00,000 45.45% Jhunjhunwala (Managing Director)

Mr. Mahendra Sheth 13,91,000 24.53% (CFO & Company Secretary)

7. Increase in the remuneration paid to the Executive Directors (As mentioned above)

There is no Increase in sitting fees paid to the Independent Directors and Non Executive Directors:

During the year there has been an increase in Gross Revenue from operations by 8.48 % and increase in PAT by 33.29 %. Taking into consideration the above increase as well as performance of individual employees, the average increase in remuneration for the year is 10 %.

8. Variations in the market capitalization*

2014 - Rs. 117.63 Cr

2015 - Rs. 309.13 Cr

9. Price Earning Ratio* as on 31st March 2015: 5.28 Price Earning Ratio* as on 31st March 2014: 9.43

10. Percentage Increase in market quotation in the shares of the Company in comparison to the rate at which the Company came out with the last public issue: Not Applicable.

11. Percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer: Not Applicable,

The Board affirms that the remuneration paid is as per the Remuneration Policy of the Company.

Neither Managing Director nor Whole Time Director of the Company receives any remuneration or commission from any Subsidiary of the Company.

*Market Capitalization and Price Earnings Ratio are calculated based on the Stock Price on BSE Ltd

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:

i. that in the preparation of annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

ii. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that year;

iii. that the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the annual accounts have been prepared on a 'going concern' basis.

v. that the Directors have laid down internal financial controls and such internal financial controls are adequate and operating effectively

vi. that proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business except one transaction details of which is mentioned in Form AOC-2 attached as Annexure C of this Report. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee and also the Board for approval. The particulars of contracts or arrangements with related parties referred to in sub- section 1 of Section 188 of the Companies Act, 2013 are furnished in Form AOC-2 in 'Annexure C to this report.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: www.sarlafibers.com.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

AUDITORS AND AUDITORS' REPORT

STATUTORY AUDITORS:

The Members at the Twenty-first Annual General Meeting approved the appointment of M/s. Sundarlal, Desai & Kanodia, Chartered Accountants, (Firm Registration No. 110560W), as Statutory Auditors of the Company pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed there under to hold office for a period of 3 years till the conclusion of the Twenty Forth Annual General Meeting of the Company, subject to ratification of their appointment at every AGM.

M/s. Sundarlal, Desai & Kanodia have confirmed that they continue to be eligible under Section 141 of the Companies Act, 2013 and the Rules framed there under for continuing as Auditors of the Company. As required by the Companies Act, 2013, the Members are requested to ratify their appointment as Auditors for the FY 2015-2016.

AUDITORS' QUALIFICATION:

There is no Audit qualification in the standalone or consolidated financial statements by the Statutory Auditors for the year under review,

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed CS Ajit Sathe- Proprietor of M/s A. Y Sathe & Co. Company Secretaries in Practice (Registration No.:FCS2899/COP738) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as 'Annexure D'.

The Secretarial Auditor has made following observations.

I) Under the Companies Act, 2013:

a) The Company has given Interest free Unsecured Loans to it's Wholly Owned Foreign Subsidiary Company viz. Sarlaflex Inc., USA.

b) Form MGT - 15 being Form for filing report on Annual General Meeting held on 27th September, 2014 was filed late on 5th June, 2015 by paying prescribed additional fee.

c) Form CHG - 4 for Satisfaction of Charge amounting to Rs. 3.50 Crore created in favor of Andhra Bank, Mumbai satisfied on 28th March, 2014 was filed on 30th April, 2014 with a delay of four days. Form RD-2 seeking Condo nation of the said delay has been filed on 14th July, 2015 under Section 87 of the Companies Act, 2013.

d) The Company has not spent 2% of average net profit of last

three financial years to CSR activities pursuant to Section 135 of the Companies Act, 2013. The reason for not spending the same is provided in the Directors' Report.

II) Under the Listing Agreement:

a) The Company submitted Annual Report for the FY ended

31st March, 2014 to the Stock Exchanges late resulting in non- compliance of Clause 31. For this delay Rs. 1,124/- late fee has been levied by the BSE Limited and the same has been paid by the Company.

Board's Reply to Secretarial Auditors' observations.

Under the Companies Act, 2013:

1. As a part of project funding the Company had agreed to give interest free loan to its wholly owned subsidiary and the said commitment continuous to make the project financially viable. Even provisions under FEMA Regulations permit giving of interest free loans to wholly owned subsidiary Company.

2. Due to oversight report on Annual General Meeting held on 27th September, 2014 in Form MGT-15 was filed late on 5th June, 2015 by paying prescribed additional fee.

3. Form CHG - 4 for Satisfaction of Charge was filed late because the said Form was not available MCA Website, resulting into a delay of 4 Days. Form RD-2 seeking Condo nation of the said delay has been filed on 14th July, 2015 by paying prescribed fees.

4. The Corporate Social Responsibility Committee earmarked Rs. 49.51 Lacs towards Company's CSR activities for year 2014-15. However, the Committee was by then in process of identifying areas where it could contribute money. Hence, the Company could not contribute to CSR in time. Efforts would be made to contribute more in the coming years.

II) Under the Listing Agreement:

a) Due to oversight there was delay in submission of Annual

Report to the stock exchanges for the FY ended 31st March, 2014. For this delay Rs. 1,124/- late fee has been levied by the BSE Limited and the same has been paid by the Company.

COST AUDIT:

Cost Audit was not applicable to the Company for Financial year

DISCLOSURES:

AUDIT COMMITTEE:

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.

VIGIL MECHANISM:

The details pertaining to Vigil Mechanism are included in the Corporate Governance Report, which forms part of this report.

CORPORATE GOVERNANCE:

In compliance with the provisions of Clause 49 of the Listing Agreement, the Report on the Corporate Governance is annexed and forms an integral part of this Report. The requisite certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report of Corporate Governance.

EXTRACT OF THE ANNUAL RETURN:

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as 'Annexure E'.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

EMPLOYEES RELATIONS:

The employees' relation at all levels and at all units continued to be cordial during the year.

ACKNOWLEDGMENT:

Your Directors wish to place on record their appreciation of the dedicated efforts by employees at all levels. The Directors also wish to place on record their word of sincere appreciation to the bankers, the investors, the vendors, the customers, and all other business associates for their continued support.

FOR AND ON BEHALF OF BOARD OF DIRECTORS

Chairman and Whole Time Director

Place: Mumbai MADHUSUDAN S. JHUNJHUNWALA

Date: August 12, 2015 DIN: 00097254


Mar 31, 2014

The Members,

The Directors have pleasure in presenting their Twenty First Annual Report on the business and operations of the Company together with Audited Statement of Accounts for the year ended 31st March, 2014.

There are many talented people who haven''t fulfilled their dreams because they over thought it, or they were too cautious, and were unwilling to make the leap of faith.

1. FINANCIAL RESULTS (Rs. in Lacs)

Particulars 2013-14 2012-13

Total Income 25,558.27 24,142.12

Profit before Financial Charges and Depreciation 4,550.53 3,885.34

Less: Finance Charges 388.89 431.08

Depreciation 935.97 1,324.87 802.72 1,233.80

Profit before Tax 3,225.67 2,651.54

Less: Provision for Tax 894.00 446.82

Provision for Deferred Tax 105.15 277.09

Provision for Wealth Tax

Profit after Tax 2,226.52 1,928.02

Prior period Adjustments

Balance brought forward 5,959.12 4,796.18

Short Provision of Income Tax of earlier years 67.65 (19.59)

Surplus available for appropriation 8,253.29 6,743.79

APPROPRIATION

Transfer to the General Reserve 1,500.00 300.00

Dividend @ 75% (P.Y. 60%) 521.27 417.02

Dividend Tax 88.59 67.65

Balance carried forwarded to the Balance Sheet 6,143.42 5,959.12

2. BUSINESS PERFORMANCE

Your directors are pleased to report performance of the Business operations as follows:

OPERATIONS

During the year under review the sales of the Company were Rs. 24,605.91 Lacs as against Rs. 23,353.98 Lacs in 2012-13 registering an annual growth of 5.36%. The FOB value of exports Rs. 14,847.14 Lacs compared to Rs. 14,922.28 Lacs

PROFITABILITY

The profit before Depreciation, Interest & Tax was Rs. 4,550.23 Lacs as compared to Rs. 3,885.34 Lacs in the previous year. After providing for depreciation of Rs. 935.98 Lacs (Previous Year Rs. 802.72 Lacs) & provision for taxation of Rs. 999.15 Lacs (Previous Year Rs.723.91 Lacs), there was a net profit of Rs. 2,226.52 Lacs as compared to Rs. 1,947.61 Lacs in the Previous Year.

DIVIDEND

Your Directors have pleasure in recommending dividend @ 75% for the year ended 31st March 2014.

3. FIXED DEPOSIT

The company has not accepted any fixed deposit from the public during the Financial year ended under review.

4. PERSONNEL

Particulars of employees within the meaning of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended by the Companies Amendment Act, 1988, are not applicable since there was no employee who was in receipt of remuneration prescribed under the said Rules.

5. AUDITORS & AUDITORS'' REPORT

M/s. Sundarlal, Desai & Kanodia, Chartered Accountants, the Statutory Auditors of the company hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment.

The notes on Accounts referred to in the Auditors'' Report are self explanatory and therefore, do not require any further comments.

6. CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement with Stock Exchanges, Corporate Governance Report is attached as Annexure A to this Report. Certificate of Auditors regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchanges is also attached and forms part of this Report.

7. DIRECTORS'' RESPONSIBILITY STATEMENT

A Directors'' Responsibility Statement as required Under Section 217(2AA) of the Companies Act 1956 is given below:- I. Directors have followed the applicable Accounting Standards in the preparation of the Annual Accounts and proper explanation relating to material departures have been given in Note 26 of Notes on Financial Statements accompanying Accounts.

II. Directors have selected the Accounting Policies as given in

Note 26 of Notes on Financial Statements and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the company as at 31st March, 2014 and of the profits of the company for the year ended on that date.

III. Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the Assets of the company and for preventing and detecting fraud and other irregularities.

IV. Directors have prepared the Annual Accounts for the year ended 31st March, 2014 on a Going Concern basis.

8. CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year. From the Consolidated Profit and Loss Account, it may be observed that the net profit after tax stands at Rs. 3,214.90 Lacs.

9. SUBSIDIARY

As required under the provisions of Section 212 of the Companies Act, 1956, the statement giving the details under Section 212 are given for Sarlaflex, Inc & Sarla Overseas Holdings Limited, The wholly owned subsidiaries of the Company and Salra Europe Lda, is a subsidiary of Sarla Overseas Holdings Limited, in which Sarla Overseas Holdings Limited holds 60% of its Share Capital.

The Ministry of Corporate Affairs, Government of India, vide its Circular dated 8th February, 2011, has granted a general exemption under Sec. 212 (8) of the Companies Act, 1956 from the requirement to attach detailed financial statements of each subsidiary. In compliance with the exemption granted, a statement containing brief financial details of the Company''s subsidiary(ies) for the financial year ended 31st March, 2014 is included in the Annual Report under Annexures to Directors'' Report.

The detailed financial statements and audit reports of the subsidiary of the company is available for inspection at the registered office of the company during office hours and upon written request from a shareholder, your company will arrange to send the financial statements of subsidiary companies to the said shareholder.

10. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

As required under Section 217(1)(e) of the Companies Act, 1956 and the Rules made there under, the concerned particulars relating to Energy Conversation, technology absorption and foreign exchange earnings and outgo are given in Annexure, which is

FORM ''B'': Form for disclosure of particulars with respect to Technology Absorption, Research and Development (R&D)

Specific areas in which R & D is Carried out by the company.

New Product Development, process Development and optimising process parameters.

Benefits derived as a result of the above R & D.

Introduction of several new types of Polyester and Nylon Yarns.

Future Plan of Action.

To meet the increasing requirement of customers around the world and development of new products.

Expenditure on R & D. a) Capital b) Recurring c) Total

All machineries are dedicated for operational as well as R & D activities hence no separate accounts are maintained and as such expenditure on R & D is not separately ascertainable

d) Total R & D expenditure as per percentage of total Turnover

N.A.

Technology absorption, adoption and innovation. 1. Efforts in brief, made towards Technology absorption, adoption and innovation products.

Continuous efforts towards improvement of process equipment and are made out to suit market requirements and to achieve optimum operational efficiency.

2. Benefit derived as a result of the above efforts e.g product improvement, cost reduction, development, import substitution etc.

Introduction of several new products

3. In case of Imported Technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished. a) Technology Imported b) Year of Import c) Has Technology been fully Absorbed - d) If not fully absorbed areas where this has not taken place, reasons therefore and future plans of action

N.A.

C) Export Plans & Foreign Exchange earnings and outgo:

The Company has now established a potential solid customer base in European countries especially Italy, Spain, Romania, Turkey, U.K. etc., some countries in Central and North America and Asian Countries like China, Hong Kong etc. Israel, Jordan, Canada & South America countries like Argentina and Brazil are the thrust areas for the future and a good beginning has been made towards this.

FOREIGN EXCHANGE EARNED FOREIGN EXCHANGE USED

Rs.14,847.17 Lacs Rs. 9,118.49 Lacs

11. ACKNOWLEDGMENT

The Directors take this opportunity to place on record their appreciation and sincere gratitude to the various Departments of the Central and State Governments, Andhra Bank, Citibank N.A., DBS Bank, Standard Chartered Bank and Induslnd Bank for their valuable assistance and support. The Management appreciates the enthusiasm and co-operation of all Contractors/Agencies for their continued support. The Directors also acknowledge the sincerecontribution by the workers and staff of the Company at various levels and thank to Company''s Shareholders for their continued support.

FOR AND ON BEHALF OF BOARD OF DIRECTORS

Place : Mumbai. MADHUSUDAN S. JHUNJHUNWALA Date : 29th May, 2014 Chairman & Whole Time Director


Mar 31, 2010

The Members. Your Directors have pleasure in presenting their Seventeenth Annual Report on the business and operations of the Company together with Audited statement of Accounts for the year ended 31 st March, 2010.

1. FINANCIAL RESULTS

Global warming can be traced to 6 families of pollutants - Methane, Carbon Dioxide, Halocarbons, Black Carbon, CO and VOCs, and Nitrous oxide. These gases and black carbon are emitted from many human endeavors, from transportation to farming to heating.

(Rs. in Lacs)

Particulars 2009-10 2008-09

Total Income 13,245.18 12,184.37

Profit before Financial Charges and Depreciation 2,345.61 2,012.03

Less: Financial Charges 234.43 299.91

Depreciation 512.52 746.95 476.15 776.06

Profit before Tax 1,598.67 1,235.97

Less: Provision for Tax 400.00 324.24

Provision for Deferred Tax 70.20 60.76

Provision for Fringe Benefit Tax 0 6.34 Profit after Tax 1128.43 844.63

Prior period Adjustments 0 (12.22)

Balance brought forward 3,292.46 3,044.65

Short Provision of Income Tax of earlier years 5.62 -

Surplus available for appropriation 4,415.27 3,877.06

APPROPRIATION

Transfer to the General Reserve 300.00 300.00

Dividend @ 35% (RY. 35%) 243.26 243.26

Dividend Tax 40.40 41.34

Balance carried forwarded to the Balance Sheet 3,831.60 3,292.46

2. BUSINESS PERFORMANCE

Your directors are pleased to report performance of the Business operations as follows :

. Operations: During the year under review the sales of the Company were Rs. 1 31 61.68 Lacs as against Rs. 12,1 63.75 Lacs in 2008-09 registering an annual growth of 8.20%. The FOB value of exports decreased by 2.54% from Rs. 69,80.04 Lacs to Rs. 68,02.49 Lacs.

. Profitability: The profit before Depreciation, Interest & Tax was Rs. 23,45.61 Lacs as compared to Rs. 20,12.03 Lacs in the previous year. After providing for depreciation of Rs.512.52 Lacs (Previous Year Rs. 476.15 lacs) & provision for taxation of Rs.470.24 Lacs (Previous Year Rs. 391.34 lacs), there was a net profit of Rs. 1128.43 Lacs as compared to Rs. 844.63 Lacs in the Previous Year.

. Dividend: Your Directors have pleasure in recommending dividend @ 35% for the year ended 31st March 2010.

5. FIXED DEPOSIT

The company has not accepted any fixed deposit from the public during the Financial year ended under review.

6. PERSONNEL

Particulars of employees within the meaning of Section 21 7(2A) of the Companies Act, 1 956, read with the Companies (Particulars of Employees) Rules, 1975, as amended by the Companies Amendment Act, 1988, employee who was in receipt of remuneration prescribed under the said Rules, as per annexure "A".

7. AUDITORS & AUDITORS REPORT

M/s. Sundarlal, Desai & Kanodia, Chartered Accountants, the Statutory Auditors of the company hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re- appointment.

The notes on Accounts referred to in the Auditors Report are self explanatory and therefore, do not require any further comments.

8. CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement with Stock Exchanges, Corporate Governance Report is attached as Annexure A to this Report. Certificate of Auditors regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchanges is also attached and forms part of this Report.

9. DIRECTORSRESPONSIBILITY STATEMENT

A Directors Responsibility Statement as required Under Section 21 7(2AA) of the Companies Act 1 956 is given below:-

I. Directors have followed the applicable Accounting Standards in the preparation of the Annual Accounts and proper explanation relating to material departures have been given in Schedule 20 of Notes on Accounts forming part of the accompanying Accounts

ii. Directors have selected the Accounting Policies as given in Schedule 20 of Notes on Accounts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the company as at 31 st March, 201 0 and of the profits of the company for the year ended on that date.

iii. Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1 956 for safeguarding the Assets of the company and for preventing and detecting fraud and other irregularities.

iv. Directors have prepared the Annual Accounts for the year ended 31st March, 2010 on a Going Concern basis.

10.CONSOLIDATED FINALICAL STATEMENTS

In compliance with the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year. From the Consolidated Profit and Loss Account, it may be observed that the net profit after tax (before share of loss in associate company and prior period expenses) stands at Rs. 1 691.64 Lacs.

II. SUBSIDIARY

As required under the provisions of Section 212 of the Companies Act, 1956, the accounts together with Directors Report of the subsidiary company namely Sarla Overseas Holdings Limited., made out in accordance with the requirements of the Companies Act, 1956, are appended to and form part of the Annual Report.

A statement as required under Section 212 of the Companies Act, 1956 is also enclosed.

12. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

As required under Section 217(l)(e) of the Companies Act, 1956 and the Rules made there under, the concerned particulars relating to Energy Conversation, technology absorption and foreign exchange earnings and outgo are given in Annexure, which is attached hereto and forms part of the Report.

Our carbon based fuels have very different characteristics. Oil and natural gas have more energy, pound for pound, than coal. But oil produces 40 per cent more C02 than gas, and coal creates 40 per cent more than oil. Wood, the only renewable carbon based fuel, contains the least energy by weight.

Form for Disclosure of particulars with respect to conservation of Energy

Current Year 2009-10 Previous Year 2008-09

A. Electricity

a) Purchased

Unit 18,872,288.00 17,336,463.00

Total Amount (Rs.) 76,169,507.29 69,334,926.00

Rate/Unit (Rs.) 4.04 4.00

b) Own Generation

1) Through diesel generator 183,872.00 285,940.00

Unit per Itr. of diesel oil 3.43 3.26

Cost/Unit (Rs.) 7.45 8.48 2) Through steam turbine generator - -

B. Coal (Specify quantity & where used) - -

C. Furnace Oil

For Generating steam for Boiler - Ltrs. 526,951 443,748

Total Amount (Rs.) 12,392,981 10,000,432

Cost/Ltr. (Rs.) 23.52 22.53

D. Others/Internal generation - -

E. Consumption per unit of production

Standard (if any) Current Year 2009-10 Previous Year 2008-09 Product - Yarns (M.T.) - 9388 9642

Electricity - Units - 2030 1828

Furnace Oil - Ltrs. - 196 173

Coal (Specify quality) - - -

Others (Specify) - - -

Form for disclosure of particulars with respect to Technology Absorption, Research and Development (R&D)

1. Specific areas in which R&D is Carried out by the company New Product Development,

Process Development and

Optimising Process Parameters.

2. Benefits derived as a result of the above Introduction of several new types of Polyester and Nylon Yarn.

3. Future Plan of Action To meet the increasing requirement of customers around the

world and development of new products.

3. Expenditure on R & D. All machineries are dedicated for operational as well as R & D

a) Capital activities hence no separate accounts are maintained and as

b) Recurring such expenditure on R&D is not separately ascertainable.

c) Total

d) Total R&D expenditure as per percentage of total Turnover. N. A.

4. Technology absorption, adoption and innovation. Continuous efforts towards improvement of process and

1. Efforts in brief, made towards Technology absorption, equipment are made out to suit market requirements and to adoption and innovation products achieve optimum operational efficiency.

2. Benefit derived as a result of the above efforts e.g Introduction of several new products

product improvement, cost reduction, development,

import substitution, etc.

3. In case of Imported Technology (imported during the last N.A. 5years reckoned from the beginning of the financial year), following information may be furnished.

a) Technology Imported

b) Year of Import

c) Has Technology been fully Absorbed ?

d) If not fully absorbed areas where this has not taken place, reasons therefore and future plans of action.

b) Export Plans & Foreign Exchange earnings and outgo:

The Company has now established a potential solid customer base in European countries especially Italy, Spain, Romania, U. K. and Asian Countries China, Hong Kong etc.

Israel, Jordan, Canada & South America countries like Argentina and Brazil are the thrust areas for the future and a good beginning has been made towards this.

FOREIGN EXCHANGE EARNED FOREIGN EXCHANGE USED

(Rs. in Lacs) (Rs. in Lacs)

Rs. 6,802.49 Rs. 6,537.73

Place: Mumbai.

Date: 17th May, 2010

13. ACKNOWLEDGMENT

The Directors take this opportunity to place on record their appreciation and sincere gratitude to the various Departments of the Central and State Governments, Andhra Bank, Citibank N.A., Corporation Bank, DBS Bank and Standard Chartered Bank for their valuable assistance and support. The Management appreciates the enthusiasm and co-operation of all Contractors/Agencies for their continued support. The Directors also acknowledge the sincere contribution by the workers and staff of the Company at various levels and thank to Companys Shareholders for their continued support.

For & on behalf of Board of Directors

(MADHUSUDAN S. JHUNJHUNWALA)

Chairman & Whole Time Director

 
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