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Directors Report of Sumeet Industries Ltd.

Mar 31, 2016

DIRECTOR''S REPORT

To The Members of Sumeet Industries Limited

The Directors have pleasure in presenting the 28th Annual Report and Audited Statement of Accounts for the year ended 31st March, 2016.

The Company has delivered a mixed performance despite considerable headwinds. The Company has registered consolidated revenue of Rs. 1235.41 Crores with Net Profit of Rs. 18.92 Crores. We, remained resolute and relentless in our quest for strengthening our cost-competiveness, better management of working capital and operational excellence across all businesses.

FINANCIAL RESULTS (R in lacs)

r

Particulars

Standalone

Consolidated

2015-16

2014-15

2015-16

2014-15

Sales & Income form operation

105248.48

93103.32

123540.79

116533.33

Other Income

542.99

669.22

572.99

91.85

Profit before Financial cost, Depreciation

and Exceptional items & Tax ( EBIDTA )

9012.68

8011.24

9431.86

8547.42

Less : Interest

4161.08

3536.00

4357.51

3708.60

Depreciation

2013.57

1973.20

2013.57

1973.21

Profit before Tax

2838.03

2502.04

3060.78

2865.61

Less : Provision for Taxation

Current tax

567.83

500.60

583.17

544.75

Mat Credit

-525.04

-462.87

-525.04

-462.87

Deferred Tax

1030.37

566.07

1030.37

566.07

Profit after Tax

1764.87

1898.24

1972.28

2217.66

Less : Taxation for previous year

80.41

52.50

80.41

52.50

profit available for appropriation

1684.46

1845.74

1891.87

2165.16

Dividend on Equity & Pref. Shares

Transfer to General Reserve

1684.86

1845.74

1891.87

2165.16

OPERATIONS

Despite challenging business environment the company has posted a satisfactory performance for the year under review. The company has produced 90891.72 Tons of Pet Chips / Polyester and Texturised Yarn and dispatched 90493.18 Tons of Pet Chips / Polyester and Texturised yarns.

Income from operation (Consolidated) of the company has increased from Rs. 1165.33 Crores to Rs. 1235.41 Crores. EBIDTA has been increased from Rs. 85.47 Crores to Rs. 94.32 Crores and Net profit after Tax (Consolidated ) has been marginally decreased from Rs. 21.65 Crores to Rs. 18.92 Crores in comparison to previous year. Our earning per shares stand at Rs. 2.90 and Book Value per Shares at Rs. 42.81 (Based on equity shares) as on 31st March , 2016.

Two important factors which improved the performance of bottom-line during the year despite headwinds were : a) Saving in energy cost due to sourcing of power through open access and high sales in quantities term in the last quarter of the year under review. To further strengthen the company’s drive on cost optimization , the company has hired the services of a well reputed consulting firm for detailed cost study.

The year 2015-16 remained one of the challenging year as the polyester industry faced several challenges. Firstly, crude prices remained decline during the year, which triggered reduction in prices for Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG) (key raw materials for polyester manufacturing). Secondly, the government levied Anti-Dumping Duty on PTA imports, which resulted in an increase in raw material cost.

Your company are enhancing its capacity on producing speciality and value added yarns and focusing on expanding market reach both in domestically and internationally , cost optimization and elevating people potential.

A detailed analysis of the operations of your Company during the year under report is included in the Management Discussion and Analysis Report , forming part of this Annual Report.

DIVIDEND

The Board of directors do not recommended to declare dividend during the year due to ploughing back the profit to be utilized in the setting up new modification cum expansion programs and general corporate purposes.

EXPAINSION & MODERNISATION

The Company is cautiously watching development in synthetic yarn industries and also evaluating various options which could be available to it for its growth strategy. Until such time, it will continue to put its thrust on reengineering of its existing operations and carry on balancing investment in modification of existing equipment’s and some fresh investments in energy conservation schemes.

During the financial year under review , the company has modified its spinning lines for improving its operational costs and efficiencies through the following strategic projects which are :-

1) Position of 4 nos. of existing FDY line has been modified for producing colour FDY Yarns.

2) Process Line of P.P. Yarn has been modifying for manufacturing Colour Polyester Yarns. After completion of this modification , the company will produce 4500 TPA Colour Polyester Yarns.

3) In old POY Plant additional 48 end winders are adding to enhance the production capacity and after completion of this modification , POY production of the company will be increased by 4500 TPA.

4) F. O. based 4.8 MW Captive Genset Power Plant has been installing to further reducing power cost . OVERSEAS SUBSIDIARY COMPANY

The company has a wholly owned subsidiary company named “Sumeet Global Pte Limited“ in Singapore registered with Registrar of Companies and Business, Singapore. Pursuant to Accounting Standard AS- 21 issued by the Institute of Chartered Accountants of India and the provisions of the Listing Agreement with Stock Exchanges, the company has prepared Consolidated Financial Statements of the Company and its subsidiaries are included in the Annual Report.

Pursuant to the provision of section 136 of the Act, the financial statements of the company, consolidated financial statements along with the relevant documents and separate audited accounts in respect of Sumeet Global Pte Limited are available on the website of the company.

EXPORTS

The company has been exploring all the possibilities for exporting its products. During the year under review, your company has exported products worth of Rs. 131.85 Crores.

At present company is exporting to Egypt, Saudi Arabia, China, Argentina, Poland, Vietnam, Philippines, Portugal, Morocco, Columbia, Bangladesh, Russia, Ethiopia, Mexico, Nepal, Brazil, Peru, Algeria, Thailand, U.S.A, Singapore and Turkey etc. The company is weighing further possibilities to export its value added newly developed Carpet Yarns. Exploring export markets has been a key area of focus for the company. Your Company expects more growth in the overall export sales in the current year also.

DEPOSITORY SYSTEM

As members are aware, the company’s shares are compulsorily tradable in the electronic form. As on March 31, 2016 almost 94.71% of the Company’s total paid-up capital representing 5,80,39,738 shares were in dematerialized form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.

CREDIT RATING

The Company’s financial discipline and prudence is reflected in the strong credit ratings ascribed by Brickwork Ratings India Limited as below :-

Long Term Borrowing : BWR BBB, Outlook : Stable

Short Term Borrowing : BWR A3

FIXED DEPOSITS

The Company has invited deposits from public in accordance with the Section 73 and 74 of the Companies Act, 2013 (corresponding Section 58 A of the Companies Act, 1956) to the tune of Rs. 396.14 Lacs during the financial year 2013-14. No fresh deposits have been invited and nor any deposits have been renewed in the financial year 2015-16. Total outstanding deposits after repaying on maturity as on 31.03.2016 has been remained Rs. 2,02,79,000/-. There were no deposits, which were claimed but not paid by the Company as on date.

DIRECTORS

Mr. Shankarlal Somani (DIN No. 00165238), Whole-time Director of the Company, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for re-appointment.

As per provisions of the Companies Act, 2013, Independent Director may be appointed for a term up to five years and shall not be liable to retire by rotation. Accordingly the Board recommends the appointment of Mr. Bhagchand Chordia (DIN No. 00165398) and Mr. Atmaram Sarda (DIN No. 06713264) as Independent Director of the Company for a term upto 3 (Three) consecutive years and whose office shall not be liable to retire by rotation.

The company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149 (6) the Companies Act, 2013 and SEBI (LODR) Regulation, 2015.

The details of proposal of appointment/re-appointment of Mr. Shankarlal Somani, Mr. Bhadchand Chordia and Mr. Atmaram Sharda is mentioned in the Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 of the Notice of the 28th Annual General Meeting.

AUDITORS

a) Statutory Auditors

In compliance with the Companies (Audit and Auditors) Rules, 2014, the Members, at the 27th Annual General Meeting of the Company held on September 30, 2015, appointed M/s. Pradeep Singhi & Associates, Chartered Accountants, (ICAI registration no.:108029W) as Statutory Auditors of the Company to hold the office until the conclusion of the next Annual General Meeting of the Company. Members are requested to reappoint them at the Annual General Meeting.

b) Cost Auditors

The Company has been maintaining cost accounting records in respect of manufacture of polyester yarns pursuant to directives of the Central Government. The company has been appointed M/s. V.M. PATEL & ASSOCIATES, (Firm Registration No. 10519) as Cost Auditors, for conducting the audit of cost records for the financial year 2016-17 and approval of the members is being sought for ratification of their remuneration.

c) Internal Auditors

The Board has appointed M/s. RRA & Co., Chartered Accountants (ICAI Registration Number 112115W) as Internal Auditors of your company for the financial year 2016-17. The report prepared by the Internal Auditors is to be reviewed by the Statutory Auditors & Audit Committee of the company.

d) Secretarial Auditors

M/s. Dhiren R. Dave, Practicing Company Secretaries (CP No. 2496, Membership No. 4889) were appointed as Secretarial Auditor, to conduct secretarial audit of the company for the financial year 2015-16. The Secretarial Audit Report for the financial year ended 31 March 2016 is annexed herewith and forms part of the Annual Report as Annexure-1. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The Board has re-appointed Dhiren R. Dave, Practicing Company Secretaries, as secretarial auditors of the Company for the financial year 2016-17.

MANAGEMENT DISCUSSION AND ANALYSIS

In terms of Clause 49 (VIII) (D) of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis Report for the FY 2015-16 duly reviewed by Audit Committee and approved by Board forms part of this Report.

PERSONNEL AND RELATED DISCLOSURES

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the company. Pursuant to the provisions of the Companies (Appointment & Remuneration of managerial personnel) rules 2014, no employee is drawing remuneration in excess of the prescribed limits. Your company also appreciates that revenue and profit growth cannot take place without the right equality of people. To that effect, your company has undertaken a series of measures that ensures that the most appropriate people are recruited in to the organization.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure-2 forming part of the Annual Report.

INTERNAL CONTROL SYSTEM

Your Company has a well established Internal Control system to ensure an effective internal control environment that provides assurance on the efficiency of conducting business, including adherence to the 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 disclosures. The Internal Auditor certifies on the assurance of adequacy of Internal Control System on quarterly basis which are regularly reviewed by the Audit Committee. Independence of the audit is ensured by the direct reporting of internal audit function to the Audit Committee of the Board.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility is an integral part of the Company’s ethos and policy and it has been pursuing on a sustained basis. The Company assists schools situated at near by villages by distributing dresses & books among poor students and computers nearby situated primary schools etc. Technical education and training are imparted to the employees through Industrial Training and Workshops. Emphasis was laid on creation of awareness amongst the villagers about the need to protect the environment. CSR activities carried out by the Company have strengthened the relationship with local people. The short fall of Rs. 13.40 Lacs in the amount spent on CSR activities during the year ended on 31st March ,2016 is intended to be utilized in future upon identification of suitable projects within your company’s CSR policy.

The brief outline of the Corporate Social Responsibility (CSR) Policy of the company and the initiatives undertaken by the company on CSR activities during the year are set out in Annexure of this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014. (Annexure-3). The Policy is available on the website of the Company.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

The Company has continuously adopted structures that help attract best external talent and promote internal talent to higher roles and responsibilities. Sumeet Industries’ people centric focus providing an open work environment fostering continuous improvement and development helped several employees realize their career aspiration during the year.

The Company continued to maintain harmonious and cordial relations with its workers in all its businesses during the year under report. Your company firmly believes that a dedicated work force constitute the primary source of sustainable competitive advantage.

PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has in place Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act; 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Your Directors state that during the year under review, there were no cases filed pursuant to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

RISK MANAGEMENT

Risk Management is the systematic process of understanding, measuring, controlling and communicating organization’s risk exposures while achieving its objectives. The company’s risk management policy stems from a philosophy of pursuing sustainable growth and creating economic value while calibrating and mitigating risks. Risk Management is an important business aspect in the current economic environment and its objective is to identify, monitor and take mitigation measures on a timely basis in respect of the events that may pose risks for the business.

The Board of Directors regularly review risks and threats and takes suitable steps to safeguard its interest and that there is no element of risk identified that may threaten the existence of the Company.. The focus shifts from one area to another area depending upon the prevailing situation. The Risk Management Policy has been reviewed and found adequate to the requirements of the Company by independent firms of Chartered Accountants and approved by the Board. A detailed report on significant risks and mitigation is forming part of Management’s Discussion and Analysis.

INSURANCE

All the properties of the Company including buildings, plant and machineries and stocks have been adequately insured.

LOANS, GUARANTEES OR INVESTMENT MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Loans, guarantees and investments covered under section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT.

No material changes and commitments affecting the financial position of the Company occurred from the end of the financial year 2015-16 till the date of this report. Further there was no change in the nature of business of the Company.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT.

During the year under consideration, there were no such instances.

EMPLOYEE STOCK OPTION

The company has not issued any Employee Stock Option.

CHANGE IN SHARE CAPITAL

During the year under review the company has issued and allotted 1,00,00,000 6% Non-Convertible Redeemable Preference Shares of Rs.10/- each at a premium of Rs. 5/- aggregating Rs. 15.00 Crores to the Promoters and Promoter group.

FOREIGN EXCHANGE TRANSACTIONS

In order to hedge the company''s exposure to foreign exchange and interest rate, the company enters into forward contracts. The volatility witnessed in the global markets has reiterated the need for robust forex management systems and prudent investment practices. All forex exposures are hedged upon the occurrence of an exposure. In case of liabilities in respect of foreign currency loans obtained for acquisition of fixed assets, the variation in the liabilities arising out of exchange rates at the year end have been capitalized during the year as per Companies (Accounting Standard) Amendment Rules, 2009.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information in accordance with the provisions of Section 134 (3) (m) of the Companies Act, 2013 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure-4 forming part of this report.

RESEARCH & DEVELOPMENT

The Company is giving great emphasis to innovation in product and process technology and operational efficiencies. The company has set up a separate fully equipped well designed lab for testing of MEG and PTA and developing better quality of Pet chips and Yarns with different deniers and filaments. It has institutionalized a multiple-stage quality control system at the material handling, operations and finished goods stage. Efforts are made to explore and develop more valued added category of yarns. The enhanced quality so developed has been performing well in the domestic as well as in international market. Successful efforts are being made to reengineer the products & process to reduce cost and optimize material consumption. The product lines of the plant are designed and re-engineered to change product with minimum changeover losses and thus meet customer requirement even for small quantities.

CONTRACTS AND ARRANGEMENT WITH RELATED PARTY

All transactions entered with Related Parties for the year under review were on arm’s length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made there under are not attracted. Thus, disclosure in form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel.

All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained on a quarterly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are audited by the Risk Assurance Department and a statement giving details of all Related Party Transactions are placed before the Audit Committee and the Board for review and approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. The web-link of the same has been provided in the Corporate Governance Report. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by Securities and Exchange Board of India (‘SEBI’). A separate Report on Corporate Governance along with Certificate from M/s. Pradeep Singhi & Associates, Chartered Accountants on compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is provided as part of this Annual Report.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 in prescribed Form MGT-9 (Annexure-5) is forming part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

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

CODE OF CONDUCT

As prescribed under the provisions of Section 149 of the Companies Act, 2013 read with Schedule IV thereto and Regulation 26 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for its Board of Directors and Senior management and employees, the Company has formulated a comprehensive Code of Conduct (the Code). The Code is applicable to it''s Directors and Senior management and employees to such extent as may be applicable to them depending upon their roles and responsibilities. The Code gives guidance and support needed for ethical conduct of business and compliance of law. The Code reflects the values of the Company viz. Customer Value, Integrity, one team and Excellence.

A copy of the Code has been uploaded on the Company’s website www.sumeetindustries.com. The Code has been circulated to all the Directors and Management Personnel and its compliance is affirmed by them annually.

A declaration signed by the Company’s Managing Director for the compliance of this requirements is published in this Report.

DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS

Pursuant to Section 149(6) of the Companies Act, 2013, Independent Directors of the Company have made a declaration confirming the compliance of the conditions of the independence stipulated in the aforesaid section.

WHISTLE BLOWER MECHANISM

In order to ensure that the activities of the Company and its directors , employees and Vendors are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the Company has adopted a Vigil mechanism/Whistle Blower Policy. This policy is explained in Corporate Governance Report and also uploaded on the website of the company i.e. www.sumeetindustries.com

DISCLOSURE RELATED TO BAORD, COMMITTEES AND POLICIES

A) BOARD MEETINGS :

The Board of Directors met 17 times during the financial year ended 31st March, 2016 in accordance with the provisions of the Companies Act,2013 and rules made there under. The details thereof are given in the Corporate Governance Report forming part of the Annual report.

B) COMMITTEE MEETINGS :

AUDIT COMMITTEE

The Audit Committee of the Board comprises of Mr. B.C. Chordia ( Chairman ) , Mr. Sumeet Kumar Somani , Member and Mr. Atamram Sarda , Member.

All recommendations made by the Audit Committee were accepted by the Board during the year 2015-16. The brief details of the Audit Committee are given in Corporate Governance Report forming part of the Annual report .

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee of the Board comprises of Mr. B. C. Chordia (Chairman), Mr. Atamram Sarda, Member and Mr. Dinesh Sharan Khare, Member.

The Nomination and Remuneration Committee and this Policy are in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and SEBI (LODR) Regulation, 2015 (as may be amended from time to time). Emphasis is given to persons from diverse fields or professionals.

The Nomination and remuneration Committee has framed the “NOMINATION & REMUNERATION AND EVALUATION POLICY “(Annexure-6 (i)) and “POLICY ON BOARD DIVERSITY (Annexure-6 (ii)) “forming part of the Annual Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Committee review and ensures redressal of investor grievances. The Stakeholders Relationship Committee of the Baord comprises of Mr. B. C. Chordia (Chairman), Mr. Atamram Sarda, Member and Mr. Sumeet Kumar Somani, Member.

The brief details of the Stakeholders Relationship Committee are given in Corporate Governance Report forming part of the Annual report .

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Board has laid down the Company’s policy on Corporate Social Responsibility (CSR) and the CSR activities of the company are carried out as per the instructions of the Committee.

The CSR committee of the Board comprises of Mrs. Gangadevi Somani, Chairman , Mr. Sumeet Kumar Somani, Member and Mr. Atmaram Sarda , Member.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulation, 2015, 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, Nomination and Remuneration Committee. This evaluation is led by the Chairman of the Board Governance, Nomination and Remuneration Committee with specific focus on the performance and effective functioning of the Board.

The result of the evaluation is satisfactory and adequate and meets the requirement of the Company.

KEY MANAGERIAL PERSON

Mr. Shankarlal Somani who is Managing Director (Executive), Mr. Sumeet Kumar Somani, the Executive Director and Chief Financial Officer and Mr. Anil Kumar Jain, Company Secretary who have been appointed before commencement of the Companies Act, 2013 are the Key Managerial Personnel of the company.

ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your Directors wish to place on record their deep sense of appreciation for devoted services of the Executives, Staff and workers of the Company for its success.

On behalf of the Board of Directors

Sd/-

Place : Surat Shankarlal Somani

Date : 4th August 2016 Chairman cum Mg. Director


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 26th Annual Report and Audited Statement of Accounts for the year ended 31stMarch, 2014.

The robustness of any business is effectively measured by how the company performs in its most challenging period. The Indian economy passed through a difficult phase with business activities showing downsizing growth in most of sectors due to depreciation in the value of the rupee, rising crude prices, high inflation etc. Even during an economic slowdown, your company has continued to grow and registered net profit of Rs. 1761.54 Lacs and Turnover of Rs. 110799.62 Lacs due to efficient management of energy and overhead cost, general improvement in operational efficiency and better management of working-capital. We have further strengthen our competitive capabilities to deliver more consistent growth focusing on cost rationalization and consolidating capabilities.

FINANCIAL RESULTS (Rs. in lacs) (Rs. in lacs) 31-03-14 31-03-13

Gross profit before interest & 8170.69 7067.39 Depreciation

Less: Interest 3050.90 2171.88

Depreciation 2452.85 1989.86

Profit before Tax 2666.94 2905.65

Less : Provision for Taxation

Current Tax 559.00 581.34

MAT Credit (559.00) (581.35)

Deferred Tax 873.32 944.70

Profit after Tax 1793.62 1960.96

Less : Taxation of Previous Year 32.08 45.02

Profit available for appropriation 1761.54 1915.94

Dividend on Equity & Pref. Share - 269.82 and Dividend Tax Short Prov. For Dividend for previous year - -

OPERATIONS

The company has posted a satisfactory performance for the year under review. The company has produced 87460.918 Tons of Pet Chips / Polyester / Polypropylene Multifilament Yarn and dispatched 78905.632 Tons of Pet Chips / Polyester / P.P. Yarns.

Income from operation of the company has marginally decreased from Rs. 1159.34 Crores to Rs. 1108.00 Crores. EBIDTA has been increased from Rs. 70.67 Crores to Rs. 81.71 Crores and Net profit after Tax has been marginally decreased from Rs. 19.16 Crores to Rs. 17.62 Crores in comparison to last year.

DIVIDEND

The Board of directors do not recommended to declare dividend during the year due to ploughing back the profit to be utilized in the setting up new Texturising Machineries and general corporate purposes.

EXPANSION & MODERNISATION

During the year under review your company has successfully commissioned Waste Recycling plant with 5400 TPA capacity and also efforts are being made for increasing the capacity of recycled chips. Under this plant company is producing chips from wastage yarns of polyester.

During the year the company has also successfully increased it''s spinning capacity of FDY production by upgrading old eight end winders by replacing them with twelve end high speed winders and thereby total capacity of the FDY production has been increased from 40600 TPA to 51450 TPA.

During the year the company has also set up 66 KV Sub-station at its plant and taking supply of power from DGVCL. The company is also sourcing power from open access purchase through grid under open access regulation.

NEW PROJECT

In the current financial year, the company is going to setup8(Eight) new Texturising machineries as forward integration with total capacity of 40 Tons per day to produce DTY yarns of varied deniers & filaments.

The company is also exploring enhancing the capacity of manufacturing recycled chips from Waste Recycling Plant by importing some more machinery of new technologies.

OVERSEAS SUBSIDIARY COMPANY

The company has incorporated a wholly owned subsidiary company in Singapore registered with Registrar of Companies and Business, Singapore. Pursuant to Accounting Standard AS- 21 issued by the Institute of Chartered Accountants of India and the provisions of the Listing Agreement with Stock Exchanges, the company has prepared Consolidated Financial Statements of the Company and its subsidiaries are included in the Annual Report.

EXPORTS

The company has been exploring all the possibilities for exporting its products. During the year under review, your company has exported products worth of Rs. 286.75 Crores in comparison to Rs. 122.24 Crores in the last year showing an increase of 134% over previous year.

At present company is exporting to Bangladesh, Egypt, Saudi Arabia, China, Argentina, Iran, Poland, Vietnam, Philippines, Israel, Morocco, Columbia, Ethiopia, Mexico, Nepal, Brazil, U.S.A& Singapore etc. Exploring export markets has been a key area of focus for the company. Your Company expects more growth in the overall export sales in the current year also.

DEPOSITORY SYSTEM

As members are aware, the company''s shares are compulsorily tradable in the electronic form. As on March 31, 2014 almost 94.62% of the Company''s total paid-up capital representing 5,80,39,738 shares were in dematerialized form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.

FIXED DEPOSITS

The Company has invited deposits from public in accordance with the section 58 A of the Companies Act, 1956 (corresponding Section 73 and 74 of the Companies Act, 2013) to the tune of Rs. 396.14 Lacs . There were no deposits, which were claimed but not paid by the Company.

DIRECTORS

Mr. Bhagchand Chordia (DIN No. 00165398), Director of the company, would retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.

The Board of Directors at their meeting held on 28/06/2014 has appointed Smt. Ganga Devi Somani, (DIN No.06913790) as an Additional director of the company. Smt. Ganga Devi Somani retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer himself for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure.

(ii) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are "reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

(iii) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) That the directors had prepared the annual accounts on a going concern basis.

(v) The Director, in the case of a listing Company, had laid down, internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

AUDITORS

M/s. Pradeep Singhi & Associates, Chartered Accountants hold office until the conclusion of the ensuing Annual General Meeting. They have confirmed that their appointment, if made, would be within the prescribed limits under section 224 (1-B) of the Companies Act, 1956. Members are requested to re-appoint them at the Annual General Meeting.

COST ACCOUNTING RECORDS

The Company has maintained cost accounting records in respect of manufacturing of Partially Oriented Yarn (POY), Fully Draw Yarn (FDY), Polypropylene Multifilament Yarn (PPMFY) & Pet Chips as required. The company has appointed Mr. Vipin M. Patel, Cost Accountant for conducting the audit of such records for the financial year 2013-14.

PERSONNEL

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the company. As required by the provisions of Section 217 (2A) of the Companies Act, 1956 (corresponding to section 134 of the Companies Act, 2013) read with Companies (Appointment & remuneration) rules 2014, no employee is drawing remuneration in excess of the prescribed limits. Your company also appreciates that revenue and profit growth cannot take place without the right equality of people. To that effect, your company has undertaken a series of measures that ensures that the most appropriate people are recruited in to the organization.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility is an integral part of the Company''s ethos and policy and it has been pursuing this on a sustained basis. The Company assists schools situated at near by villages by distributing dresses, books among poor students etc. Technical education and training are imparted to the employees through Industrial Training and Workshops. Emphasis was laid on creation of awareness amongst the villagers about the need to protect the environment. CSR activities carried out by the Company have strengthened the relationship with local people. During the year under report your Company constituted CSR Committee and drawn up Company''s CSR policy to plan and implement CSR activities as per provision of Companies Act, 2013

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956 (corresponding to section 124 & 125 of the Companies Act, 2013) an amount of Rs. 12,81,128/- which pertains to the dividend for the year 2006-07, and remained unpaid or unclaimed for a period of 7 years, has been transferred by the Company to the Investor Education & Protection Fund.

INTERNAL CONTROL SYSTEM

The Company''s internal control system includes audit and verification of compliance with defined policies and procedures by Internal Audit Function. The internal auditors independently evaluate the adequacy of internal controls and audit the sample of the transactions in value terms. Independence of the audit is ensured by the direct reporting of internal audit function to the Audit Committee of the Board.

INDUSTRIAL RELATIONS

The Company continued to maintain harmonious and cordial relations with its workers in all its businesses during the year under report. Your company firmly believes that a dedicated work force constitute the primary source of sustainable competitive advantage.

RISK MANAGEMENT

Risk Management is the systematic process of understanding, measuring, controlling and communicating organization''s risk exposures while achieving its objectives. The company''s risk management policy stems from a philosophy of pursuing sustainable growth and creating economic value while calibrating and mitigating risks. The Board of Directors regularly review risks and threats and takes suitable steps to safeguard its interest. The focus shifts from one area to another area depending upon the prevailing situation. During the year under review, highest importance was given to the management of foreign currency exchange rate fluctuation risk.

INSURANCE

All the properties of the Company including buildings, plant and machineries and stocks have been adequately insured.

CASH FLOW ANALYSIS

The Cash Flow Statement for the year under reference in terms of Clause 32 of the Listing Agreement with the stock exchanges forms part of the Annual Report.

FOREIGN EXCHANGE TRANSACTIONS

In order to hedge the company''s exposure to foreign exchange and interest rate, the company enters into forward contracts. The volatility witnessed in the global markets has reiterated the need for robust forex management systems and prudent investment practices. All forex exposures are hedged upon the occurrence of an exposure. In case of liabilities in respect of foreign currency loans obtained for acquisition of fixed assets, the variation in the liabilities arising out of exchange rates at the year end have been capitalized during the year as per Companies (Accounting Standard) Amendment Rules, 2009.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

The company has now set up 66 Kva Sub-Station at its plant and taking supply of power from DGVCL. The company is sourcing power through open access purchase from grid under open access regulation and thereby reducing its power cost substantially in comparison to power generated from Gas. Further this is also being resulted to the company in utilizing stable power supply leading to higher production efficiency.

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 (Corresponding to section 134 of the Companies Act, 2013), read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure "A" forming part of this report.

RESEARCH & DEVELOPMENT

The Company is giving great emphasis to innovation in product and process technology and operational efficiencies. The company has set up a separate fully equipped well designed lab for testing of MEG and PTA and developing better quality of Pet chips and Yarns with different deniers and filaments. It has institutionalized a multiple-stage quality control system at the material handling, operations and finished goods stage. The enhanced quality so developed has been performing well in the domestic as well as in international market. Successful efforts are being made to re-engineer the products & process to reduce cost and optimize material consumption. The product lines of the plant are designed to change product with minimum changeover losses and thus meet customer requirement even for small quantities.

CORPORATE GOVERNANCE

i) The Company has complied with all the mandatory provisions of Clause 49 of the Listing Agreement relating to the Corporate Governance.

ii) Pursuant to Clause 49 of the listing agreement with Stock-Exchanges, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance and a Management Discussion and Analysis Statement forms integral part of this Annual Report.

iii) Your Company is listed with Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

ACKNOWLEDGMENT

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your Directors wish to place on record their deep sense of appreciation for devoted services of the Executives, Staff and workers of the Company for its success.

By order of the Board Directors

Sd/- Place : Surat Shankarlal Somani Date :11th August 2014 Chairman cum Mg.Director


Mar 31, 2013

TO, THE MEMBERS

The Directors have pleasure in presenting the 25th Annual Report and Audited Statement of Accounts for the year ended 31st March, 2013.

The overall performance of the current year was satisfactory due to efficient management of energy and overhead cost, general improvement in operational efficiency and better management of working-capital. We have further strengthen our competitive capabilities to deliver more consistent growth focusing on cost rationalization and consolidation capabilities.

FINANCIAL RESULTS

(Rs. in lacs) (Rs. in lacs) 31-03-13 31-03-12

Gross profit before interest & Depreciation 7067.39 5817.92

Less : Interest 2171.88 1081.19

Depreciation 1989.86 1201.75

Profit before Tax 2905.65 3534.98

Less: Provision for Taxation

CurrentTax 581.34 818.54

MAT Credit (581.35) (521.21)

Deferred Tax 944.70 388.07

Profit after Tax 1960.96 2485.53

Less : Taxation of Previous Year 45.02 73.53

Profit available for appropriation 1915.94 2412.00

Dividend & Dividend Dist. Tax (F.Y 2011-12) 269.82 -

Short Prov. For Dividend & Dividend for previous year (F.Y. 2010-11) - 208.16



OPERATIONS

The company has posted a satisfactory performance for the year under review. The company has produced 91936.934 Tons of Pet Chips / Polyester / Polypropylene Multifilament Yarn and dispatched 86875.80 Tons of Pet Chips/Polyester/Polypropylene MultifilamentYarn.

Income from operation of the company has increased from Rs. 824.48 Crores to Rs. 1159.34 Crores. EBIDTA has been increased from Rs. 58.18 Crores to 70.67 Crores and Net profit after Tax has been decreased from Rs. 24.12 Crores to Rs. 19.16 Crores in comparison to last year.

DIVIDEND

The Companyhasnotdeclaredanydividendforthefinancialyearended2013,dueto ploughing backthe profits to be utilized in the proposed up-gradation of the FDY plant.

EXPANSION & MODERNISATION

During the year under review your company has successfully commissioned Polyester Filament yarn ( POY & FDY) a direct spinning unit through MEG and PTA, thereby total capacity of the spinning has been increased from 53000 TPA to 82800 TPA The commercial production of the same has been commenced since month of May, 2012.

During the current financial year the company has envisaged a plan to increase its spinning capacity of FDY production by upgrading old eight end winders by replacing them with twelve end high speed winders. The total project cost of up gradation is approx Rs. 41.50 Crores and there by total capacity of the FDY production will be increased from 40600 TPAto 51450 TPA.

NEW PROJECT

In the current financial year, the company has successfully commissioned Wastage Recycling Plant with 5400 TPA capacity. Under this plant company is producing chips from polyester wastage yarns. The commercial production of the same has been commenced in the month of June, 2013.

The company has also set up 66 KV Sub- stations at its plant and taking supply of power from DGVCL. The company is sourcing power from open access purchase through grid under open access regulation and thereby reducing its power cost substantially in comparison to power generated from Natural Gas.

OVERSEAS SUBSIDIARYCOMPANY

The company has incorporated a wholly owned subsidiary company in Singapore registered with Registrar of Companies and Business, Singapore. During the financial year under review, the company has not made any investment in its subsidiary company.

EXPORTS

The company has been exploring all the possibilities for exporting its products. During the year under review, your company has exported products worth of Rs. 122.24 Crores in comparison to Rs. 9.08 Crores in the lastyear.

At present company is exporting to South Africa, Bangladesh, Egypt, Saudi Arabia, China, Peru, Argentina, Portugal, Indonesia, Iran, U.S.A& Singapore etc. Exploring export markets has been a key area of focus for the company. Your Company expects more growth in the overall export sales in the current year also.

DEPOSITORYSYSTEM

As members are aware, the company''s shares are compulsorily tradable in the electronic form. As on March 31, 2013 almost 94.17% of the Company''s total paid-up capital representing 5,82,89,738 shares were in dematerialized form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.

FIXED DEPOSITS

The Company has not accepted any deposits during the year under review.

DIRECTORS

Mr. Vinod Kumar Ladia, Director of the Company being retire by rotation does not offer themselves for re-appointment. The Board of Directors recommended the name of Mr. Atma Ram Sarda as a Director of the company. Necessary resolution for theirappointment has been placed inthenoticeforapproval.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure.

(ii) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are "reasonable and prudent so as to give a true and fair view of the state of affairs of the Company atthe end of the financial yearand of the profit or lossof the Companyfortheyearunder review.

(iii) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) That the directors had prepared the annual accounts on a going concern basis.

AUDITORS

M/s. Pradeep Singhi & Associates, Chartered Accountants hold office until the conclusion of the ensuing Annual General Meeting. They have confirmed that their appointment, if made, would be within the prescribed limits under section 224 (1-B)of the Companies Act, 1956. Members are requested to re-appoint them at the Annual General Meeting.

COST ACCOUNTING RECORDS

The Company has maintained cost accounting records in respect of manufacture of Partially Oriented Yarn ( POY ), Fully Draw Yarn ( FDY ), Polypropylene Multifilament Yarn ( PPMFY ), Pet Chips as required. The company has appointed Mr. Vipin M. Patel, Cost Accountant for conducting the audit of such records for the financial year2012-13.

PERSONNEL

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the company. As required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 175 as amended, no employee is drawing remuneration in excess of the prescribed limits. Your company also appreciates that revenue and profit growth cannot take place without the right equality of people. Tothat effect, your company has undertaken a series of measures which ensures that the most appropriate people are recruited in to the organization.

RISK MANAGEMENT

Risk Management is the systematic process of understanding, measuring, controlling and communicating organization''s risk exposures while achieving its objectives. The company''s risk management policy stems from a philosophy of pursuing sustainablegrowth and creating economicvaluewhile calibrating and mitigating risks.The Board of Directors regularly review risks and threats and takes suitable steps to safeguard its interest. The focus shifts from one area to another area depending upon the prevailing situation. During the year under review, highest importance was given to the management of foreign currency exchange rate fluctuation risk.

INSURANCE

All the properties of the Company including buildings, plant and machineries and stocks have been adequately insured.

FOREIGN EXCHANGE TRANSACTIONS

In order to hedge the company''s exposure to foreign exchange and interest rate, the company enters into foiward contracts. The volatility witnessed in the global markets has reiterated the need for robust forex management systems and prudent investment practices. All forex exposures are hedged upon the occurrence of an exposure. In case of liabilities in respect of foreign currency loans obtained for acquisition of fixed assets, the variation in the liabilities arising out of exchange rates at the year end have been capitalized during the year as per Companies (Accounting Standard)Amendment Rules, 2009.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

During the current year, the company has stopped captive generation of power from gas based Genset due to steep rise in the prices of Natural Gas. The company has now set up 66 KV Sub-Station at its plant and taking supply of power from DGVCL. The company is sourcing power through open access purchase from grid under open access regulation and thereby reducing its power cost substantially in comparison to power generated from Natural Gas. Further this is also being resulted to the company in utilizing stable power supply leading to higher production efficiency.

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956, read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure "A" forming part of this report.

RESEARCH & DEVELOPMENT

The Company is giving great emphasis to innovation in product and process technology and operational efficiencies. The company has set up a separate fully equipped well designed lab for testing of MEG and PTA and developing better quality of Pet chips and Yarns with different deniers and filaments. It has institutionalized a multiple-stage quality control system at the material handling, operations and finished goods stage. The enhanced quality so developed has been performing well in the domestic as well as in international market. Successful efforts are being made to re-engineer the products & process to reduce cost and optimize material consumption. The product lines of theplantare designed to change product with minimum changeover losses and thus meetcustomerrequirementevenforsmall quantities.

CONSTITUTION OF AUDIT COMMITTEE

Pursuant to the provisions of Sections 292A of the Companies Act, 1956, the Board of Directors has Audit Committee comprising ofthree directors namely Shri BhagchandChordia.Shri SumeetKumarSomani and Shri Devi Prasad Saboo.

CORPORATEGOVERNANCE

i) The Company has complied with all the mandatory provisions of Clause 49 of the Listing Agreement relating to the Corporate Governance.

ii) Pursuant to Clause 49 of the listing agreement with Stock-Exchanges, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance and a Management Discussion and Analysis Statement are made as a part of the Annual Report.

iii) Your Company is listed with Bombay Stock Exchange Limited and National Stock Exchange Limited.

ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your directors wish to placeon record theirdeep sense of appreciation for devoted services of the Executives, Staff and workersoftheCompanyforitssuccess.



On behalf of the Board of Directors

Place : Surat SHANKARLAL SOMANI

Date :13th AUGUST 2013 Chairman cum Mg. Director


Mar 31, 2012

The Directors have pleasure in presenting the 24th Annual Report and Audited Statement of Accounts for the year ended 31st March, 2012.

In the year under review, we have further strengthen our competitive capabilities to deliver more consistent growth focusing on cost rationalization and consolidation capabilities.

Despite rising interest rates, rupee appreciation, high inflation, volatility in capital flows, your company has been able to earn net-profit of Rs. 2412.00 Lacs due to efficient use of raw materials, energy conservation, overhead cost cutting and better management of working-capital.

FINANCIAL RESULTS

31-03-12 31-03-11

Gross profit before interest & Depreciation 5817.92 6139.39

Less: Interest 1081.19 832.14

Depreciation 1201.75 1177.60

Profit before Tax 3534.98 4129.65

Less: Provision for Taxation

Current Tax 706.17 818.54

MAT Credit 167.29 (521.21)

Deferred Tax 175.99 388.07

Profit after Tax 2485.53 3444.25

Less : Taxation of Previous Year 73.53 28.51

Profit available for appropriation 2412.00 3415.74

Divided on Pref. Share and Dividend Tax - 69.96

Equity Dividend & Dividend Dist. Tax - 466.38

Short Prov. For Dividend for previous year 2412.00 4420.51

Balance transfer to Balance sheet

OPERATIONS

The company has posted a satisfactory performance for the year under review. The company has produced 68408.420 Tons of Pet Chips / Polyester / Polypropylene Multifilament Yarn and dispatched 67630.95 Tons of Pet Chips / Polyester / P.P. / Poly yarns.

Income from operation of the company has increased from Rs. 820.40 Crores to Rs. 824.48 Crores. EBIDTA has been marginally decreased from Rs. 61.39 Crores to 58.18 Crores and Net profit after Tax has been decreased from Rs. 34.16 Crores to Rs. 24.12 Crores in comparison to last year.

DIVIDEND

Your directors have pleasure to recommend Dividend of 4% i.e. Rs. 0.40 per share on face value of Rs. 10/- on the paid up equity share capital of the company for the year ended 31st March, 2012. The dividend will be free of tax in the hands of recipients.

EXPANSION & MODERNISATION

During the current financial year, your company has successfully commissioned Polyester Filament yarn (POY & FDY) a direct spinning unit through MEG and PTA, thereby total capacity of the spinning has been increased from 53000 TPA to 100000 TPA. The company has also successfully commissioned 8.6 MW Gas based Genset Power Plant, thereby total captive power generation capacity has increased from 8.6 MW to 17 MW. The commercial production of the same has been commenced in the month of May, 2012.

EXPORTS

The company has been exploring all the possibilities for exporting its products. During the year under review, your company has exported Pet Chips and Polyester Chips products of Rs. 908.63 Lacs.

At present company is exporting Pet Chips and Polyester yarns to South Africa, Bangladesh, Egypt, Saudi Arabia, China, Peru, Argentina, Portugal, Indonesia, Iran, U.S.A & Singapore etc. Exploring export markets has been a key area of focus for the company. Your Company expects reasonable growth in the overall export sales in the current year.

QIP PLACEMENTS

During the year 2011-12, your company has made equity offering to Qualified Institutional Buyers ("QIBs") and allotted 1,82,94,578 Nos. of Equity shares of face value of Rs. 10/- each at a price of Rs. 30.25 (including premium of Rs.20.25 per equity share) to part finance its Rs. 150.00 Crores expansion project for enhancing its spinning capacity.

DEPOSITORY SYSTEM

As members are aware, the company's shares are compulsorily tradable in the electronic form. As on March 31, 2012 almost 94.09% of the Company's total paid-up capital representing 5,82,89,738 shares were in dematerialized form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories. '

FIXED DEPOSITS

The Company has not accepted any deposits during the year.

DIRECTORS

Mr. Devi Prasad Saboo retires by rotation and being eligible offer himself for re-appointment.

Mr. Rajkumar Somani, Managing Director and Mr. Mangilal Lahoti, Director have resigned from the Board. Mr. Shankarlal Somani, Chairman of the Board appointed as Chairman cum Managing Director of the Company, subject to the approval of the shareholders in the Annual General Meeting (AGM).

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure.

(ii) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are "reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

(iii) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

(iv) That the directors had prepared the annual accounts on a going concern basis.

AUDITORS

M/s. Pradeep Singhi & Associates, Chartered Accountants hold office until the conclusion of the ensuing Annual General Meeting. They have confirmed that their appointment, if made, would be within the prescribed limits under section 224 (1-B) of the Companies Act, 1956. Members are requested to re-appoint them at the Annual General Meeting.

COST ACCOUNTING RECORDS

The Company has maintained cost accounting records in respect of manufacture of Partially Oriented Yarn, Polypropylene Multifilament Yarn, Pet chips as required. The company has appointed Mr. Vipin M. Patel, Cost Accountant for conducting the audit of such records for the financial year 2011-12.

PERSONNEL

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the company. As required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 175 as amended, no employee is drawing remuneration in excess of the prescribed limits. Your company also appreciates that revenue and profit growth cannot take place without the right equality of people. To that effect, your company has undertaken a series of measures which ensures that the most appropriate people are recruited in to the organization.

RISK MANAGEMENT

Risk Management is the systematic process of understanding, measuring, controlling and communicating organization's risk exposures while achieving its objectives. The company's risk management policy stems from a philosophy of pursuing sustainable growth and creating economic value while calibrating and mitigating risks. The Board of Directors regularly review risks and threats and takes suitable steps to safeguard its interest. The focus shifts from one area to another area depending upon the prevailing situation. During the year under review, highest importance was given to the management of foreign currency exchange rate fluctuation risk.

INSURANCE

All the properties of the Company including buildings, plant and machineries and stocks have been adequately insured.

FOREIGN EXCHANGE TRANSACTIONS

In order to hedge the company's exposure to foreign exchange and interest rate, the company enters into forward contracts. The volatility witnessed in the global markets has reiterated the need for robust forex management systems and prudent investment practices. All forex exposures are hedged upon the occurrence of an exposure. In case of liabilities in respect of foreign currency loans obtained for acquisition of fixed assets, the variation in the liabilities arising out of exchange rates at the year end have been capitalized during the year as per Companies ( Accounting Standard ) Amendment Rules, 2009.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

During the year 2011-12, the company has successfully commissioned 8.6 MW Gas based captive power plant and thereby increasing its total captive capacity to 17 MW, as a result of which substantial saving in energy costs have been accruing . Further this will also resulted to the company in utilizing stable power supply leading to higher production efficiency.

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956, read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure "A" forming part of this report.

RESEARCH & DEVELOPMENT

The Company is giving great emphasis to innovation in product and process technology and operational efficiencies. For its recently commissioned Continuous Polymerization Plant (CP) and also for POY and FDY, the company has set up a separate fully equipped well designed lab for testing of MEG and PTA and developing better quality of Pet chips and Yarns with different deniers and filaments. It has institutionalized a multiple-stage quality control system at the material handling, operations and finished goods stage. The enhanced quality so developed has been performing well in the domestic as well as in international market. Successful efforts are being made to re-engineer the products & process to reduce cost and optimize material consumption. The product lines of the plant are designed to change product with minimum changeover losses and thus meet customer requirement even for small quantities.

CONSTITUTION OF AUDIT COMMITTEE

Pursuant to the provisions of Sections 292A of the Companies Act, 1956, the Board of Directors has Audit Committee comprising of three directors namely Shri Bhagchand Chordia, Shri Sumeet Kumar Somani and Shri Devi Prasad Saboo.

CORPORATE GOVERNANCE

(i) The Company has complied with all the mandatory provisions of Clause 49 of the Listing Agreement relating to the Corporate Governance.

(ii) Pursuant to Clause 49 of the listing agreement with Stock-Exchanges, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance and a Management Discussion and Analysis Statement are made as a part of the Annual Report.

(iii) Your Company is listed with Bombay Stock Exchange Limited and National Stock Exchange Limited.

ACKNOWLEDGMENT

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your directors wish to place on record their deep sense of appreciation for devoted services of the Executives, Staff and workers of the Company for its success.

On behalf of the Board of Directors

Place : Surat SHANKARLAL SOMANI

Date : 21st AUGUST 2012 Chairman


Mar 31, 2011

To The Members,

The Directors have pleasure in presenting the 23rd Annual Report and Audited Statement of Accounts for the year ended 31st March, 2011. Despite rising interest rates, rupee appreciation, high inflation, volatility in capital flows, we felt consumer and business confidence is very strong and are reasonably balanced across the country. The confidence is supported by fast growing disposable income and corporate earnings. Manufacturing is expected to be a major driver of growth over the next few years. Your company has achieved Net profit of Rs. 34.44 Crores due to efficient usage of Raw material, Energy conservation, Quality of its finished products, Overhead cost cutting and Efficient management of working capital.

The efforts made by your Company in improving efficiencies in all areas of operations including working capital management resulting in lower interest cost and foreign currency risk management have contributed greatly towards the improved performance. We trust you will be quite satisfied with the performance of your Company.

FINANCIAL RESULTS (Rs. in Lacs) (Rs. in Lacs)

Gross profit before Interest & Depreciation 6130.60 3100.11

Less : Interest 832.14 778.84

Depreciation 1168.81 643.20

Profit before Tax 4129.65 1678.07

Less : Provision for Taxation

Current Tax 818.54 159.28

MAT Credit (521.21) 0.00

Deferred Tax 388.07 92.41

Profit after Tax 3444.25 1105.81

Less : Taxation of Previous Year 28.51 20.95

Add : Balance Brought Forward 1541.11 927.63

Profit available for appropriation 4956.85 2012.49

Dividend on Pref. Share and Dividend Tax 69.96 3.46

Equity Dividend & Dividend Dist. Tax 466.38 467.92

Balance Transfer to General Reserve 0.00 0.00

Balance transfer to Balance sheet 4420.51 1541.11

OPERATIONS

The company has successfully commissioned expansion of 23500 TPA POY Plant and 21000 TPA FDY Plant in the month of March,2010 and the effect of operation of this plant has been satisfactory reflected in the financial year under review.

The company has produced 77267.696 Tons of Pet Chips / Polyester / Polypropylene Multifilament Yarn and dispatched 77565.130 Tons of Pet Chips / Polyester / P.P. / Poly Yarns.

Income from operation of the company has increased by 120 % from Rs. 376.78 Crores to Rs. 828.11 Crores. EBIDTA has increased from Rs. 31.00 Crores to Rs. 61.31 Crores and Net profit after tax has increased by 215% from Rs. 10.85 Crores to Rs. 34.16 Crores in comparison to last year.

DIVIDEND

Your directors have pleasure to recommend Dividend of 10% i.e Rs. 1/- per share on face value of Rs. 10/- on the paid up equity share capital of the company for the year ended 31st March, 2011. As per current paid-up capital, the total dividend and divided tax thereon would absorb an apx. sum of Rs. 466.38 Lacs. The dividend will be free of tax in the hands of recipients.

EXPORTS

The company has been exploring all the possibilities for exporting its products. During the year under review, your company has exported Pet Chips and Polyester Chips products of Rs. 2553.50 Lacs as compared to Rs. 1139.77 Lacs in the last year an increase of 124% over the previous year.

At present company is exporting Pet Chips and Polyester yarns to South Africa, Bangladesh, Egypt, Saudi Arabia, China, Peru, Argentina, Portugal, Indonesia, Iran, U.S.A & Singapore etc. Exploring export markets has been a key area of focus for the company. Your Company expects reasonable growth in the overall export sales in the current year.

DEPOSITORY SYSTEM

As members are aware, the company's shares are compulsorily tradable in electronic form. As on March 31, 2011 almost 91.15% of the Company's total paid-up capital representing 3,64,55,718 shares were in dematerialized form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.

NEW PROJECTS

In the year 2009-10, The company has successfully commissioned 100000 TPA Continuous Polymerization (C.P) Plant and 23500 TPA of POY Plant and 21000 TPA of FDY Plant during the year under review and the plants are running satisfactorily.

During the year, the Company has chalked out Rs. 530 Crores expansion plan for enhancing its manufacturing capacity of both POY and FDY and Pet Chips in two phases.

In the first phase of expansion production capacity of POY and FDY will be increased from 53000 TPA to 100000 TPA and setting up another 8 MW Gas based Genset Captive Power Plant with project cost of Rs.150.00 Crores. This expansion will utilize balance capacity of Polycondensation Plant as captive consumption by manufacturing POY/FDY directly from MEG & PTA instead of Producing PET Chips. This project will enhance the scale of operation and improve the cost competitiveness of company's product. After completion of this expansion total turnover of the company will be increased by Rs. 100 Crores and EBIDTA by Rs. 40 Crores. This project is expected to be on-stream by Apil,2012.

In the second phase of expansion new green field project of 200000 TPA Continuous Poly Condensation ( CP ) Plant will be setup to manufacture Bright FDY Yarns, POY Yarns, Yarn grade and Bottle grade Pet Chips and setting up another 18 MW Gas based Genset Power Project with total project cost of Rs. 400.00 Crores.

GAS BASED POWER PLANT

The Company has successfully commissioned 6 MW Gas based Genset Captive Power Plant in the year 2009- 10, thereby enhancing capacity of captive power generation by 8.5 MW at the company's plant at Karanj, Surat.

Being new expansion projects in line, the company is also in the process of setting up another 26 MW Gas based Genset captive power plant nearby its expansion project.

The Gas based Genset Power Plant is eligible to be registered as CDM projects and the existing 6 MW Gas based Plant is under validation process for getting registered with UN to be eligible to get carbon credits.

FIXED DEPOSITS

The Company has not accepted any deposits during the year.

DIRECTORS

Mr. B. C. Chordia and Mr. Vinod Kumar Ladia retire by rotation and being eligible offer themselves for re-appointment.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Director's Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure.

(ii) That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

(iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) That the Directors had prepared the annual accounts on a going concern basis.

AUDITORS

M/s. Pradeep Singhi & Associates, Chartered Accountants hold office until the conclusion of the ensuing Annual General Meeting. They have confirmed that their appointment, if made, would be within the prescribed limits under section 224 (1-B) of the Companies Act, 1956. Members are requested to re-appoint them at the Annual General Meeting.

COST ACCOUNTING RECORDS

The Company has maintained cost accounting records in respect of manufacture of Partially Oriented Yarn, Polypropylene Multifilament Yarn, Pet chips as required. The company has appointed Mr. V. Srinivasan, Cost- Accountant for conducting the audit of such records for the financial year 2010-11.

PERSONNEL

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the company. As required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 175 as amended, no employee is drawing remuneration in excess of the prescribed limits. Your company also appreciates that revenue and profit growth cannot take place without the right equality of people. To that effect, your company has undertaken a series of measures that ensures that the most appropriate people are recruited in to the organization.

RISK MANAGEMENT

Risk Management is the systematic process of understanding, measuring, controlling and communicating organization's risk exposures while achieving its objectives. The company's risk management policy stems from a philosophy of pursuing sustainable growth and creating economic value while calibrating and mitigating risks. The Board of Directors regularly review risks and threats and takes suitable steps to safeguard its interest. The focus shifts from one area to another area depending upon the prevailing situation. During the year under review, highest importance was given to the management of Foreign currency exchange rate fluctuation risk.

INSURANCE

All the properties of the Company including buildings, plant and machineries & stocks have been adequately insured.

FOREIGN EXCHANGE TRANSACTIONS

In order to hedge the company's exposure to foreign exchange and interest rate, the company enters into forward contracts. The volatility witnessed in the global markets has reiterated the need for robust forex management systems and prudent investment practices. All forex exposures are hedged immediately upon the occurrence of an exposure. In case of liabilities in respect of foreign currency loans obtained for acquisition of fixed assets, the variation in the liabilities arising out of exchange rates at the year end have been capitalized during the year as per Companies ( Accounting Standard ) Amendment Rules, 2009.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

During the year 2009-10, the company has successfully commissioned 6 MW Gas based captive power plant and thereby increasing its total captive capacity to 8.5 MW, as a result of which substantial saving in energy costs have been accruing. Further this will also resulted to the company in utilizing stable power supply leading to higher production efficiency. Under the current expansion program to meet the power requirements, the company is also setting up another 8 MW Gas based captive Power Plant.

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956, read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure "A" forming part of this report.

RESEARCH & DEVELOPMENT

The Company is giving great emphasis to innovation in product and process technology and operational efficiencies. For its newly commissioned Continuous Polymerization Plant (CP) and also for POY and FDY, the company has set up separate fully equipped well designed lab for testing of MEG and PTA and developing better quality of Pet chips and Yarns with different deniers and filaments . The enhanced quality so developed has been performing well in the domestic as well as in international market. Successful efforts are being made to re-engineer the products & process to reduce cost and optimize material consumption. The product lines of the plant are designed to change product with minimum changeover losses and thus meet customer requirement even for small quantities.

CONSTITUTION OF AUDIT COMMITTEE

Pursuant to the provisions of Sections 292A of the Companies Act, 1956, the Board of Directors has Audit Committee comprising of three directors namely Shri Bhagchand Chordia, Shri Sumeet Kumar Somani and Shri Mangilal Lahoti.

CORPORATE GOVERNANCE

i) The Company has complied with all the mandatory provisions of Clause 49 of the Listing Agreement relating to the Corporate Governance.

ii) Pursuant to Clause 49 of the Listing agreement with Exchanges, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance and a Management Discussion and Analysis Statement are made as a part of the Annual Report.

iii) Your Company is Listed at Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your directors wish to place on record their deep sense of appreciation for devoted services of the Executives, Staff and Workers of the Company for its success.

On behalf of the Board of Directors

Place : Surat SHANKARLAL SOMANI

Date : 15-07-2011 Chairman


Mar 31, 2010

The Directors have pleasure in presenting the 22nd Annual Report and Audited Statements of Accounts for the year ended 31st March, 2010. The year was an eventful year for Indian economy. Raw Material Prices i.e MEG , PTA have witnessed high fluctuation in their price trend in the last financial year. Price of agricultural products, minerals and metals, oil commodities and food stuffs were headed north and after a long decade economy witnessing double digit inflation.

Despite these your Company has been able to earn net profit of Rs. 11.06 Crores due to efficient usage of Raw material, Energy conservation, Quality of its finished products, Overhead Cost Cutting and better management of Working Capital.

The efforts made by by your Company in improving efficiencies in all areas of operations including Working capital management resulting in lower interest cost and foreign currency risk management, have contributed greatly towards the improved performance. We trust you will be quite satisfied with the performance of your Company.

(Rs. in lacs) (Rs.in lacs)

FINANCIAL RESULTS 31-03-10 31-03-09

Gross profit before interest & Depreciation 3100.11 1446.68

Less: Interest 778.84 487.57

Depreciation 643.20 325.86

Profit before Tax 1678.07 633.25 Less : Provision for Taxation

Current Tax - 159.28

Deferred Tax 572.26 92.41

Profit after Tax 1105.81 381.56

Less : Taxation of Previous Year 20.95 1.84

Add : Balance Brought Forward 927.63 379.72

Profit available for appropriation 2012.49 641.23

Prov. for Divided and Dividend tax 471.38 0.00

Balance transfer to General Reserve 0.00 0.00

Balance transfer to Balance sheet 1541.11 1020.95

DIVIDEND

Your Directors have pleasure to recommend Dividend of 10% i.e. Rs. 1/- per share on the paid up equity share capital of the company for the year ended 31st March, 2010 . As per current paid-up capital, the total dividend and divided tax thereon would absorb an apx. sum of Rs. 471.38 Lacs. The dividend will be free of tax in the hands of recipients.

OPERATIONS

During the year under review, the company has successfully commissioned 100000 TPA Continuous Polymerization ( C.P. ) Plant and commercial production of the same has been started since 1st July, 2009

Another expansion of 23500 TPA POY Plant and 21000 TPA FDY Plant has been successfully commissioned in the month of March, 2010 and the full effect of operation of this plant will be reflected in the next financial year.

The company has posted a satisfactory performance for the year under review. The company has produced 39010.768 Tons of Pet Chips / Polyester / Polypropylene Multifilament Yarn and dispatched 38986.823 Tons of Pet Chips / Polyester / P.P. / Poly yarns. The Company has manufactured 13.66 Lacs Mtrs of Polyester Fabrics and dispatched 14.24 Lacs Mtrs of Polyester Fabrics. The company has also produced 162.680 Tons of Menthol Products.

Income from Operation of the Company has increased by 138 % from Rs. 158.26 Crores to Rs. 376.78 Crores and Net Profit After Tax has increased by 190% from Rs. 3.82 Crores to Rs. 11.06 Crores in comparison to last year.

EXPORTS

The company has been exploring all the possibilities for exporting its products. During the year under review, your Company has exported Polyester Yarns, Pet Chips and Menthol products of Rs. 1139.77 Lacs as compared to Rs. 1119.61 Lacs in the last year.

At present company is exporting Pet Chips and Polyester yarns to South Africa, Bangladesh, Egypt, Saudi Arabia, China, Peru, Argentina, Portugal, Indonesia, Iran, U.S.A & Singapore etc. Exploring exports market has been a key area of focus for the company. Your Company expects reasonable growth in the overall export sales in the current year.

DEPOSITORY SYSTEM

As members are aware, the companys shares are compulsorily tradable in electronic form. As on March 31, 2010, almost 90.83% of the Companys total paid-up capital representing 3,63,26,108 shares were in dematerialized form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.

NEW PROJECTS

The company has successfully commissioned 100000 TPA Continuous Polymerization ( C.P. ) Plant and 23500 TPA of POY Plant and 21000 TPA of FDY Plant during the year under review and the plants are running satisfactorily.

The Company has chalkout Rs. 530 Crores expansion plan for enhancing its manufacturing capacity of both POY and FDY and Pet Chips in two phases.

In the first phase of expansion production capacity of POY and FDY will be increased from 53000 TPA to 100000 TPA and setting up another 8 MW Gas based Genset Captive Power Plant with project cost of Rs.130.00 Crores. This expansion will utilize balance capacity of Polycondensation Plant as captive consumption by manufacturing POY/FDY directly from MEG & PTA instead of Producing PET Chips. This project will enhance the scale of operation and improve the cost competitiveness of companys product. After completion of this expansion total turnover of the company will be increased by Rs. 100 Crores and EBIDTA by Rs. 40 Crores.

In the second phase of expansion new green field project of 200000 TPA Continuous Poly Condensation ( CP ) Plant will be setup to manufacture Bright FDY Yarns, POY Yarns, Yarn grade and Bottle grade Pet Chips and setting up another 26 MW Gas based Genset Power Project with total project cost of Rs. 400.00 Croes. After completion of this project , the company will achieve record turnover of Rs. 2500.00 Crores mark.

This expansion will be party financed by ECB/FCTL/FCCB/TERM Loans and balance will be through internal accruals and Issue of Equity Shares by way of FPO/Rights/ QIP/Preferential Allotment.

GAS BASED POWER PLANT

The Company has successfully commissioned 6 MW Gas based Genset Captive Power Plant thereby enhancing capacity of captive power generation by 8.5 MW at the companys plant at Karanj, Surat.

Being new expansion projects in line , the company is also in the process of setting up another 26 MW Gas based Genset captive power Plant nearby its expansion project.

The Gas based Genset Power Plant is eligible to be registered as CDM projects and the project is under validation process for getting registered with UN to get carbon credits..

SUBSIDIARY COMPANIES

The company had a only subsidiary named Somani Industries (Nepal) Pvt. Ltd. which has been wind up and the loss of Rs. 33.28 Lacs in investment in the subsidiary company has been accounted for during the year under review.

FIXED DEPOSITS

The Company has not accepted any deposits during the year.

DIRECTORS

Mr. Devi Prasad Saboo and Mr. Mangilal Lahoti retire by rotation and being eligible offer themselves for re- appointment.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure.

(ii) That the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

(iii) That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) That the directors had prepared the annual accounts on a going concern basis.

AUDITORS

M/s. Pradeep Singhi & Associates, Chartered Accountants hold office until the conclusion of the ensuing Annual General Meeting. They have confirmed that their appointment, if made, would be within the prescribed limits under section 224 (1-B) of the Companies Act, 1956. Members are requested to re-appoint them at the Annual General Meeting.

COST ACCOUNTING RECORDS :

The Company has maintained cost accounting records in respect of manufacture of Partially Oriented Yarn, Polypropylene Multifilament Yarn, Pet chips and Menthol as required. The company has appointed Mr. V. Srinivasan , Cost Accountant for conducting the audit of such records for the financial year 2009-10.

PERSONNEL

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the company. As required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 175 as amended, no employee is drawing remuneration in excess of the prescribed limits.

RISK MANAGEMENT

Risk Management is the systematic process of understanding, measuring, controlling and communicating organizations risk exposures while achieving its objectives. The Board of Directors regularly review risks and threats and takes suitable steps to safeguard its interest. The risk management policy is periodically examined and updated. The focus shifts from one area to another area depending upon the prevailing situation. During the year under review, highest importance was given to the management of foreign currency exchange rate fluctuation risk.

INSURANCE

All the properties of the Company including buildings, plant and machinery and stocks have been adequately insured.

FOREIGN EXCHANGE TRANSACTIONS:

In order to hedge the companys exposure to foreign exchange and interest rate, the company entered into forward contracts. In case of liabilities in respect of foreign currency loans obtained for acquisition of fixed assets, the variation in the liabilities arising out of exchange rates at the year end have been capitalized during the year as per Companies ( Accounting Standard ) Amendment Rules, 2009.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

During the year the company has successfully commissioned 6 MW Gas based captive power plant and thereby increasing its total captive capacity to 8.5 MW, as a result of which substantial saving in energy costs have been accruing. Further this will also resulted to the company in utilizing stable power supply leading to higher production efficiency.

Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956, read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure “A” forming part of this report.

RESEARCH & DEVELOPMENT

The Company is giving great emphasis to innovation in product and process technology and operational efficiencies. For its newly commissioned Continuous Polymerization Plant ( CP ), the company has set up a fully equipped well designed lab for testing of MEG and PTA and developing better quality of Pet chips and yarns with different deniers and filaments . The enhanced quality so developed will perform well in the domestic as well as in international market. Successful efforts are being made to re-engineer the products & process to reduce cost and optimize material consumption.

The product lines of the plant are designed to change product with minimum changeover losses and thus meet customer requirement even for small quantities. Further with commissioning of expansion project of POY and FDY, we will be able to produce POY of varied denier range fine to coarse.

CONSTITUTION OF AUDIT COMMITTEE

Pursuant to the provisions of Sections 292A of the Companies Act, 1956, the Board of Directors has Audit Committee comprising of three directors namely Shri Bhagchand Chordia, Shri Mangilal Lahoti and Shri Devi Prasad Saboo.

CORPORATE GOVERNANCE

i) The Company has complied with all the mandatory provisions of Clause 49 of the Listing Agreement relating to

the Corporate Governance.

ii) Pursuant to Clause 49 of the listing agreement with Bombay Stock Exchange Limited, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance and a Management Discussion and Analysis Statement are made as a part of the Annual Report.

iii) Your Company is listed with Bombay Stock Exchange Limited.

ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your directors wish to place on record their deep sense of appreciation for devoted services of the Executives, Staff and workers of the Company for its success.

On behalf of the Board of Directors

SHANKARLAL SOMANI Chairman

Place : Surat Date : 09-06-2010

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