Directors Report of Polygenta Technologies Ltd.

Mar 31, 2016

DIRECTORS’ REPORT

To,

The Members of

Polygenta Technologies Limited,

The Directors present to you the Thirty Fourth Annual Report on the business and operations of Polygenta Technologies Limited (the "Company”) and Audited Financial Statements for the financial year ended 31st March 2016.

1. FINANCIAL RESULTS

Particulars	Year Ended	Year Ended
	31stMarch 2016	31s March 2015
(Rs, in Millions)		(Rs, in Millions)
Revenue from Operations	482.9	556.7
Profit /(Loss) before
Depreciation and Interest	(351.2)	(398.7)
Depreciation	156.2	155.1
Borrowing Cost	115.5	65.1
Profit / (Loss) before
Exceptional Items	(622.9)	(618.9)
Exceptional Items	35.6	(24.0)
Profit / (Loss) before tax	(587.4)	(642.9)
Provision for current tax
reversal	-	7.7
Profit / (Loss) after tax	(587.4)	(635.2)
Balance Loss b/f from
previous year	(2521.3)	(1881.3)
Additional Depreciation
as per Companies Act, 2013	-	(4.8)
Balance of Loss to be
carried to Balance Sheet	(3108.7)	(2,521.3)

STATE OF COMPANY AFFAIRS

During the year, the Company’s EBITDA has improved as mentioned above under Financial Results and further analysed hereunder:

Particulars	Year Ended	Year Ended
	31stMarch 2016	31stMarch 2015
	Rs,in Millions)	(Rs, in Millions)
Revenue from Operations	482.9	556.7
Profit /(Loss) before
Depreciation and Interest
and Foreign Exchange
Gain / Loss	(297.8)	(398.3)
Foreign Exchange
Gain / (Loss)	(53.4)	(0.4)
Profit /(Loss) before
Depreciation and Interest	(351.2)	(398.7)

During the financial year 2015-16, product quality further improved resulting in increase in Brand sales to 1667MT as against 627 MT in the previous year. A breakthrough was achieved in the recycled yarn being used in the apparel segment the benefit of which, we will reap in the current financial year 2016

17.During the year under review, your Company earned export revenues from PFY sales aggregating ''111.0 million (previous year ''36.3 million).

Health, Safety and Environment (“HSE”) and Implementation of Key Process

The Company accords significant importance to Health, Safety and Environment and related issues are taken up on priority basis. The Company ensures compliance of all the statutory regulations related to Health, Safety and Environment.

Safety week is celebrated at the Nashik site with enthusiasm and involvement of employees. Various competitions such as Safe & Clean Department Competition, Best out of waste, Safety poster competition, Extempore, Safety Role Play were organized. To create the awareness on safety, Blood donation camp & seminar on Behavioral safety was organized. Safety Film was also shown to the employees to be 100% safe while working.

The Company believes in environment protection and maintaining ecological balances. All discharges are closely monitored and are well within the statutory norms during the year under review.

The Company adheres to the standards for air emissions, wastewater effluent treatment, and noise pollution as prescribed by Maharashtra Pollution Control Board.

2. DIVIDEND

Due to its losses, the Company is unable to declare a dividend for the financial year ended 31st March 2016.

3. FINANCIAL REVIEW:

- Polygenta’s lead-promoter and majority shareholder, PerPETual Global Technologies Limited ("PGTL”) continued its extraordinary support by providing funds in the form of ECB Loan as required by Polygenta. As on 31st March 2016, the Company had drawn from PGTLRs,1264.8 million (includesRs,352.7 million drawn during FY 2015-16) under the ECB loan facility.

- During the year, 1,325,000 Compulsory Convertible Preference Shares ("CCPS”) allotted to VenturEast Life Fund III on 30th September 2014 were converted into equal number of equity shares on 29th March 2016.

- On 24th February 2015, 10,155,893 CCPS were allotted to its lead-promoter PGTL. These CCPS are convertible into an equal number of equity shares after the allottee gives a two months’ notice. After 18 months following allotment, if no such notice has been issued, the CCPS will be compulsorily converted into equity shares. Upon conversion of all of these CCPS, the equity share capital will increase by 7% fromRs,146.1 million to ''156.2 million.

4. DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

Your Company has put in place adequate internal financial controls with reference to the financial statements and has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 2013, to the extent applicable.

During the year under review, an Independent Firm of Chartered Accountants have carried out a review of Internal financial Controls and have certified that there are adequate internal financial controls over financial reporting which are operating effectively as on 31st March 2016.

5. MATERIAL EVENTS OCCURRING AFTER FINANCIAL STATEMENTS DATE

- Subsequent to the Year end, the Shareholders have approved the transfer of ECB loans received from Swedfund and Finn fund amounting to Euro 7.5 million each along with interest thereon to PGTL, the lead-promoter and major shareholder of the Company on the same terms and conditions. The Company is in the process of obtaining necessary regulatory approval for this transfer.

- Subsequent to the Year end, the Shareholders have also authorized the Board of Directors to procure further ECB of amount equivalent up to USD 5 Million from PGTL. The Company has since received the permission from RBI/Authorized dealer.

- Until Year Ended 31st March 2015, the Company was disclosing contingent liability ofRs,102.6 million towards income tax demand for penalty in respect of Assessment Years 2003

04, 2004-05 and 2005-06. The Board is pleased to inform you that subsequent to the year ended 31st March 2016, the Income Tax Appellate Tribunal (ITAT) has decided the matter in favor of Polygenta. Thus, there is no contingent liability in this regard as on 31st March 2016 and a refund of 31.8 million with interest thereon is due from the Income Tax Department towards the amount deposited against the penalty demand. Necessary application to Income tax department in this regard has been made.

6. DISCLOSURE OF PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 are set out in a separate statement attached hereto and forming part of the report. (Annexure ‘I’)

7. DIRECTORS AND KEY MANAGERIAL PERSONS

Mr. Marc Lopresto, Non - Executive & Non -Independent Director retires by rotation and, being eligible, offers himself for reappointment.

During the year pursuant to Section 149 of the Companies, 2013 Mr. Ghanshyam Karkera was appointed as an Independent Director to the Board of the Company with effect from 6th November 2015. His appointment is for a period of five years with effect from 6th November 2015.

During the year Mr. Rakesh Tanna was appointed as CFO of the Company with effect from 28th May 2015. Subsequent to the year end, he resigned as CFO of the Company and was relieved with effect from 18th June 2016.

8. DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS

The Company has received declarations from both the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013, read with the Schedules and rules issued there under.

9. COMPANY’S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Nomination and Remuneration (N&R) Committee has formulated a detailed Nomination Remuneration policy which, inter alia, deals with the manner of selection of Directors and remuneration including criteria for determining qualifications, positive attributes, independence of directors and other matters provided under section 178(3) of the

Companies Act,2013. The highlights of the Policy are given as Annexure ‘II’ forming part of this Report.

10. BOARD TRAINING AND INDUCTION

At the time of appointing a Director, a formal letter of appointment is given to the Director, which inter alia, explains the role, function, duties and responsibilities expected of the Director.

The Directors are also appraised about the various compliances under Companies Act, 2013 and Code of conduct of independent directors as per the Companies Act, 2013 and a confirmation is taken from them for compliance therewith.

By way of introduction to the Company, the Directors are presented the last three years Annual Report. Further, with a view to familiarize the new Directors with the Company’s operations, when the business plan presentation is made to the Board, the familiarization is also suitably combined therewith.

The CEO also has one-to-one discussions with the newly appointed directors and they attend an orientation at the company’s factory. The above initiatives help the Directors to understand the Company, its business, the regulatory framework in which the company operates and equips the Directors to fulfill effectively their role as Directors of the Company.

11. DIRECTORS'' RESPONSIBILITY STATEMENT / CODEOFCONDUCT

The Directors Responsibility Statement referred to in clause (c) of sub -section (3) of Section 134 of the Companies Act, 2013 is given in Annexure ‘III’ forming part of this Report. The Code of Conduct of the Company is affirmed by the Directors and Senior Management and the receipt of the same is affirmed by the CEO in Annexure ‘III’ forming part of this Report.

12. NUMBER OF MEETING OF THE BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors have met five times during the year ended 31st March, 2016. The composition of the Audit Committee of Directors, Nomination and Remuneration Committee of Directors, and Stakeholders Relationship Committee of Directors, number of meetings held of each committee during the financial year 2015-16 and meetings attended by each member of the committee as required under Companies Act, 2013 are provided in Corporate Governance Report forming a part of the report in ANNEXURE VI. The recommendations by the Audit Committee as and when made to the Board have been accepted by the Board.

13. DIRECTORS EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, subsequent to the year end, the Board has carried out an annual evaluation of its own directors individually (including Chairperson) other than Nominee Directors of Lender / Investor. The performance of the Individual Directors was evaluated by the Board seeking input from all the other Directors. The Criteria for performance evaluation of the individual directors included aspects on contribution to the Board and Committee like leadership and stewardship abilities, contribution to clearly define corporate objectives and plans, meaningful and constructive contribution and inputs for effective meeting etc.

The Board is in the process of carrying out the annual evaluation of the working of its committees and its own performance.

14. PARTICULARS OF LOANS AND GUARANTEES OR INVESTMENTS

Because there were no loans, guarantees, or investments given by the Company during the year, the Company is not required to comply with the provisions of section 186 of the Companies Act,

2013.

15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. A list of the transactions is referred to in Note No. 30 to Financial Statements.

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013, including certain arm''s length transactions under the third proviso thereto, is disclosed in Form No. AOC-2 which is attached as ‘Annexure IV’ forming part of this report.

The Company’s Related Party Transaction Policy, as approved by the Board, is uploaded on the Company’s website at http://www.polygenta. com/company_policies.html

16. RISK MANAGEMENT POLICY

The Company has developed a Risk Management Policy. It seeks to identify risks inherent in the Company’s business operations and provide guidelines to define, measure, report, control and mitigate the identified risks. The objective of the Company’s Risk Management Policy is to create and protect shareholder value by prudently minimizing threats or losses, and identifying and maximizing opportunities. The policy endeavors to provide a practical enterprise-wide risk management framework that fosters employees integrating risk management into their everyday work.

17. VIGIL MECHANISM (WHISTLE BLOWER ) POLICY

The Company is committed to adhering to the highest standards of ethical, moral, and legal conduct of business operations. Accordingly, the Company has adopted a Vigil Mechanism Policy. The objective of the Policy is to enable any employee / director who observe violation of the Polygenta Code of Conduct OR unethical practice (whether or not violation of law) to approach the Vigil Officer without necessarily informing their line managers and without revealing their identity.

SCOPE OF THE POLICY

(a) The Whistle Blower’s role is that of a reporting party with reliable information. They are not required or expected to act as investigators or finders of facts, nor would they determine the appropriate corrective or remedial action that may be warranted in a given case.

(b) Whistle Blowers should not act on their own in conducting any investigative activities, nor do they have a right to participate in any investigative activities other than as requested by the Vigil Officer or the Chairman of the Audit Committee or the Investigators.

(c) Protected Disclosure will be appropriately dealt with by the Vigil Officer or the Chairman of the Audit Committee, as the case may be.

18. CORPORATE SOCIAL RESPONSIBILITY

The Company is not required to form a Corporate Social Responsibility Committee, as it does not satisfy the criteria as mentioned in Section 135 of the Companies Act, 2013.

19. SECRETARIAL AUDIT REPORT :

A Secretarial Audit Report given by A. Sekar, practicing Company Secretary at Mumbai, is annexed as ‘Annexure V’, forming part of this report.

The Adverse remarks of the Secretarial Audit Report are summarized as under:

It is noticed that the vacancy of Independent Director was not filled within 3 months from the date of last resignation of Independent Director as required by the Second Proviso to Rule 4 of the Companies (Appointment and Qualification of Directors) Rules,

2014. Mr. Ghanshyam Karkera, Independent Director was appointed in the Board Meeting dated 06th November, 2015 whereas the vacancy was from 16th April, 2015, consequent to the resignation of Mr. Anand Dua. Consequent to the vacancy in the position of independent director, during the period of vacancy i.e. from 16th April, 2015 to 5th November,

2015, the constitution of Board, Audit Committee and Nomination and Remuneration Committee was not in accordance with the requirements of the Companies Act, 2013 read with Clause 49 of the Listing Agreement as applicable during the period of vacancy.

The Board’s comments are as under:

Because of the continuing losses, it took longer for the Company to find a suitable Independent Director. However, as stated above from 6th November 2015 after appointment of Mr. Ghanshyam Karkera as Independent Director, the composition of the Board of Directors and committees is in compliance with Companies Act, 2013 and SEBI Listing Regulations.

20. STATUTORY AUDITORS & AUDTORS REPORT

M/s Lodha & Co, Chartered Accountant, Mumbai Statutory Auditors of the Company retire at the forthcoming Annual General Meeting of the Company and are eligible for reappointment. Members are requested to reappoint the auditors and fix their remuneration.

The Emphasis of Matter in Auditors Report as regards preparation of financial statements on going concern basis read with Note No. 26 to the Accounts is self-explanatory.

21. FIXED DEPOSITS

The Company has not accepted or renewed any deposits from the public during the year.

22. INSURANCE

The Company has taken adequate insurance for all of its assets.

23. CORPORATE GOVERNANCE

Your Company has complied with the Corporate Governance requirements stipulated under SEBI Listing Regulations except as discussed in Clause 19 above. The Report on Corporate Governance is annexed as Annexure ‘VI’ forming part of this Report.

24. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

The Management Discussion and Analysis Report, as required under the Listing Agreement with the Stock Exchange, is annexed as Annexure ‘VII’ forming part of this Report.

25. PARTICULARS OF REMUNERATION AS PER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Particulars of remuneration as per rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as ‘Annexure VIII’ forming part of this Report.

26. COMPARISON OF DIRECTORS REMUNERATION WITH MEDIAN EMPLOYEE REMUNERATION

As per rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014, the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year and other particulars is annexed as ‘Annexure IX’ forming part of this Report.

27. INDUSTRIAL RELATIONS

Cordial industrial relations continued to prevail throughout the financial year under review.

28. Extract of the Annual Return

The details forming part of the extract of Annual Return in Form MGT-9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as ‘Annexure X’ to this Report.

29. REPORTING REQUIRED UNDER SICA , 1985

As per the audited financial statements at the end of the financial year as on 31st March 2016, the Company’s accumulated losses amounted toRs,3,108.7 million which exceeded the Share Capital and Reserves of the Company ('' 2740.9 Million) byRs,367.8 million. Thus, as on 31st March 2016 ,the Company has become sick industrial company within the meaning of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Accordingly, the Board of Directors of the

Company has decided to make a reference to the Board for Industrial and Financial Reconstruction (BIFR) as required under the provisions of SICA.

Key factors to which the losses incurred by the Company during the year can be attributed to are as follows:

1. The scale of operations of your company as compared to the virgin polyester manufacturers is very less resulting into higher costs. Your company is looking into increase the capacity by debottlenecking to reduce the cost of production.

2. The global brand’s gestation period for acceptance of the recycled by international brands to switch from conventional PFY (made from petrochemicals) to sustainable PFY is more than a year.

In spite of the above, the Company emerged from FY 2015-16 having distinguished itself globally as a producer of high quality fine denier micro-filament yarn from 100% recycled postconsumer PET Bottles (and the only one in the Indian sub-continent) and share of its sales in the premium/ branded segment to its total sales witnessed a significant increase during the year as compared to the previous year. This is one of the critical milestones which your company has achieved as it can pave the way for the sustained operations in coming future. It has also established its presence with fabric manufacturers who are converters to a number of established global brands.

30. ACKNOWLEDGMENT

The Board wishes to place on record its appreciation for the valuable co-operation extended to the Company by its employees, governmental departments, lending institutions, bankers, suppliers, and its customers for their continued considerable support.

For and on behalf of the Board of Directors

Sujata Chattopadhyay

Chairperson

DIN: 2336683

Place : Mumbai

Date: 12th August 2016

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Mar 31, 2015

To The Members of Polygenta Technologies Limited,

The Directors present to you the Thirty Third Annual Report on the business and operations of Polygenta Technologies Limited (the "Company") and Audited Accounts for the financial year ended 31st March 2015.

1. FINANCIAL RESULTS

Particulars Year Ended Year Ended 31st March 2015 31st March 2014 (Rs.in Millions) (Rs.in Millions)

Revenue from Operations 556.7 552.0

Profit /(Loss) before

Depreciation and Interest (306.1) (412.9)

Depreciation 155.1 157.0

Borrowing Cost 157.7 129.7

Profit / (Loss) before

Exceptional Items (618.9) (699.6)

Exceptional Items 24.0 -

Profit / (Loss) before tax (642.9) (699.6) Provision for current tax reversal 7.7 -

Deferred Tax Assets reversal - -

Profit / (Loss) after tax (635.2) (699.6)

Balance Loss b/f from previous year (1881.3) (1,181.8)

Additional Depreciation as per Companies Act, 2013 (4.8) -

Balance of Loss to be carried to Balance Sheet (2,521.3) (1,881.3)

STATE OF COMPANY AFFAIRS

During the financial year 2014-15, the company improved the quality of its products, which supported an increase in sales of its sustainable polyester filament yarn ("PFY") made from solely from 100% post- consumer ("p-cPET") to 5,158 metric tonnes ("MTs"). Customers used these sustainable yarns for a range of apparel and other applications segments - sports, casual wear, etc. This 571 MTs increase represented a 12.4% improvement over 2013-14 sales of 4,587 MTs. However, the Company continued to incur operating income losses, though materially lower versus the prior year, due to a number of factors including:

- A dramatic fall in crude prices which lead to a

contraction in margins in the conventional market, and volatile feedstock and product pricing environment that inhibited sales and contributed to losses on inventory valuations of inputs and finished goods;

- Gradual attainment of targeted standards and consistent production of the same with top quality levels – particularly for finer deniers of micro-filament yarn – being reached only near the end of the operating year.

- The long sales cycle and switching costs encountered in supplanting entrenched, historical suppliers of PFY yarn to global brands. In a number of cases, this has also entailed persuading brands to switch from conventional PFY (made from petrochemicals) to sustainable PFY. These latter efforts have been especially challenging because your company has needed to overcome general customer perceptions of lower product consistency which has been the experience overall of global brands with suppliers in the niche segment of sustainable PFY.

In addition to its important progress on product quality and consistency, achieved gradually throughout the year, the Company also improved operating efficiencies and consistency through a wide range of initiatives, including:

i. Improving the quality of the p-cPET flakes at the input phase of the Company's proprietary chemical recycling process;

ii. Further modifications to components of its recycling process;

iii. Improved labour productivity ; and

iv. Enhances product quality practices, analytical tools and practices.

For the year 2014-15, Polygenta incurred losses of Rs.635.2 million.

Health, Safety and Environment ("HSE") and Implementation of Key Process

The Nasik plant continued in efforts to maintain a high standard of HSE performance through its HSE Management Systems, as originally conceived and developed with the support of the Company's ECB lenders (i.e. sovereign sustainability and development funds of Finland and Sweden, Finnfund and Swedfund respectively). This includes the factory monitoring and reporting regularly its operations with respect to Maharashtra Pollution Control Board and the World Bank-IFC standards for air emissions, wastewater effluent treatment, noise pollution, and compliance with the provisions of its Environmental Social Management System.

Integrated Management System Certification

In September 2013, the Company attained certification for its performance in line with recognized international standards for quality, environmental management and health and safety practices (ISO 9001 (Quality); ISO 14001 (Environment) and OHSAS 18001 (Health and Safety). During 2014/15, the Company cleared successfully its Surveillance IMS audit. End- customers that prefer sustainable inputs and supply chain partners generally require their suppliers to operate at these high international standards.

2. FINANCAL REVIEW:

- During the financial year 2014-15, the Company repaid fully the outstanding balance of its Rs.45 million of term loan from The Ratnakar Bank Ltd.

- During the previous year, Polygenta's lead- promoter and majority shareholder, PerPETual Global Technologies Limited ("PGTL") continued its extraordinary support of the project by sanctioning a USD 20 Million ECB loan (approximately Rs.127.3 crores), subordinate to the pre-existing senior debt (i.e. the Swedfund and Finnfund ECB loans and Ratnakar Bank loan facilities, "Senior Lenders"). Under the approval route of RBI ECB Regulations, the Company was permitted to use this PGTL debt facility for general corporate purposes and for capital projects. As on 31st March 2015, the Company had drawn Rs. 91.3 crores under the PGTL ECB loan facility.

- The Company is hopeful of concluding a rescheduling of its ECB loans with Swedfund and Finnfund which, as of15th July 2015 were past due both in terms of interest Rs.30.09 crores and in terms of principal Rs.106.80 crores.

- During the year, the Company allotted 1,325,000 Compulsory Convertible Preference Shares ("CCPS") on 30th September 2014 to VenturEast Life Fund III and 10,155,893 CCPS on 24th February 2015 to its lead-promoter PGTL. These CCPS are convertible into an equal number of equity shares after the allottees issue a two-months' notice. After 18 months following allotment, if no such notice has been issued, the CCPS will be compulsorily converted into equity shares. Upon conversion of all of these CCPS, the equity share capital will increase by 7.9% from Rs. 1,447,256,510 to Rs.1,562,065,440.

3. DETAILS ON INTERNAL FINANCIAL CONTROLS

RELATED TO FINANCIAL STATEMENTS

Your Company has put in place adequate internal financial controls with reference to the financial statements, some of which are outlined below:

Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 2013, to the extent applicable.

4. MATERIAL EVENTS OCCURRING AFTER BALANCE SHEET

Your Company continues to incur losses and the Company's net worth has substantially eroded as on 30th June 2015. The Company is taking all possible steps to improve the operating results as discussed in Management Discussion and Analysis attached to this report.

5. DIVIDEND

Due to its losses, the Company is unable to declare a dividend for the financial year ended 31st March 2015.

6. EXPORTS

During the year under review your Company earned export revenues from PFY sales aggregating Rs.36.3 million.

7. DISCLOSURE OF PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 are set out in a separate statement attached hereto and forming part of the report. (Annexure 'I')

8. DIRECTORS and KEY MANAGERIAL PERSONS

Mr. Ramesh Alur, Nominee Director of VenturEast Life Fund III retires by rotation and, being eligible, offers himself for reappointment.

During the year pursuant to Section 149 of the Companies, 2013 Mr. Krishnava Dutt was appointed as an Independent Director to the Board of the Company with effect from 13th August 2014. Subsequently, he resigned and was relieved as Independent Director with effect from 19th December 2014.

Ms. Sujata Chattopadhyay was appointed as an Independent Director to the Board of the Company. Her appointment is for a period of five years with effect from 31st March 2015.

During the year Mr. M N Sudhindra Rao was appointed as CEO of the Company with effect from 17th July 2014.

Mr. Amarjit Singh Bhatia was appointed as CFO of the Company with effect from 23rd April 2014 and he resigned as CFO of the Company and was relieved with effect from 21st February 2015.

9. DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013, read with the Schedules and rules issued thereunder.

10. COMPANY'S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Nomination and Remuneration (N&R) Committee has formulated a detailed Nomination Remuneration policy which, inter alia, deals with the manner of selection of Directors and remuneration including criteria for determining qualifications, positive attributes, independence of directors and other matters provided under section 178(3) of the Companies Act,2013. The highlights of the Policy are given as Annexure 'II' forming part of this Report.

11. BOARD TRAINING AND INDUCTION

At the time of appointing a Director, a formal letter of appointment is given to the Director, which inter alia, explains the role, function, duties and responsibilities expected of the Director.

The Directors are also appraised about the various compliances under Companies Act, 2013 and Code of conduct of independent directors as per the Companies Act, 2013 and a confirmation is taken from them for compliance therewith.

By way of introduction to the Company, the Directors are presented the last three years Annual Report. Further, with a view to familiarise the new Directors with the Company's operations, when the business plan presentation is made to the Board, the familiarisation is also suitably combined therewith.

The CEO also has one-to-one discussions with the newly appointed directors and they attend an orientation at the company's factory. The above initiatives help the Directors to understand the Company, its business, the regulatory framework in which the company operates and equips the Directors to fulfill effectively their role as Directors of the Company.

12. DIRECTORS' RESPONSIBILITY STATEMENT / CODE OF CONDUCT

The Directors Responsibility Statement referred to in clause (c) of sub –section (3) of Section 134 of the Companies Act, 2013 is given in Annexure 'III' forming part of this Report. The Code of Conduct of the Company is affirmed by the Directors and Senior Management and the receipt of the same is affirmed by the CEO in Annexure 'III' forming part of this Report.

13. NUMBER OF MEETING OF THE BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors have met 11 times during the year ended 31st March, 2015. The composition of the Audit Committee of Directors, Nomination and Remuneration Committee of Directors, and Stakeholders Relationship Committee of Directors, number of meetings held of each committee during the financial year 2014-2015 and meetings attended by each member of the committee as required under Companies Act, 2013 are provided in Corporate Governance Report forming a part of the report in Annexure VI . The recommendations by the Audit Committee as and when made to the Board have been accepted by the Board.

14. DIRECTORS EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board is in the process of carrying out an annual evaluation. The Annual Evaluation is planned for its own performance, and evaluation of the working of its committees. Similarly, the Board is in the process of evaluating the performance of individual Directors including the Chairman of the Board.The Independent Director Krishnava Dutta resigned during the year and Mr. Anand Dua left shortly after the year-end on 15th April 2015. The other Independent Director, Ms. Sujata Chattopadhyay, only recently joined the Board on 31st March 2015. Therefore, evaluation of independent directors could not be done during the year under review.

15. PARTICULARS OF LOANS AND GUARANTEES OR INVESTMENTS

Because there were no loans, .guarantees, or investments given by the Company during the year, the Company is not required to comply with the provisions of section 186 of the Companies Act, 2013.

16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions that were entered into during the financial year were on an arms-length basis and were in the ordinary course of business. A list of the transactions is referred to in Note No. 31 to Financial Statements.

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013, including certain arms-length transactions under the third proviso thereto, is disclosed in Form No. AOC-2 which is attached as 'Annexure IV' forming part of this report.

The Company's Related Party Transaction Policy, as approved by the Board, is uploaded on the Company's website at http: // www. polygenta. com / company_policies.html

17. RISK MANAGEMENT POLICY

The Company has developed a Risk Management Policy. It seeks to identify risks inherent in the Company's business operations and provide guidelines to define, measure, report, control and mitigate the identified risks. The objective of the Company's Risk Management is to create and protect shareholder value by prudently minimising threats or losses, and identifying and maximising opportunities. The policy endeavours to provide a practical enterprise-wide risk management framework that fosters employees integrating risk management into their everyday work.

18. VIGIL MECHANISM (WHISTLE BLOWER ) POLICY

The Company is committed to adhering to the highest standards of ethical, moral, and legal conduct of business operations. Accordingly, the Company has adopted a Vigil Mechanism Policy. The objective of the Policy is to enable any employee / director who observe violation of the Polygenta Code of Conduct OR unethical practice (whether or not violation of law) to approach the Vigil Officer without necessarily informing their line managers and without revealing their identity.

SCOPE OF THE POLICY

(a) The Whistle Blower's role is that of a reporting party with reliable information. They are not required or expected to act as investigators or finders of facts, nor would they determine the appropriate corrective or remedial action that may be warranted in a given case.

(b) Whistle Blowers should not act on their own in conducting any investigative activities, nor do they have a right to participate in any investigative activities other than as requested by the Vigil Officer or the Chairman of the Audit Committee or the Investigators.

(c ) Protected Disclosure will be appropriately dealt with by the Vigil Officer or the Chairman of the Audit Committee, as the case may be.

19. CORPORATE SOCIAL RESPONSIBILITY

The Company is not required to form a Corporate Social Responsibility Committee, as it does not satisfy the criteria as mentioned in Section 135 of the Companies Act, 2013.

20. SECRETARIAL AUDIT REPORT :

A Secretarial Audit Report given by A. Sekar, practicing Company Secretary at Mumbai, is annexed as 'Annexure V', forming part of this report.

The Board's comments on the adverse remarks of the Secretarial Audit Report are as under:

The Secretarial Auditors have qualified their report because the composition of the Board of Directors, Audit Committee and Nomination and Remuneration Committee is not in complete compliance with Clause 49 of the Listing Agreement. The Company is looking actively for two independent directors. Once new additional independent directors are appointed, they will be considered for appointment to the Audit Committee and Nomination and Remuneration Committee. Once the independent directors are appointed, it is expected that the constitution of the Board, Audit Committee and Nomination and Remuneration Committee memberships will also be brought into compliance with clause 49 of the Listing Agreement.

A. Sekar has also qualified its report because, during the year under review, there has been no separate meeting of the independent directors as required in Clause 49 II B 6 of the Listing Agreement and the provisions of Companies Act, 2013. During the last quarter of the financial year, when the meeting was proposed to be held, there was only one Independent Director on the Board, because one Independent Director resigned on 19 December 2014.

21. STATUTORY AUDITORS & AUDTORS REPORT

M/s Lodha & Co, Chartered Accountant, Mumbai Statutory Auditors of the Company retire at the forthcoming Annual General Meeting of the Company and are eligible for reappointment. Members are requested to reappoint the auditors and fix their remuneration.

The Emphasis of Matter in Auditors Report as regards preparation of financial statements on going concern basis read with Note No. 27 to the Accounts is self explanatory.

22. FIXED DEPOSITS

The Company has not accepted or renewed any deposits from the public during the year.

23. INSURANCE

The Company has taken adequate insurance for all of its assets.

24. CORPORATE GOVERNANCE

Your Company has complied with the Corporate Governance requirements stipulated under Clause 49 of the Listing Agreement except those as discussed in Clause 20 above.The Report on Corporate Governance is annexed as Annexure 'VI' forming part of this Report.

25. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

The Management Discussion and Analysis Report, as required under the Listing Agreement with the Stock Exchange, is annexed as Annexure 'VII' forming part of this Report.

26. PARTICULARS OF REMUNERATION AS PER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Particulars of remuneration as per rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as 'Annexure VIII' forming part of this Report.

27. COMPARISON OF DIRECTORS REMUNERATION WITH MEDIAN EMPLOYEE REMUNERATION

As per rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year and other particulars is annexed as 'Annexure IX' forming part of this Report.

28. INDUSTRIAL RELATIONS

Cordial industrial relations continued to prevail throughout the financial year under review.

29. Extract of the Annual Return

The details forming part of the extract of Annual Return in Form MGT-9 in accordance with Section

92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as 'Annexure X' to this Report.

30. MEGA-PROJECT STATUS

The Company's development of its factory at Nashik has qualified for benefits under the State of Maharashtra mega project program subject to completing specified capital investments of at least Rs.2,500 million in relation to the manufacture of POY and DTY. The Company was granted an extension to 31st March 2015 to fulfil this investment condition. The Company has applied for a further extension to 31st March 2017. Upon fulfilling this condition, the Company will be eligible for financial benefits, including exemption from prescribed taxes and duties.

31. REPORTING REQUIRED UNDER SECTION 23(1) (a, b) of SICA Act 1985

As per the audited accounts at the end of the financial year as on 31st March 2015, the Company's accumulated losses amounted to Rs. 2,521.3 million. As per the criteria set out in SICA Act 1985, over the preceding four financial years and prior to taking into consideration any reconstitution of equity capital from further equity investments by investors, the Company has been deemed to have an erosion more than 50% of the Company's peak net worth of Rs.2201.3 million in the preceding four years. Notwithstanding the Company having Rs. 219.6 million in net worth under Section 23(1) (a) and 23(1) (b) of the Sick Industrial Companies (Special Provisions) Act (SICA), 1985, the Company is required, within a period of 60 days from the date of finalisation of the duly audited accounts of the Company for the relevant financial year, to report such erosion to the Board for Industrial & Financial Reconstruction (BIFR). Further, the Company's

Board of Directors is required to report such erosion to its shareholders and the causes for such erosion at a shareholder general meeting convened specifically for this purpose.

Because of reasons set out under the Operational Review of this Report, the Company continued to incur the losses in the 2014-2015 fiscal year. The Company's adverse financial results over the last four years totalled losses of Rs. 2,522.10 million.

These recent losses have arisen due the following reasons:

- A dramatic fall in crude prices which lead to a contraction in margins in the conventional market, and volatile feedstock and product pricing environment that inhibited sales and contributed to losses on inventory valuations of inputs and finished goods;

- Gradual attainment of targeted standards and consistent production of the same with top quality levels – particularly for finer deniers of micro-filament yarn – being reached only near the end of the operating year.

- The long sales cycle and switching costs encountered in supplanting entrenched, historical suppliers of PFY yarn to global brands. In a number of cases, this has also entailed persuading brands to switch from conventional PFY (made from petrochemicals) to sustainable PFY. These latter efforts have been especially challenging because your company has needed to overcome general customer perceptions of lower product consistency which has been the experience overall of global brands with suppliers in the niche segment of sustainable PFY.

In spite of the above, the Company emerged from FY 2014-15 having distinguished itself globally as a producer of high quality fine denier micro-filament yarn from 100% recycled post-consumer PET Bottles (and the only one in the Indian sub- continent). It has also established its presence with fabric manufacturers who are converters to a number of established global brands.

32. ADDITIONAL INFORMATION ON DIRECTORS RECOMMENDED FOR APPOINTMENT / REAPOINTMENT OR SEEKING ELECTION AT THE ANNUAL GENERAL MEETING AS PRESCRIBED UNDER THE LISTING AGREEMENT:

Ramesh Alur

Mr. Ramesh Alur was appointed as a Nominee Director of VenturEast Life Fund III effective 25th March 2014 pursuant to Article 110A of the Articles of Association of the Company and holds this office until the conclusion of the forthcoming Annual General Meeting. He was nominated for appointment by VenturEast Life Fund III in place of Mr. Sarath Naru.

Mr. Ramesh Alur, aged 58 years, is a B. Tech (Chemical Engineering) form REC, Warangal and Master in Business Administration from Indian Institute of Management, Bangalore with a specialisation in marketing and finance. He stood in the top 3 (three) positions throughout his academic career.

Mr. Alur has over 26 (Twenty Six) years of experience in various fields. He is currently the senior Vice President of APIDC Venture Capital Limited and has extensive experience in Technology, Production, R&D, Project Appraisals, Monitoring, and Financial Management.

He started his career as a Chemical Engineer at BARC in 1979. He also worked as a Scientific Officer, Reactor Research Centre, Kalpakkam. Subsequently, he worked with Bakelite Hylam, a leader in industrial laminates. He also underwent a training programme conducted by the World Bank in USA in October, 1996 for venture capitalists in India.

He holds a directorship position in the following companies: (1) APIDC Venture Capital Pvt. Ltd.; (2) Dynam VenturEast Pvt. Ltd.; (3) Fore Transcription Pvt. Ltd.; (4) Elbit Medical Diagnostics Ltd.; (5) Bioserve Biotechnologies (India) Pvt. Ltd.; (6) Cecilia Healthcare services Pvt. Ltd.; (7) VenturEast Fund Advisors India Pvt. Ltd.; (8) Mardil Medical Devices Pvt. Ltd.; (9) iMedX Information Services Pvt. Ltd.; (10) World Infotech Pvt. Ltd.; (11) Total Prosthetics & Orthotics Pvt. Ltd.; (12) Phoenix Cardiac Devices Pvt. Ltd.; (13) Evolva Biotech Pvt. Ltd.; (14) Marillion Pharmaceuticals India Pvt. Ltd.; (15) Itero Biopharmaceuticals Pvt. Ltd.; and (16) VenturEast Drug Discovery Services Pvt. Ltd.

He is a member of Nomination and Remuneration Committee of APIDC Venture Capital Pvt. Ltd. He is also member of the following committees of Polygenta Technologies Limited: Audit Committee, Nomination and Remuneration Committee, Allotment and Conversion Committee and Risk Management Committee.

Marc Lopresto

Mr. Marc Lopresto was appointed as Wholetime Director for a period of three years with effect from 1st September 2013. He resigned as Whole time

Director with effect from 31st May 2015 and he was appointed as a Director with effect from 1st June 2015.

Mr. Marc Lopresto, aged 59 years, is an MBA from Wharton (Finance and Strategy specialisation), and an AB in Economics (Honours) University of California, Berkeley. He has experience in M&A, restructuring and risk advisory, and project / venture capital fund raising including for the power, metals, and media sectors.

He is Director of PerPETual Global Technologies Limited and AlphaBottle Limited.

He is also a member of the following committees of Polygenta: Audit, Stakeholders Relations, Allotment and Conversion Committee and Risk Management Committee.

Sujata Chattopadhyay

Ms. Sujata Chattopadhyay, aged 50 (fifty) years, is a Practising Company Secretary from Mumbai. She is also a fellow member of Institute of Costs Accountants of India. She is having over 27 (twenty seven) years of experience in the area of Finance, Cost accounts / cost audit and Company Secretarial work.

She is a Director of Aryasta LifeScience India Limited, Steel Exchange India Limited and Vakrangee Limited. Apart from being Director of Polygenta Technologies Limited, she is a member of the following committees of Polygenta - Audit

Committee & Nomination and Remuneration Committeee.

She does not hold by herself or for any other person on a beneficial basis, any share in the Company.

33. ACKNOWLEDGEMENT

The Board wishes to place on record its appreciation for the valuable co-operation extended to the Company by its employees, governmental departments, lending institutions, bankers, suppliers, and its customers for their continued considerable support.

For and on behalf of the Board of Directors

Marc Lopresto

Chairman

Date: 12th August 2015

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Mar 31, 2014

To, The Members of Polygenta Technologies Limited,

The Directors take pleasure in presenting to you the Thirty Second Annual Report and Audited Accounts for the financial year ended 31st March 2014.

1. FINANCIAL RESULTS

Particulars Year Ended Year Ended 31st March 2014 31st March 2013 (Rs. in Millions) (Rs. in Millions)

Revenue from Operations 551.9 716.4

Profit /(Loss) before Depreciation and Interest (412.9) (327.1)

Depreciation 157.0 136.7

Borrowing Cost 129.7 108.2

Profit / (Loss) before Exceptional Item (699.6) (572.0)

Add : Exceptional Items - (13.0)

Profit / (Loss) before tax (699.6) (585.0)

Less: Provision for current Tax - -

Less: Deferred Tax Assets reversal - 96.6

Profit / (Loss) after tax (699.6) (681.6)

Balance Loss b/f from previous year (1,181.8) (500.2)

Balance of Loss to be carried to Balance Sheet (1,881.4) (1,181.8)

2. OPERATIONS REVIEW

Polygenta Technologies Limited (the "Company" or "Polygenta") has an operating license from PerPETual Global Technologies Limited (formerly known as AlphaPET Limited) ("PGTL") for the ReNEW process ("ReNEW"), a recycling technology for recycling post-consumer PET plastic bottles ("p-cPET") into a high quality feedstock, which Polygenta uses to manufacturer polyester filament yarn ("PFY"). During the financial year 2013-14, Polygenta undertook capital project to expand its recycling capacity, undertake technology development projects and at the same time operated continuously for more than nine months its recycling and CP plant making high quality 100% recycled content yarn.

1. Detailed Engineering and Civil works under EPC contract for ReNEW 2 project : Most of the detailed engineering and civil works was completed during the financial year 2013-14 for its recycling project that will increase the operating capacity to 75tpd.

2. Pilot Plant for Polymerisation and Textile to Textile (T2T) Plant: During the fiscal year, polymerisation pilot plant was commissioned and T2T plant was mechanically completed.

The above developments mark significant progress towards the Company''s goal to become a leader in manufacturing high quality PFY from p-cPET. This is a smaller specialty segment within the much larger PFY market with pricing materially higher than the more commoditised segments of the PFY market made from high purity virgin petrochemicals from crude oil.

During the financial year under review, the revenues from manufacturing operations were Rs 551.9 million. However, the Company was not able to achieve positive margins. Factors contributing to operating losses included:

- Unprecedented rise in the post-consumer/ waste Pet bottle prices by 30-35% due to abnormal rains and significant depreciation of Indian currency.

- Gradual establishment of process parameter and quality standards for challenging applications in micro filament yarn made from 100% post-consumer PET Bottles.

- Entry barriers in branded niche markets internationally, which has long lead time for testing, product performance, seasonality and reorders time.

Health, Safety and Environment ("HSE") and Implementation of Key Process

The Nasik plant has highest standard of HSE Management Systems ("HSE-MS"). The plant monitors its operations against Maharashtra Pollution Control Board and the World Bank-IFC standards for air emissions, wastewater effluent treatment, noise pollution and the provision of an Environmental Social Management System.

Integrated Management System Certification

The company became compliant with ISO 9001 (Quality); ISO 14001 (Environment) and OHSAS 18001 (Health and Safety). End- customers that prefer sustainable inputs and supply chain partners generally require their suppliers to operate at high international standards. To ensure that Polygenta fulfils its own corporate credo and is positioned favourably in manufacturing and selling sustainable PFY, it has already implemented SAP for its operations and accounting.

3. FINANCIAL REVIEW

- During the financial year 2013-14, the Company repaid Rs. 65 million out of Rs. 100 million of term loans to Ratnakar Bank. The outstanding balance is Rs. 45 million.

- The Company''s External Commercial Borrowing ("ECB") lenders continued their support of the Company''s efforts to implement a breakthrough technology for the sustainable polyester textile sector by agreeing rescheduling of the principal repayment of Euros 15 million in ECB loan principal outstanding and a deferral of select near term interest payments.

- During the fiscal year, the company got approval from RBI to raise funds under ECB route from its holding company viz. PGTL who has immensely supported the project. Under approval route of ECB Regulations of RBI, the company was allowed to utilize the funds under general corporate purpose too over and above for capital projects. The company was able to drawdown Rs. 359.5 million as ECB loan during the period.

- During the fiscal year and earlier period, the Company also raised funds Rs. 617.9 million from its holding company viz. PGTL and an Indian venture fund to enhance capitalisation in view of the operating losses and capital projects. These funds have been received as share application money and the Company is in the process to allot the shares.

- During the year 22,069,886 Compulsory Convertible Preference Shares were converted into equal number of equity shares.

4. DIVIDEND

Due to its losses, the Company is unable to declare a dividend for the year ended 31st March, 2014.

5. EXPORTS

During the year, Polygenta earned significant export revenue from the sale of PFY and Chips amounting to Rs. 62.2 million that helped establish its commercial position in goods and services in international markets.

6. PARTICULARS OF EMPLOYEES

There are no employees who draw remuneration in excess of limits prescribed under section 217 (2A) of the Companies Act, 1956, and the Companies (Particulars of Employees) Rules, 1975, as amended.

7. DISCLOSURE OF PARTICULARS RELATING TO ENERGY, RESEARCH AND DEVELOPMENT, AND FOREIGN EXCHANGE FLOWS

Information as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo, are given in Annexure ''I'' forming part of this Report.

8. DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Fredrik Wijkander retires by rotation and, being eligible, offers himself for reappointment.

During the year under review, Mr. Sarath Naru joined as Nominee Director of VenturEast Life Fund III (VE). Towards the end of the year Mr. Ramesh Alur was nominated as Nominee Director of VE in place of Mr. Sarath Naru.

During the year Mr. Subodh Maskara and Mr. Vinit Baid retired by rotation and were not re-appointed.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

The statement as required under Section 217 (2AA) of the Companies Act, 1956 is given in Annexure ''II'' forming part of this Report.

10. AUDITORS

M/s Lodha & Co, Auditors of the Company retire at the forthcoming Annual General Meeting and are eligible for reappointment. Members are requested to reappoint these Auditors and to fix their remuneration.

11. FIXED DEPOSITS

The Company has not accepted or renewed any deposits from the public during the year.

12. INSURANCE

The Company has taken adequate insurance for its assets.

13. CORPORATE GOVERNANCE

Your Company has complied with the Corporate Governance requirements stipulated under Clause 49 of the Listing Agreement except in respect of the constitution of the Board and Audit Committee. The Report on Corporate Governance is annexed as Annexure ''III'' forming part of this Report.

14. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

The Management Discussion and Analysis Report, as required under the Listing Agreement with the Stock Exchange, is annexed as Annexure ''IV'' forming part of this Report.

15. INDUSTRIAL RELATIONS

Cordial industrial relations continued to prevail throughout the financial year under review.

16. MEGA-PROJECT STATUS

The Nashik project has qualified for benefits under the State of Maharashtra mega project program subject to completing specified capital investments of at least Rs. 2,500 million in relation to the manufacture of POY and DTY at the Company''s Nashik site. The Company was granted extension upto March 31, 2015 to complete this investment condition. Upon fulfilling this condition, the Company will be eligible for financial benefits, including exemption from prescribed taxes and duties.

17. REPORTING REQUIRED UNDER SECTION 23(1) (a, b) of SICA Act 1985

As per the audited accounts at the end of the financial year as on 31st March, 2014, accumulated losses amounted to Rs. 1,881.4 million. As per the criteria set out in SICA Act 1985, the Company has been deemed to have an erosion of peak net worth of Rs. 2,201.3 million in the preceding four financial years, which constitutes an erosion of more than 50% of peak net worth. Notwithstanding that the Company having Rs. 937.8 million in net worth and share application funds, under Section 23(1)(a) and 23(1)(b) of the Sick Industrial Companies (Special Provisions) Act (SICA), 1985, the Company is required, within a period of 60 days from the date of finalisation of the duly audited accounts of the Company for the relevant financial year, to report the fact of such erosion to the Board for Industrial & Financial Reconstruction (BIFR). Further, the Company''s Board of Directors is required to report such erosion to its shareholders and the causes for such erosion at a general meeting of the shareholders of the Company specifically for this purpose.

Because of reasons set out under the Operational Review of this Report, the Company continued to incur the losses in the 2013-2014 fiscal year. The Company''s adverse financial results over the last three years amounted to Rs. 1,879.2 Million (i.e. 2013- 14: Rs. 699.6 Million; 2012-13: Rs. 681.6 Million and 2011-12: Rs. 498.0 Millions).

These recent losses have arisen due the following reasons:

- Unprecedented rise in the post consumer/ waste Pet bottle prices by 30-35% due to abnormal rains and significant depreciation of Indian currency.

- Gradual establishment of process parameter and quality standards for challenging applications in micro filament yarn made from 100% post consumer PET Bottles.

- Entry barriers in branded niche markets internationally, which has long lead time for testing, product performance, seasonality and reorders time.

It is normal for any company to streamline its operations and sales in its first year of operations for a new product i.e. 100% recycled PFY. The Company is currently in the advanced phase discussion with major international branded customer for strategic sales and investment tie-up and are getting new/repeat orders at EBITDA neutral prices.

18. ADDITIONAL INFORMATION ON DIRECTORS RECOMMENDED FOR APPOINTMENT / REAPOINTMENT OR SEEKING ELECTION AT THE ANNUAL GENERAL MEETING AS PRESCRIBED UNDER THE LISTING AGREEMENT:

Fredrik Wijkander

Mr. Fredrik Wijkander, aged 51 years, has a degree in Mechanical Engineering from Stockholm Technical Institute. He is a Senior Investment Manager with Swedfund International AB (Swedfund) and was appointed by Swedfund International AB. to be the Nominee Director representing the ECB lenders on the Board of Directors. Mr. Wijkander has considerable experience in Europe and emerging markets in marketing financial, legal, investment banking and environmental and ethical due diligence.

He is a Director in SIA Troll Nursery, Latvia, and Cimbenin N.A., Benin.

He is a member of Nomination and Remuneration Committee of Polygenta.

He does not hold any shares in Polygenta.

Anand Dua

Mr. Anand Dua is an Independent Director appointed on the Board of the Company on 16th October, 2012.

Mr. Anand Dua, 52 (Fifty Two) years , is a Practising Chartered Accountant from New Delhi having over 31 years of experience.

His areas of practice include Company Law, Tax Advisory, Audit Services, Project Financing, and Investment Consulting.

He is a Director of Padmanabh Promoters Private Limited and RSA Low Carbon Services Private Limited. Apart from being Director of Polygenta Technologies Limited, he is a member of the following committees of Polygenta - Audit Committee, Nomination and Remuneration Committee (Earlier known as Remuneration Committee), Stakeholders Relationship Committee (earlier known as Shareholders Grievance and Share Transfer Committee) and Conversion Committee.

He does not hold any shares of Polygenta Technologies Limited.

Ramesh Alur

Mr. Ramesh Alur has been appointed as a Nominee Director of VenturEast Life Fund III effective 25th March, 2014 pursuant to Article 110A of the Articles of Association of the company and holds office until the conclusion of the forthcoming Annual General Meeting. He has been nominated for appointment by VenturEast Life Fund III in place of Mr. Sarath Naru.

Mr. Ramesh Alur, 57 (Fifty Seven) years, is a B. Tech (Chemical Engineering) form REC, Warangal and Master in Business Administration from Indian Institute of Management, Bangalore with specialisation in marketing and finance. He stood in top 3 (Three) positions throughout his academic career.

Mr. Alur has over 25 (twenty five) years of experience in various fields. He is currently the senior Vice President of APIDC Venture Capital Limited and has extensive experience in Technology, Production, R&D, Project Appraisals, Monitoring and Financial Management.

He started his career as Chemical Engineer at BARC in 1979. He also worked as Scientific Officer, Reactor Research Centre, Kalpakkam. Subsequently he worked with Bakelite Hylam, a leader in industrial laminates. He also underwent a training programme conducted by the World Bank in USA in October, 1996 for Venture Capitalist in India.

He holds position of directorship in the following companies: (1) APIDC Venture Capital Pvt. Ltd. (2) Dynam Ventureast Pvt. Ltd.(3) Fore Transcription Pvt. Ltd. (4) Elbit Medical Diagnostics Ltd. (5) Bioserve Biotechnologies (India) Pvt. Ltd. (6) Cecilia Healthcare Services Pvt. Ltd. (7) Ventureast Fund Advisors India Pvt. Ltd. (8) Mardil Medical Devices Pvt. Ltd. (9) iMedX Information Services Pvt. Ltd. (10) World Infotech Pvt. Ltd. (11) Total Prosthetics & Orthotics Pvt. Ltd. and (12) Phoenix Cardiac Devices Pvt. Ltd.

He is also member of the following committees: Audit Committee, - Remuneration Committee, Allotment and Conversion Committee.

19. ACKNOWLEDGEMENT

The Board wishes to place on record its appreciation for the valuable co-operation extended to the Company by its employees, governmental departments, lending institutions, bankers, suppliers, and its customers for their continued considerable support.

For and on behalf of the Board of Directors

Marc Lopresto

Chairman

Date: June 17, 2014

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Mar 31, 2013

The Members of Polygenta Technologies Limited,

The Directors take pleasure in presenting to you the Thirty First Annual Report and Audited Accounts for the financial year ended 31st March 2013.

1. FINANCIAL RESULTS Year Ended Year Ended 31st March 2013 31st March 2012 (Rs.in Millions) (Rs. in Millions)

Revenue from Operations 738.3 1,802.2 Profit/(Loss) before

Depreciation and Interest (327.1) (235.0)

Depreciation 136.7 131.7

Borrowing Cost 108.2 138.8

Profit / (Loss) before

Exceptional Item (572.0) (505.5)

Add : Exceptional Items 7.5

Profit / (Loss) before tax (572.0) (498.0)

Les: Provision for current Tax

Less: Deferred Tax Assets reversal 96.6

Profit / (Loss) after tax (681.6) (498.0)

Balance Loss b/f from previous year (500.2) (2.2)

Balance of Loss to be carried to Balance Sheet (1,181.8) (500.2)

2. OPERATIONS REVIEW

Polygenta Technologies Limited (the "Company" or "Polygenta") has an operating license from PerPETual Global Technologies Limited (formerly known as AlphaPET Limited) ("PGTL") for the ReNEW process ("ReNEW"), a recycling technology for recycling post-consumer PET bottles ("p-cPET") into a high quality feedstock, which Polygenta uses to manufacturer polyester filament yarn ("PFY"). During the financial year 2012-13, Polygenta undertook and executed three primary capital projects to position it to become a leading supplier of high quality 100% recycled content yarn. These projects were:

1) Design, execution and commissioning of a reversible operating rate reduction of the continuous polymerisation unit ("CP") at the Company''s Nashik factory:

The Company successfully completed this project, reversibly reducing its continuous polymerisation plant operating rate to 20-25 metric tons per day (tpd) from 70 tpd, thereby matching the operating capacity of the ReNEW recycling unit at the plant. The successful completion of this project during June to August 2012 resulted in the Company manufacturing its first texturised filament yarn from 100% recycled p-cPET in August 2012.

2) Design, construction, and commissioning of Feedstock Enhancement unit ("FE Unit"):

During July-November 2012, the Company augmented its ReNEW recycling unit by adding a Feedstock Enhancement unit The FE unit improved the composition of the recycled ester prior to its introduction into the CP and provided the added facility for transforming molten recycled ester into a form which can be stored for later use.

3) Mono-Ethylene Glycol (MEG) Recovery unit :

In February 2013, the Company commissioned a MEG Recovery unit the purpose of which was to provide for a better purification/ yield and lower cost recovery of MEG for re-use in the ReNEW unit.

The above developments mark significant progress toward the Company''s goal to become a leader in manufacturing high quality PFY from p-cPET. This is a smaller speciality segment within the much larger PFY market with pricing materially higher than the more commoditised segments of the PFY market made from high purity virgin petrochemicals from crude oil.

During the financial year under review, the revenues from manufacturing operations were Rs 738.3 million. However, the Company was not able to achieve positive margins. Factors contributing to operating losses included:

- Below normal market price levels over raw material cost in the PFY market due to poor macro-economic fundamentals and recent additions of significant capacity in the Indian PFY sector.

- The Company was not operational for a considerable part of the year as it was engaged in the aforementioned capital projects to shift the Company to manufacturing 100% recycled p-cPET content yarn efficiently and sustainably.

Health, Safety and Environment ("HSE") and Implementation of Key Process

The Nashik plant made significant progress in implementing systematically its HSE Management Systems ("HSE-MS"). The plant monitors its operations against Maharashtra Pollution Control

Board and the World Bank-IFC standards for air emissions, wastewater effluent treatment, noise pollution and the provision of an Environmental Social Management System.

ISO Certification

End-customers that prefer sustainable inputs and supply chain partners generally require their suppliers to operate at high international standards. To ensure that Polygenta fulfils its own corporate credo and is positioned favourably in manufacturing and selling sustainable PFY, it has already implemented SAP and is working to become compliant with ISO 9000 (Quality); ISO 14000 (Environment) and OHSAS 18001 (Health and Safety).

3. FINANCIAL REVIEW

- During the financial year 2012-13, the Company was granted a term loan of Rs. 100 million to finance a significant portion of the capital expenditure for the FE Unit and the MEG Recovery unit.

- The Company''s External Commercial Borrowing ("ECB") lenders continued their support of the Company''s efforts to implement a breakthrough technology for the sustainable polyester textile sector by agreeing a rescheduling of the principal repayment of Euros 15 million in ECB loan principal outstanding and a deferral of select near term interest payments.

- During the financial year 2012-13, the Company has made a preferential allotment of 22,069,886 Compulsory Convertible Preference Shares ("CCPS") of Rs. 10/- each at a premium of Rs. 33 per CCPS (total consideration Rs. 949 million). Further, during the financial year 2012-13, the Company has raised an additional amount of Rs. 179 million against which shares are yet to be allotted.

4. DIVIDEND

Due to its losses, the Company is unable to declare a dividend for the year ended 31st March 2013.

5. EXPORTS

During the year, Polygenta earned significant export revenue from the sale of PFY and Chips amounting to Rs.131.4 million that helped establish its commercial position in international markets.

6. PARTICULARS OF EMPLOYEES

There are no employees who draw remuneration in excess of limits prescribed under section 217 (2A) of the Companies Act, 1956, and the Companies (Particulars of Employees) Rules, 1975, as amended.

7. DISCLOSURE OF PARTICULARS RELATING TO ENERGY, RESEARCH AND DEVELOPMENT, AND FOREIGN EXCHANGE FLOWS

Information as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo, are given in Annexure ''I'' forming part of this Report.

8. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Subodh Maskara and Mr. Vinit Baid retire by rotation and offer themselves for reappointment.

During the year under review, Mr. Anand Dua joined as an Independent Director. Also IFCI Ltd. withdrew its nomination of Mr. Awadhesh Kumar, its Nominee Director, and he was relieved from his post as a Director on the Board of the Company.

Subsequent to the year end, Mr. Sarath Naru has joined as a Director with effect from 14th August 2013. He has been nominated by VenturEast Life Fund III in accordance with the Articles of Association.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

The statement as required under Section 217 (2AA) of the Companies Act, 1956 is given in Annexure ''II'' forming part of this Report.

10. AUDITORS

M/s Lodha & Co, Auditors of the Company retire at the forthcoming Annual General Meeting and are eligible for reappointment. Members are requested to reappoint these Auditors and to fix their remuneration.

11. FIXED DEPOSITS

The Company has not accepted or renewed any deposits from the public during the year.

12. INSURANCE

The Company has taken adequate insurance for its assets.

13. CORPORATE GOVERNANCE

Your Company has complied with the Corporate Governance requirements stipulated under Clause 49 of the Listing Agreement except in respect of the constitution of the Board. The Report on Corporate Governance is annexed as Annexure ''III'' forming part of this Report.

14. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

The Management Discussion and Analysis Report, as required under the Listing Agreement with the Stock Exchange, is annexed as Annexure ''IV'' forming part of this Report.

15. INDUSTRIAL RELATIONS

Cordial industrial relations continued to prevail throughout the financial year under review.

16. MEGA-PROJECT STATUS

The Nashik project previously qualified for benefits under the State of Maharashtra mega project program subject to completing specified capital investments of at least Rs. 2,500 million in relation to the manufacture of POY and DTY at the Company''s Nashik site. The Company is actively seeking a one year extension of the original 31st March 2013 deadline to complete this investment condition. Upon fulfilling this condition, the Company will be eligible for financial benefits, including exemption from prescribed taxes and duties.

17. REPORTING REQUIRED UNDER SECTION 23(1) (a, b) of SICA Act 1985

As per the audited accounts at the end of the financial year as on 31st March, 2013, accumulated losses amounted to Rs. 1,181.8 million. Per the criteria set out in the SICA Act, 1985, the Company has been deemed to have an erosion of peak net worth of Rs. 1,254.7 million in the preceding four financial years, which constitutes an erosion of more than 50% of peak net worth. Notwithstanding that the Company having Rs.1,120 million in net worth and share application funds, under Section 23(1)(a) and 23(1)(b)of the Sick Industrial Companies (Special Provisions) Act (SICA), 1985, the Company is required, within a period of 60 days from the date of finalisation of the duly audited accounts of the Company for the relevant financial year, to report the fact of such erosion to the Board for Industrial & Financial Reconstruction (BIFR). Further, the Company''s Board of Directors is required to report such erosion to its shareholders and the causes for such erosion at a general meeting of the shareholders of the Company specifically for this purpose.

Because of reasons set out in the Operational Review of this Report, the Company continued to incur the losses in the 2012-2013 fiscal year. The Company''s adverse financial results over the last two years amounted to Rs. 1,179.6 millions (i.e. 2012- 13: Rs. 681.6 Millions and 2011-12: 498.0 Millions).

These recent operating losses have arisen from weak conditions for the Indian PFY sector, escalating year on year per unit costs of energy for electricity (18.5%) and furnace oil (13.9%), compounded by the relatively small scale of the plant, and overheads incurred during the time the plant operations were suspended to accommodate modifications and additions for manufacturing PFY from 100% post- consumer recycled PET bottles.

These production challenges are a primary reason that selling polyester filament yarn made from p- cPET as the primary feedstock has potential for higher margins. The Company is currently in the early phase of seeking to expand its recycling capacity at its Nashik plant so that it could be in a position to restore overall output of the Nashik plant''s PFY product and textile chips to up to 70 MTs per day.

18. ADDITIONAL INFORMATION ON DIRECTORS RECOMMENDED FOR APPOINTMENT / REAPPOINTMENT OR SEEKING ELECTION AT THE ANNUAL GENERAL MEETING AS PRESCRIBED UNDER THE LISTING AGREEMENT:

Mr. Subodh Maskara

Mr. Subodh Maskara is a Director, retiring by rotation and is eligible for re-appointment.

Mr. Subodh Maskara, aged 46 years is a Promoter of the Company and has around 22 years of experience in Polyester and Textile Industry. He has direct experience across diverse businesses such as electronics manufacturing services, telecom, publishing, oil & gas.By qualification he is MBA from J.L.Kellogg Graduate School of Management, USA

He is Director of Maskara Textiles Pvt. Ltd., Maskara Research and Development Pvt. Ltd., Maskara Filaments Pvt. Ltd. and Chhoti Production Company Pvt. Ltd.

He is also a member of the following committees of Polygenta: Shareholder Grievance and Share Transfer, Remuneration, CCPS Conversion, and Share Allotment Committee.

He holds 8.04.600 Equity Shares of Polygenta Technologies Limited.

Mr.Vinit Baid

Mr.Vinit Baid is a Director, retiring by rotation and is eligible for re-appointment. Mr. Vinit Baid, aged 39 years, has 15 years of business experience. He is a commerce graduate and an Independent Director on the Board of Directors.

He is a Director of Fuji Steel Industries Limited.

He is also a member of the following committees: Audit, Shareholder Grievance and Share Transfer, Remuneration, CCPS Conversion and Share Allotment Committee.

He holds 220 Equity shares of Polygenta Technologies Limited.

Mr. Anand Dua

Mr. Anand Dua has been appointed as an Additional Director effective 16th October 2012 pursuant to Section 260 of the Companies Act, 1956 read with Article 114 of the Articles of Association of the Company and holds office until the conclusion of the forthcoming Annual General Meeting.

Mr. Anand Dua, 51 years old, is a practicing

Chartered Accountant from New Delhi, having over 30 years of experience. His areas of Practice include Company Law, Tax Advisory, Audit Services, Project Financing and Investment Consulting.

He is a Director of Padmanabh Promoters Private Limited.

He is also a member of the following committees: Audit and Remuneration.

Mr. Marc Lopresto

Mr. Marc Lopresto was appointed as Wholetime Director for a period of three years with effect from 20th September 2010. His term of appointment ends on 19th September 2013.

Mr. Marc Lopresto, aged 57 Years has an MBA from Wharton (Finance and Strategy specialisation), and an AB in Economics (Honours) University of California, Berkeley. He has experience in M&A, restructuring and risk advisory, and project / venture capital fund raising.

He is also a member of the following committees: Audit, Shareholder Grievance and Share Transfer, CCPS Conversion, and Share Allotment.

Mr.Sarath Naru

Mr. Sarath Naru has been appointed as a Director liable to retire by rotation effective 14th August, 2013 pursuant to Article 110A of the Articles of Association of the Company and holds office until the conclusion of the forthcoming Annual General Meeting. He has been nominated for appointment by VenturEast Life Fund III.

Mr. Sarath Naru, 56 years old, is the Founder and Managing Partner of VenturEast, which has focussed on venture capital/private equity in India over the last dozen years. Ventur East manages about $300 million having made over 60 investments. At Ventur East, Mr. Naru has helped create one of the exceptional realised track records in India, and has successfully pioneered investments in new sectors and investing approaches that other fund managers have found sought to emulate.

Prior to this, he gained significant experience working for Procter & Gamble USA in the area of brand management (marketing and general management), and in manufacturing while with the British American Tobacco subsidiary VST Industries (Hyderabad). He has also built a trading business between India and the USA, covering engineering goods, fashion goods, and printing related services. His academic qualifications include, a Bachelor of Technology from the Indian Institute of Technology, Madras, and an MBA from the Booth School, University of Chicago.

He is the Director of the following companies: (1) UTI Venture Funds Management Co. Pvt. Ltd. (2)Ventureast Trust Capital (India) Private Limited

(3) Ventureast Fund Advisors India Private Limited

(4) Dynam Ventureast Private Limited (5) Elbit Medical Diagnostics Pvt. Ltd. (6) Equitas Housing Finance Private Limited (7) APIDC Venture Capital Private Limited (8) Sresta Natural Bioproducts Private Limited (9) Ventureast Social Investment Trustee Private Limited (10)Ventureast Micro-Equity Management Private Limited (11) Ascent Capital Advisors India Private Limited (12) e-Yantra Industries Private Limited (13) E2E Transportation Infrastructure Private Limited (14) Royal images and Catalogue Company Private Limited (15) Flow Edge Financial Solutions Private Limited and (16) Bharat Light Power.

He does not hold any shares of Polygenta Technologies Limited. To this date, VenturEast Life fund III also does not own any share in Polygenta.

19. ACKNOWLEDGEMENT

The Board wishes to place on record its appreciation for the valuable co-operation extended to the Company by its employees, governmental departments, lending institutions, bankers, suppliers, and its customers for their continued considerable support.

FOR AND ON BEHALF OF THE BOARD

Marc Lopresto Chairman

Place: Mumbai

Date :5th September 2013

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Mar 31, 2012

The Members of

Polygenta Technologies Limited,

The Directors take pleasure in presenting to you the Thirtieth Annual Report and Audited Accounts for the financial yearended 31st March 2012.

1. FINANCIAL RESULTS

Year Ended Year Ended 31st March 2012 31st March 2011 (Rs. in Millions) (Rs. in Millions)

Income from Operation 1,802.2 704.7

Profit /(Loss) before Depreciation & Interest (235.0) 86.9

Depreciation 131.7 40.4

Borrowing Cost 138.8 19.9

Profit/(Loss) before Exceptional Item (505.5) 26.6

Add : Exceptional Items 7.5 12.2

Profit/(Loss) before tax (498.0) 38.8

Less:Provision for Current Tax - 7.7

Less: Provision for Deferred Tax - (4.1)

Profit/(Loss) after tax (498.0) 35.2

Balance Loss b/f from previous year (2.2) (37.4)

Balance of Loss to be carried to Balance Sheet (500.2) (2.2)

2. OPERATIONS REVIEW

Polygenta has an operating license from PerPETual Global Technologies Limited (formerly known as AlphaPET Limited) ("PGTL") for the ReNEW process, a recycling technology for recycling post- consumer PET plastic bottles ("p-cPET") into high quality feedstock, which it uses to manufacturer polyester filament yarn. During the financial year 2011-12, the Nashik plant converted nearly 100 million p-cPET bottles into high quality yarn, with recycled content ranging from 15-20%. This marks significant progress toward the Company's goal to become a leader in this sustainable segment, generally insulated from the more commoditised segments of the polyester market.

During the last financial year 2011-12, the revenues from manufacturing and service operations were Rs. 1,803 million. However, the Company was not able to achieve positive margins. Factors contributing to operating losses included:

Below normal market price levels over raw material cost in the polyester filament yarn ("PFY") market due to poor macro-economic fundamentals and recent additions of significant capacity in the Indian PFY sector.

Being the first year of integrated operations with ReNEW technology, the management needed to de- bottleneck regularly the processes to improve plant efficiency. The Company is currently engaged in improving process efficiencies of its recycling unit and modifying and expanding its plant so that the recycled content of its PFY finished product can be significantly increased. PFY made from high blends of recycled PET feedstocks generally sells at much higher prices than comparable yarn made from standard petrochemical feedstocks, thereby providing scope for improved margins.

Health. Safety and Environment HSE") and Implementation of Key Process

The Nashik plant made significant progress in implementing systematically its HSE Management Systems ("HSE-MS"). The plant monitors its operations against Maharashtra Pollution Control Board and the World Bank-IFC standards for air emissions, wastewater effluent treatment, noise pollution and the provision of an Environmental Social Management System.

ISO Certification

End-customers that prefer sustainable inputs and supply chain partners generally require their suppliers to operate at high international standards. To ensure that Polygenta fulfils its own corporate credo and is positioned favourably in manufacturing and selling sustainable PFY, it has already implemented SAP and is working to become compliant with ISO 9000 (Quality); ISO 14000 (Environment) and OHSAS 18001 (Health and Safety) during the first halfofFY2012-13.

3. FINANCAL REVIEW:

During the financial year 2011-12, the Company was granted a working capital facility of up to Rs.200 million.

The Company's External Commercial Borrowing (ECB) lenders continued their support to the Company's implementation of the ReNEW process by agreeing a rescheduling of the repayment of Euros 15 million in principal outstanding and a deferral of select nearterm interest payments.

To increase and strengthen the capital base of the Company, its lead Promoter, PerPETual Global Technologies Limited (PGTL), agreed to invest Rs. 950 million in the form of Compulsory Convertible Preference Shares (CCPS). Necessary formalities are expected to be completed during the first quarter of the financial year2012-13.

4. DIVIDEND

Due to losses, the company is unable to declare dividend fortheyearended March 31st, 2012.

5. EXPORTS

During the year, Polygenta earned significant export revenue from the sale of PFY and Chips amounting to Rs. 150 million that helped establish its commercial position in international markets. The Company also earned approximately Rs 238 million by providing various operating, engineering and risk management services.

6. PARTICULARS OF EMPLOYEES

There are no employees who draw remuneration in excess of limits prescribed under section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended.

7. DISCLOSURE OF PARTICULARS RELATING TO ENERGY, RESEARCH & DEVELOPMENT ETC

Information as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo are given in Annexure T forming part of this report

8. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Fredrik Wijkander retires by rotation and being eligible, offers himself for re-appointment.

During the year under review, Ms.Vasantha Govindan, Nominee Director of Special Undertaking of Unit Trust of India resigned and was relieved from the post of Director.

9. DIRECTORS RESPONSIBILITY STATEMENT

The statement as required under Section 217 (2AA) of the Companies Act, 1956 is given in Annexure 'II' forming part of this Report.

10. AUDITORS AND AUDITORS REPORT

Statutory Auditors

M/s Lodha & Co, Auditors of the Company retire at the ensuing AGM and are eligible for reappointment. Members are requested to reappoint Auditors and to fix their remuneration.

Qualifications in Auditors'Report:

The qualifications given in the Auditor's report are self-explanatory and members are referred to a detailed explanation of these in Note 32 to the accounts.

11. FIXED DEPOSITS

The Company has not accepted / renewed any deposits from the public during the year.

12. INSURANCE

The Company has taken adequate insurance for its assets.

13. CORPORATE GOVERNANCE

Your Company has complied with the Corporate Governance requirements stipulated under Clause 49 of the Listing Agreement except in respect of the constitution of the Audit Committee and Board. The Report on Corporate Governance is annexed as Annexure ¦liribrming part of this Report.

14. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

The Management Discussion and Analysis Report, as required under the Listing Agreement with the Stock Exchange, is annexed as Annexure 'IV forming part of this Report.

15. INDUSTRIAL RELATIONS

Cordial industrial relations continued to prevail throughout the financial year under review.

16. MEGA-PROJECT STATUS

The Nashik project has qualified for mega project status in Maharashtra on the basis of making a capital investment of Rs. 250 Crores, as specified by the government of Maharashtra, in relation to the Nashik site for the manufacture of POY and DTY. Once the Company has completed making the full Rs. 250 Crores investment, it expects to begin receiving financial benefits including exemption from prescribed taxes and duties under the mega project program.

17. ADDITIONAL INFORMATION ON DIRECTORS RECOMMENDED FOR APPOINTMENT / REAPPOINTMENT OR SEEKING ELECTION AT THE ANNUAL GENERAL MEETING AS PRESCRIBED UNDER THE LISTING AGREEMENT:

Mr. Fredrik Wijkander, aged 49 years, has a degree in Mechanical Engineering from Stockholm Technical Institute. He is a Senior Investment Manager for Swedfund International AB (Swedfund) and was appointed by Swedfund and the Finnish Fund for Industrial Cooperation Ltd. to be the Nominee Director representing the ECB lenders on the Board of Directors. Mr Wijkander has considerable experience in Europe and emerging markets in marketing, financial, legal, investment banking and environmental and ethical due diligence.

He is a Director in NS India Holding AB, Vattenfall Biomass Liberia AB, SIA Troll Nursery, Latvia, and is a Board Observer on Vietstar JSC, Vietnam. He does not hold any shares in Polygenta. He is not a committee member of any committee of Board of Directors of Polygenta.

18.ACKNOWLEDGEMENT

The Board wishes to place on record its appreciation of the valuable co-operation extended to the Company by the employees of the Company, governmental departments, lending institutions, bankers, suppliers, and customers for their continued considerable support.

FOR AND ON BEHALF OF THE BOARD

Subodh Maskara Chairman

Place: Mumbai Date : 30th May 2012

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Mar 31, 2010

The Directors have pleasure in presenting to you the Twenty-Eighth Annual Report and Audited Accounts for the accounting year Fifteen Months ended March 31, 2010.

1. Financial Results Jan 09-Mar10 Apr 08-Dec 08 (15 Months) (9 Months) Rs. Rs.

Income from Operation

Profit /(Loss) before

Depreciation & Interest 34,293,723 (27,389,081)

Less: Depreciation 31,821,408 19,450,143

Less: Borrowing Cost 8,124,721 4,241,166

Profit / (Loss) before tax (5,652,406) (51,080,390)

Less: Provision for Deferred Tax 49,095,669 (141,589,044)

Less: Provision for Wealth Tax 92,000 200,000

Less: Provision for Fringe Benefit Tax 455,841 632,313

Profit/(Loss) after tax (55,295,916) 89,676,341

Less: Exceptional Items - 25,087,272

Profit/(Loss) after Exceptional item (55,295,916) 64,589,069

Balance of loss b/f from previous year (156,969,645) (221,558,714)

Balance of Loss (212,265,561) (156,969,645)

Less : Reduction in Share Capital as a result of Capital Reduction 174,862,700 -

Carried to Balance Sheet (37,402,861) (156,969,645)

The Company has changed its financial year from Year Ending in December to Year Ending in March to align the Companys financial year to the tax audit period, i.e. April to March. Accordingly, the above results are for the 15 months period ended 31 March 2010.

2. Dividend

In view of the loss before tax during the fifteen month period and carried forward losses your Directors do not recommend declaration of dividend for the fifteen months period ended March 31,2010

3. De-registration from the BIFR

We are pleased to inform Members that the Company is out of BIFR as a result of its one-time settlement with secured creditors and capital restructurings. The Companys positive net worth status was restored in its balance sheet ending 31st December 2008. The Company elected to petition for de-registration from the BIFR (on the basis that the BIFR ceases to have jurisdiction over companies with a positive net worth). The Companys petition was accepted and it was released from the BIFRs jurisdiction in July 2009 (vide AAFIR order dated 29/07/09).

4. Project Status Of Indias First Fully Integrated Eco-friendly Sustainable Polyester Filament Yam(PFY) Plant

Presently, the Nashik plant is the first fully integrated, eco-friendly sustainable PFY plant in India. The project will be commissioned on a fully integrated basis by Q3,2010-11.

Not with standing the relatively modest scale of the Nashik Plant, state-of-the-art capital equipment provides favourable operating efficiencies (e.g. utilities consumption) and the integrated plant configuration provides further savings versus industry convention (e.g. avoiding packing and freight costs associated with shipping products between chip, spinning and texturising stage manufacturers). The plant has the technological flexibility to operate both on a stand-alone virgin basis and with the added benefit of operating the ReNEW unit which provides reprocessed PET bottles as a partial substitute for the petrochemicals, PTAandMEG.

The Company is proceeding with a stage-wise process implementation for the plant and has successfully done trial runs for two stages:

Stage Phase

Stage One Trial run of Feedstock preparation and DTY texturising machines

Stage Two Trial run of the Polycondensation unit

Stage Three Trial run with ReNEW Plant

Stage Four Fully-integrating all production units

5. Exports

During the year, Polygenta made progress in developing export clientele with its trial production run that will help in building a brand image for our company within international market.

7. Disclosure of Particulars

Information as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy research and development, technology absorption, foreign exchange earnings and outgo, are given in Annexure T forming part of this report.

8. Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Amit Haria retires by rotation and being eligible, offers himself for re-appointment.

During the year under review, Mrs.Manju Jain was appointed as Nominee Director of IFCI Limited, and Mr Fredrik Wijkander was appointed as Nominee Director of ECB Lender, Swedfund International AB, Sweden.

9. Directors Responsibility Statement

The statement as required under Section 217 (2AA) of the Companies Act, 1956 is given in Annexure II forming part of this Report.

10. Auditors

M/s Lodha & Co, Auditors of the Company retire at the ensuing AGM and are eligible for reappointment. Members are requested to reappoint Auditors and to fix their remuneration.

11. Auditors Qualification

The qualifications given in the Auditors report are self explanatory and are further explained in detail in the notes to accounts given in schedule 16 and therefore do not call for any other comments.

12. Fixed Deposits

The Company has not accepted / renewed any deposits from the public during the year.

13. Insurance

The Company has insured its assets with insurance companies adequately.

14. Corporate Governance

Your Company has complied with the Corporate Governance requirements stipulated under Clause 49 of the Listing Agreement. The Report on Corporate Governance is annexed as Annexure III forming part of this Report.

15. Management Discussions And Analysis Report

Management Discussion and Analysis Report as required under the Listing Agreement with the Stock Exchange is annexed as Annexure IV forming part of this Report.

16. Industrial Relations

Cordial Industrial relations continued to prevail throughout the financial year under review.

17. Mega-Project Status

We have pleasure in informing that the Nashik project has been recently qualified for mega project status in Maharashtra for the manufacture of POY and DTY. The benefits in terms of Electricity duty, Stamp duty and Value added tax are expected to commence upon Polygenta starting commercial production and to accrue over the next seven years.

18. ISO Certification

End-customers that prefer sustainable suppliers generally require suppliers to operate at high international standards To ensure that Polygenta fulfils its own corporate credo and is positioned favourably in manufacturing and selling sustainable polyester, it has already implemented SAP and is working to become compliant with ISO 9000 (Quality); ISO 14000 (Environment) and OHSAS 18001 (Health and Safety) during 2010-11. As part of its investment agreements with its investors, Polygenta has also undertaken to fulfil all core ILO conventions and meet the more stringent of Indian and IFC (World Bank) environmental standards.

19. ECB Loans

In March 2009, under difficult credit market conditions, Polygenta secured a mandate for a Euros 15 million (Rs 104 Crores) five year weighted average maturity ECB loan financing from European Development Finance institutions.

20. Acknowledgement

The Board wishes to place on record its appreciation of the valuable co-operation extended to the Company by the employees of the Company, Government Departments, Lending Institutions, Bankers, Suppliers and Customers for their support in the times of difficulty faced by the Company.

FOR AND ON BEHALF OF THE BOARD

SANTOSH KUMAR MASKARA

CHAIRMAN

Place: Mumbai Date: 28.05.2010