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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Directors Report of Sarla Performance Fibers Ltd.

Mar 31, 2025

Your directors are pleased to present the Thirty Second (32^nd) Annual Report along with the Audited Standalone and Consolidated Financial Statements of the Company for the financial year ended March 31, 2025 (âthe year under reviewâ).

1. Financial Results

The summary of the Company''s Standalone and Consolidated Financial Performance for the financial year ended March 31, 2025, is as under:

(Rs in Lakhs)
Particulars	Standalone		Consolidated
	2024-25	2023-24	2024-25	2023-24
Revenue from Operations	42,366.67	38,217.12	42,710.09	38,326.12
Other Income	2,439.45	2,039.30	2,518.92	2,093.94
Total Income	44,806.12	40,256.42	45,229.01	40,420.06
Profit Before Interest, Depreciation & Tax	10,567.62	7,859.30	11,452.46	7,878.46
Finance Cost	1,064.42	581.00	1,064.42	581.00
Depreciation & amortization expenses	2,431.86	2,329.55	2,502.16	2,789.21
Profit before Tax & Exceptional Items	7071.34	4,948.75	7,885.88	4,508.26
Exceptional Items- Income / (Expenses)	(440.00)	-	-	-
Profit before Tax	6,631.34	4,948.75	7,885.88	4,508.26
Less: Provision for Tax
Current Tax	2,088.16	1,135.81	2,091.09	1,138.50
Deferred Tax	(458.00)	79.78	(458.00)	79.78
Adjustments for earlier years	16.86	17.92	16.86	17.92
Net Profit for the year	4,984.31	3,715.24	6,235.92	3,272.06
Other Comprehensive Income	(1.45)	32.63	(81.09)	48.50
Total Comprehensive Income	4982.86	3,747.87	6154.84	3,320.56
Earning per share
Basic and Diluted earning per share-Before Exceptional Item	6.50	4.45	7.47	3.94
Basic and Diluted earning per share-After Exceptional Item	5.97	4.45	7.47	3.94

2. Performance Overview

During the year under review, SARLA continued to strengthen its position as a trusted yarn supplier to leading international brands, leveraging a balanced approach of direct sales and established intermediary networks. In FY 2024-25, approximately 72 % of the Company''s revenue was generated from long-standing clients with relationships extending beyond five yearsâunderscoring its commitment to customer-centricity and quality-driven growth.

This performance was supported by a diversified product portfolio, robust customer relationships, and a favorable policy environment, including supportive tariff structures that enhanced India''s competitiveness as a sourcing hub. Global sourcing dynamics continued to evolve in response to tariff escalations and geopolitical realignments, positioning India as a preferred destination due to its stable policy framework and integrated manufacturing capabilities.

Performance Highlights

During the year under review, the Company recorded Standalone Revenue from Operations of ''42,366.67 Lakhs for FY 2024-25 as against '' 38,217.12 Lakhs in FY 2023-24, reflecting a change of 10.86% primarily attributable to prevailing market conditions and global demand fluctuations.

The Consolidated Revenue from Operations for FY 2024-25amountedto''42,710.09 Lakhs, asagainst '' 38,326.12 Lakhs in FY 2023-24, registering a year-on-year increase of 11.44%.

The Value of Exports stood at '' 22,793.54 Lakhs for FY 2024-25, as compared to '' 21,071.50 Lakhs for the FY 2023-24 on Standalone and Consolidated basis.

Profit before Interest, Depreciation and Tax (PBIDT) was '' 10,567.61 Lakhs for the year, as compared to '' 7,859.30 Lakhs in the previous financial year on a Standalone Basis.

Profit before Interest, Depreciation and Tax (PBIDT) was '' 11,452.45 Lakhs for the year, as compared to '' 7,878.46 Lakhs in the previous financial year on a Consolidated Basis.

3. Dividend

Your directors are pleased to recommend a final dividend of '' 3.00 (300%) per Equity Share of face value ''1.00 each for the financial year ended March 31, 2025.

The Board has recommended a Final Dividend for the financial year ended March 31, 2025, after careful consideration of the Company''s profitability, internal capital requirements for ongoing expansion projects, and its overall financial position, with a view to maintaining a balanced approach to rewarding shareholders.

The proposed dividend, if approved by the members at the ensuing Annual General Meeting, will result in a total outflow of ''1079.82 Lakhs (including applicable taxes, if any).

The Company has also received letters from all shareholders forming part of the Promoter and Promoter Group, voluntarily waiving their right to receive the said dividend."

4. Transfer to Reserves

The Board of Directors has not proposed any transfer to the General Reserve for the financial year ended March 31, 2025. The entire earnings for the year under review, after payment of the dividend, are proposed to be retained in the Profit & Loss Account to support future

business expansion and strategic initiatives. This approach will strengthen the Company''s financial position and enhance its ability to invest in growth opportunities, including capacity expansion, technological upgradation, and potential strategic investments.

5. Share Capital

There has been no change in the Share Capital of the Company during the year under review.

As on March 31, 2025 -

? The authorized share capital of the Company stood at ''1,000.00 Lakhs, divided into 10,00,00,000 Equity Shares of ''1/- each.

? The paid-up Equity Share Capital of the Company stood at ''835.03 Lakhs, comprising 8,35,03,000 Equity Shares of face value ''1/- each, fully paid-up.

The Company has not issued any Equity Shares with differential voting rights, nor has it issued any shares (including sweat equity shares) to its employees under any scheme during the year under review.

However, the Sarla Performance Fibers Limited Employee Stock Option Plan (ESOP) Scheme 2025 was approved by the Board of Directors at its meeting held on January 30, 2025. The said scheme was subsequently approved by the Members of the Company through a Postal Ballot vide Notice dated January 30, 2025, in accordance with the provisions of the Companies Act, 2013 and the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The Scheme aims to reward and retain eligible employees of the Company and its present and future subsidiaries.

No options have been granted under the Scheme as on March 31, 2025.

6. Deposits under Chapter V of Companies Act, 2013

The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.

Accordingly, the disclosures required under Chapter V of the Companies Act, 2013 and the Rules made thereunder are not applicable.

Further, as on the financial year ended March 31, 2025, there were no deposits remaining unpaid or unclaimed, nor any default in repayment of deposits or payment of interest thereon.

7. Promoters

Incorporated in 1993, your Company was established as a family-driven enterprise and has since evolved into a professionally managed, publicly listed entity. Sarla Performance Fibers Limited today exemplifies a harmonious blend of promoter stewardship, professional governance, and the rigor of listed company compliance, earning industry-wide respect for its focus on quality, integrity, and long-term sustainability.

As on March 31, 2025, the Promoters of the Company are:

? Mrs. Sarladevi Madhusudan Jhunjhunwala

? Mr. Krishna Madhusudan Jhunjhunwala

Mr. Krishna Madhusudan Jhunjhunwala continues to hold a key promoter position and plays an active role in the strategic oversight and value-driven growth of the Company.

8. Change in the Nature of Business

During the year under review, there was no change in the nature of business of the Company. Your Company continues to operate in its core sectors of Textiles, Wind Power Generation, and Manufacturing, maintaining its strategic focus and operational efficiency in each of these segments.

The Company remains engaged in the production and global export of a diverse range of products, including High-Performance Yarn, Textured Polyester Yarn, Textured Nylon Stretch Yarn, High-Bulk Textured Polyester Yarn, Sewing Threads, Specialty Sewing Threads, High-Tenacity Covered Dyed Yarns and Threads, and Barre-Free Nylon Yarn. These products cater to both domestic and international markets and have been integral to reinforcing the Company''s reputation as a quality-oriented and innovation-driven player in the global textile industry.

9. Subsidiaries, Joint Ventures and Associate Companies

As on March 31, 2025, the Company has a total of six overseas subsidiaries (both direct and indirect), comprising two wholly owned subsidiaries and four step-down subsidiaries, along with three overseas Joint Ventures.

The Company does not have any Indian Subsidiary, Joint Venture, or Associate Company. There has been no material change in the nature of business of the subsidiaries and joint ventures during the year under review.

In accordance with the provisions of Section 136 of the Companies Act, 2013, the Annual Report

of the Company, which includes both Standalone and Consolidated Financial Statements, is available on the Company''s website at www. sarlafibers.com. As per the applicable provisions, the Annual Financial Statements of each of the subsidiary companies are also hosted on the same website and are not being annexed to this Annual Report. Shareholders desirous of obtaining a copy of the audited financial statements of the subsidiary companies may request the same by writing to the Company Secretary & Compliance Officer.

The Policy for Determining Material Subsidiaries, as approved by the Board of Directors pursuant to Regulation 16(1)(c) of the SEBI (LODR) Regulations, 2015, is also available on the Company''s website and can be accessed at: https://www.sarlafibers.com/wp-content/ uploads/2024/01/12.-Policy-for-Determining-Material-Subsidiary.pdf

Further, a statement containing the salient features of the financial statements of subsidiaries, associates, and joint ventures in Form AOC-1, as prescribed under the Companies Act, 2013, forms part of this Board Report as Annexure I. The details of subsidiaries and joint ventures are also provided in the Annual Return of the Company, available on the Company''s website.

10. Companies which have become or ceased to be its Subsidiaries, Joint Ventures or Associate Companies during the Financial Year.

During the financial year under review, no company has become or ceased to be a Subsidiary, Joint Venture, or Associate Company of Sarla Performance Fibers Limited.

The structure of subsidiaries and joint ventures remained unchanged throughout the year, with continued operations through the existing overseas entities.

11. Consolidated Financial Statement

The Consolidated Financial Statements of the Company and its subsidiaries for the financial year ended March 31, 2025 have been prepared in accordance with the applicable provisions of the Companies Act, 2013, including the Companies (Accounts) Rules, 2014, and as per the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

The consolidated results also comply with the disclosure requirements under Regulation 33 of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 (âSEBI Listing Regulationsâ). These statements present the consolidated performance of the Company along with its Subsidiaries, Joint Ventures, and Associates, as applicable.

In accordance with Regulation 34 of the SEBI Listing Regulations, the Audited Consolidated Financial Statements, along with the Independent Auditors'' Report thereon, form an integral part of this Annual Report and are also made available on the Company''s website at www.sarlafibers.com.

12. Particulars of Loans, Guarantees and Investments

During the year under review, the Company has complied with the provisions of Section 186 of the Companies Act, 2013 in respect of loans, guarantees and investments.

Further details regarding loans, guarantees and investments, as required under Section 186 of the Act and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are provided in the notes to the financial statements.

13. Directors

As on March 31, 2025, the Board of Directors of the Company comprised 6 (six) Directors, including 3 (three) Executive Directors and 3 (three) Non-Executive Independent Directors, with 1 (one) Woman Director in compliance with Section 149 of the Companies Act, 2013 and Regulation 17 of SEBI (LODR) Regulations, 2015.

Appointment, Re-appointment, Cessation and Ratification during the Year under Review

a. Cessation of Mr. Parantap Dave (DIN: 00019472)

In accordance with the provisions of Section 149(10) of the Companies Act, 2013, Mr. Parantap Dave, Independent Director, completed his second consecutive term of five years on August 08, 2024. The Board places on record its deep appreciation for the valuable insights, support, and contributions made by Mr. Dave during his tenure with the Company.

b. Cesignation of Ms. Shreya Desai (DIN: 08041995)

Ms. Shreya Desai, Independent Director, tendered her resignation from the Board with effect from September 30, 2024. The Board expresses its gratitude for her contribution and the guidance she

provided during her tenure as a Director of the Company.

c. Ce-appointment of Mr. Paulo Manuel Castro (DIN: 08459844)

The Board, at its meeting held on May 10, 2024, approved, subject to shareholder approval at the 31st Annual General Meeting, the re-appointment of Mr. Paulo Manuel Castro as a Non-Executive Independent Director for a second term of five years, from May 23, 2024, to May 24, 2029, pursuant to the provisions of Section 149 and 152 of the Companies Act, 2013 and applicable provisions of SEBI LODR Regulations. The shareholders, at the AGM, approved this re-appointment by an overwhelming majority.

d. Ce-designation and Re-appointment of Mr. Krishna Jhunjhunwala (DIN: 09507192)

The Board, at its meeting held on May 10, 2024, approved the re-designation and reappointment of Mr. Krishna Jhunjhunwala as the Chairman and Managing Director of the Company for a term of five years, effective from October 1, 2024, to

September 30, 2029, along with approval of remuneration for the period from October 1, 2024, to September 30, 2027, in accordance with Sections 196, 197, 198, and 203 of the Companies Act, 2013 and Schedule V thereto. The shareholders approved this re-designation and reappointment at the 31^st Annual General Meeting.

e. Ce-designation of Mr. Sachin Shashikant Abhyankar (DIN: 02760746)

The Board, at its meeting held on June 24, 2024, approved, subject to shareholder approval at the 31st Annual General Meeting, the re-designation of Mr. Sachin Shashikant Abhyankar as a Non-Executive Independent Director, for a term of five (5) years commencing with effect from June 24, 2024, to June 23, 2029. The shareholders, at the AGM, approved this re-designation by an overwhelming majority.

f. Catification of Appointment of Mr. Bharat K. Jhamvar (DIN: 00211297)

The Members of the Company, at the 30th Annual General Meeting held on September 21, 2023, considered and approved the appointment of Mr. Bharat K. Jhamvar as a Non-Executive Independent

Director, effective from August 10, 2023, for a term of 5 (five) years up to August 9, 2028, not liable to retire by rotation.

However, pursuant to Regulation 25(2A) of the SEBI (LODR) Regulations, 2015, the appointment of an Independent Director of a listed entity is required to be approved by way of a Special Resolution. Accordingly, the Board recommended the ratification of Mr. Bharat K. Jhamvar''s appointment by way of a Special Resolution, as set out in Item No. 6 of the Notice of the 31st Annual General Meeting. The shareholders, at the AGM, ratified the appointment of Mr. Jhamvar by a special resolution.

Retirement by Rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Ms. Neha Jhunjhunwala (DIN: 07144529), Executive Director, retires by rotation at the ensuing 32^ndAnnual General Meeting of the Company. Being eligible, he offers himself for re-appointment.

The disclosures required pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the Secretarial Standards on General Meeting (''SS-2'') are provided in the Notice of the AGM, which forms part of the Annual Report.

Ms. Neha Jhunjhunwala is not debarred from holding the office of Director pursuant to any Order issued by the Securities and Exchange Board of India, Ministry of Corporate Affairs, Reserve Bank of India, or any other such authority.

The above proposal for re-appointment form part of the Notice of the 32^nd Annual General Meeting of the Company, and the relevant Resolution is recommended for members'' approval.

Declaration of Independence

Pursuant to the provisions of Section 149(7) of the Companies Act, 2013 and Regulation 16(1)(b) read with Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all Independent Directors of the Company have submitted their declarations confirming that:

? They meet the criteria of independence as laid down under the Companies Act, 2013 and SEBI Listing Regulations, as amended from time to time.

? They are not aware of any circumstance or

situation which exists or may be reasonably anticipated that could impair their ability to discharge their duties independently.

Further, in compliance with Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, all Independent Directors have confirmed registration with the Independent Directors'' databank maintained by the Indian Institute of Corporate Affairs (IICA) and have completed the online proficiency self-assessment test, wherever applicable.

The Board of Directors has taken on record the declarations submitted by the Independent Directors and, in its opinion, the Independent Directors fulfill the conditions specified in the Companies Act, 2013 and SEBI Listing Regulations and are independent of the management.

The Board further affirms that all Independent Directors possess integrity, relevant expertise, experience, and proficiency as required under applicable laws and corporate governance standards.

Letters of appointment/re-appointment have been issued to the Independent Directors in compliance with the provisions of the Companies Act, 2013, and in accordance with the terms and conditions of appointment applicable to Independent Directors of Sarla Performance Fibers Limited (the ''Company''). The same are available on the Company''s website at: https://www.sarlafibers.com/wp-content/uploads/2024/01/2.Terms-Conditions-for-appointment-of-ID.pdf

Familiarization Program for Independent Directors

In accordance with the requirements of Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has conducted familiarization programs for Independent Directors to enable them to understand their roles, rights, responsibilities in the Company, the nature of the industry in which the Company operates, and the business model of the Company.

The details of the familiarization program, including the number of sessions and hours spent by Independent Directors, are provided in the Corporate Governance Report forming part of this Annual Report and are also available on the Company''s website.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the performance of its Committees, and of the individual Directors.

The evaluation process was conducted based on criteria derived from the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017. The evaluation covered various aspects such as Board composition and structure, effectiveness of Board processes, Board culture, dynamics, and functioning, as well as the performance of individual Directors and the Committees of the Board.

The performance of the Board, its Committees, and individual Directors, including the Chairman, was found to be satisfactory. The Independent Directors expressed satisfaction with the overall functioning and effectiveness of the Board and its Committees, which demonstrated a high level of commitment, engagement, and governance.

14. Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company as on the date of this Report are:

? Mr. Krishna Madhusudan Jhunjhunwala,

Chairman & Managing Director

Mr. Krishna Madhusudan Jhunjhunwala

was re-designated and re-appointed as the Chairman and Managing Director of the Company with effect from October 1, 2024.

? Mr. Kanav Jhunjhunwala, Whole-Time

Director

Mr. Kanav Jhunjhunwala was re

designated from Executive Director to Whole-Time Director of the Company with effect from April 25, 2025, i.e., the date of the Board Meeting in which this Report is approved.

? Mr. Kayvanna Shah, Chief Financial Officer

Mr. Kayvanna Shah was appointed as the Chief Financial Officer of the Company with effect from June 24, 2024, in place of Mr. Mukesh Deopura, who resigned with effect from March 26, 2024.

? Mr. Kapil Raj Yadav, Company Secretary & Compliance Officer

Mr. Kapil Yadav is proposed to be appointed as the Company Secretary and Compliance Officer of the Company with effect from April 25, 2025, i.e., the date of the Board Meeting in which this Report is approved.

During the year under review and as on the date of this Report, the following changes occurred in the Key Managerial Personnel:

Chief Financial Officer (CFO)

? Mr. Kayvanna Shah was appointed as CFO with effect from June 24, 2024.

Company Secretary and Compliance Officer (CS)

? Ms. Radhika Sharma resigned with effect from September 13, 2024.

? Ms. Meena Bharat Jain was appointed with effect from December 10, 2024, and subsequently resigned with effect from March 31, 2025.

? Mr. Kapil Raj Yadav was appointed with effect from April 25, 2025.

15. Meetings of the Board

During the Financial Year ended March 31, 2025, seven (7) meetings of the Board of Directors were held on the following dates: April 27, 2024; May 10, 2024; June 24, 2024; July 29, 2024; October 28, 2024; December 10, 2024; and January 30, 2025.

The requisite quorum was present at all the meetings. The interval between any two consecutive Board meetings did not exceed one hundred and twenty (120) days, thereby complying with the requirements of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the applicable provisions of Secretarial Standard-1 (SS-1) issued by the Institute of Company Secretaries of India (ICSI).

Further details regarding the composition of the Board, attendance of Directors at the Board meetings, and other relevant disclosures are provided in the Corporate Governance Report, which forms part of this Annual Report.

16. Committees of Board

Pursuant to the provisions of the Companies Act, 2013, the rules framed thereunder, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company

has constituted the following statutory and nonstatutory committees of the Board:

? Audit Committee

? Nomination and Remuneration Committee

? Corporate Social Responsibility Committee

? Risk Management Committee

? Stakeholders'' Relationship Committee

? Finance and Investment Committee*

During the year under review, all recommendations made by the aforementioned Committees were accepted and approved by the Board.

* The Finance and Investment Committee was dissolved with effect from May 10, 2024, and was reconstituted again in the Board meeting dated April 25, 2025. Additionally, during the year, the remaining Committees were reconstituted to align with the changes in the managerial structure of the Company.

Details of the composition, terms of reference, and meetings of each Committee are provided in the Corporate Governance Report, which forms part of this Annual Report. The current structure of the reconstituted Committees is also available on the Company''s website at https://www.sarlafibers.com/

17. Listing of Securities

As on the date of this Report, the Equity Shares of the Company are listed on the following Stock Exchanges:

? BSE Limited

? National Stock Exchange of India Limited

The Company has duly paid the annual listing fees for the financial year 2024-25 to both the Stock Exchanges where its equity shares are listed.

18. Internal Financial Control System and their adequacy

The Company has in place adequate internal financial controls with reference to financial statements. These controls are commensurate with the size, scale, and complexity of its operations and are designed to provide reasonable assurance regarding the reliability of financial reporting, compliance with applicable laws and regulations, and the safeguarding of assets.

The operating effectiveness of these internal financial controls is periodically reviewed by

the management and the internal auditors, and corrective actions, if any, are undertaken promptly.

Further details on the internal financial control systems and their adequacy are provided in the Management Discussion and Analysis Report, which forms an integral part of this Annual Report.

19. Auditors

a) Statutory Auditors

The Members of the Company at the 29^th Annual General Meeting (âAGMâ) had re-appointed M/s. CNK & Associates LLP, Chartered Accountants, Mumbai (Firm Registration No.: 101961W) as the Statutory Auditors of the Company for a second term of five (5) consecutive years, to hold office from the conclusion of the 29^th AGM until the conclusion of the 34^thAGM of the Company.

Pursuant to the MCA Notification dated May 7, 2018, the requirement to ratify the appointment of Statutory Auditors at every AGM has been dispensed with and hence, no such resolution is being proposed at the ensuing 32^nd AGM.

M/s. CNK & Associates LLP have issued their reports on the standalone and consolidated financial statements of the Company for the financial year ended March 31, 2025. The Auditor''s Report does not contain any qualification, reservation, or adverse remark. The Notes to the Financial Statements referred to in the Auditor''s Report are self-explanatory and do not call for any further explanation or comments by the Board.

The Auditors have also confirmed compliance with the applicable RBI regulations on downstream investments, and no qualifications were made in this regard.

b) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed CS Swati Gupta, Practicing Company Secretary (C.P. No. 12245), to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2025.

The Secretarial Audit Report in Form MR-3 pursuant to Regulation 24A of the SEBI Listing Regulations for the year ended March 31, 2025, are annexed as Annexure - VI'' to this Report.

There were no qualifications, reservations, observations, or adverse remarks in the Secretarial Auditor''s reports.

The Company does not have any material subsidiary as per the definition under Regulation 16(1)(c) of the SEBI Listing Regulations.

c) Cost Auditor:

The Company has duly prepared and maintained cost records as prescribed under Section 148(1) of the Companies Act, 2013 for the financial year ended March 31, 2025.

The Cost Audit Report for the financial year 2024-25 is in progress and the report will be filed with the Ministry of Corporate Affairs, Government of India, within the statutory timeline.

The Board of Directors, on recommendation of the Audit Committee, had re-appointed M/s. Kasina & Associates, Cost Accountants

(Firm Registration No.: 104088), as Cost Auditors of the Company to conduct the audit of cost records for the financial year 2024-25, at its meeting held on June 24, 2024. Their remuneration was placed for ratification by the shareholders at the 31^stAGM of the Company and the said resolution was also approved by the shareholders.

Subsequently, based on the continued satisfactory performance, the Board at its meeting held on April 25, 2025, approved the re-appointment of M/s. Kasina & Associates as the Cost Auditors for the financial year 2025-26, subject to ratification of their remuneration by the Members at the 32^nd Annual General Meeting of the Company. The necessary resolution for ratification of remuneration is included in the Notice of the 32^nd AGM forming part of this Annual Report.

20. Reporting of Frauds

Pursuant to the provisions of Section 143(12) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Statutory Auditors have not reported any instance of fraud to the Audit Committee or board of the Company or to the Central Government during the financial year ended March 31, 2025.

21. Particulars of Employees and related Disclosures

In accordance with Section 197 of the Companies Act, 2013, and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details regarding remuneration and other disclosures are provided in Annexure - II to this Report.

A statement containing the particulars of employees as required under Section 197 of the Act, and Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is included as part of this Report.

As per the provisions of Section 136 of the Act, the Annual Report is being sent to the Members and other stakeholders entitled thereto, excluding the Statement containing particulars of employees. Any Member who wishes to obtain a copy of such details may request the Company Secretary at investors@sarlafibers.com.

22. Directorsâ Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirms that, to the best of their knowledge and belief, and according to the information and explanations obtained:

a. In the preparation of the annual accounts for the financial year ended March 31, 2025, the applicable accounting standards have been followed, along with proper explanations relating to material departures, if any.

b. Appropriate accounting policies have been selected and applied consistently, and judgments and estimates are made reasonably and prudently so as to give a true and fair view of the state of affairs of the Company as at March 31, 2025, and of the profit of the Company for that financial year.

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities.

d. The annual accounts for the financial year ended March 31, 2025, have been prepared on a âgoing concernâ basis.

e. Proper internal financial controls were devised, implemented and maintained to

ensure compliance with the provisions of all applicable laws and that such controls are adequate and operating effectively.

f. Proper systems were devised to ensure compliance with the provisions of all applicable laws, and such systems are adequate and operating effectively.

23. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

The particulars relating to 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 the Companies (Accounts) Rules, 2014, are annexed hereto as Annexure III to this Report.

24. Particulars of contracts or arrangements with Related Party Transactions

Pursuant to the Company''s Policy on Related Party Transactions, all contracts, arrangements, and transactions entered into with related parties during the financial year under review were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions with Promoters, Directors, or Key Managerial Personnel that could give rise to a potential conflict of interest.

In compliance with Section 188 of the Companies Act, 2013 and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

? All related party transactions were presented to the Audit Committee for its prior approval, including those covered under Section 188 of the Act.

? Omnibus approvals were obtained for transactions that are repetitive in nature and were foreseen in terms of the Audit Committee''s omnibus approval framework.

Details of the related party transactions as required under sub-section (1) of Section 188 of the Companies Act, 2013 are furnished in Form AOC-2, annexed as ''Annexure IV'' to this Report.

The Board-approved Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions is available on the Company''s website at: https^www.sarlafibers. com/wp-content/uploads/2024/01/14.Related-Party-Transaction-Policy.pdf

25. Corporate Social Responsibility

During the financial year 2024-25, the total CSR obligation of the Company, as per Section 135 of the Companies Act, 2013, amounted to ''91.92 lakhs.

Out of this, ''45.11 lakhs was available as a set-off from the CSR surplus accumulated in previous years, in accordance with the applicable provisions under the Companies Act, 2013 and CSR Rules. After adjusting this surplus, the net CSR amount required to be spent during the year stood at ''46.81 lakhs.

Against this net obligation, the Company spent ''53.15 lakhs on various CSR initiatives during FY 2024-25.

As a result, after accounting for the expenditure and adjustments, the Company has an excess CSR spend of ''6.34 lakhs at the end of the financial year. This excess amount will be carried forward and can be set off against CSR obligations in future years, as permitted under the CSR Rules.

The Company remains committed to its CSR objectives and ensures full compliance with the applicable laws, while undertaking impactful initiatives aimed at sustainable social development.

Corporate Social Responsibility (CSR) Committee and Policy

In compliance with Section 135 of the Companies Act, 2013, and the applicable rules, the Company has reconstituted its CSR Committee in light of recent changes in the management. The CSR Committee ensures that the Company''s CSR activities align with its values and commitments towards sustainable development and social welfare. Details of the Committee''s composition and its responsibilities are provided in the Corporate Governance Report, which forms part of this Annual Report for the financial year 2024-25.

The CSR Policy, approved by the Board based on the recommendations of the CSR Committee, outlines the framework for the Company''s CSR initiatives. The policy is available on the Company''s website and can be accessed via the following link: https://www.sarlafibers.com/.

CSR Activities for FY 2024-25

The Company has undertaken various CSR activities during the financial year 2024-25, in alignment with its corporate social responsibility goals. The detailed report on these CSR activities, as required under the Companies (Corporate

of Materiality for Disclosure of Events or Information was amended and approved by the Board at its meeting held on January 24, 2024. The Board also introduced quantitative thresholds for material events and information that require disclosure to the exchanges and investors. The updated Materiality Policy can be accessed on the Company''s website at this link.

28. Related Party Transaction Policy

Related Party Transactions (RPTs) play a crucial role in ensuring good governance and maintaining the integrity of listed entities. To safeguard the interests of all stakeholders and promote transparency, SEBI, under Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,

mandates that the Board of Directors review the Related Party Transaction (RPT) Policy at least once every three years or whenever there are updates to it.

In line with this requirement, the Board has reviewed and approved the recent amendments to the Related Party Transaction Policy. This updated policy is available on the Company''s website at https://www.sarlafibers.com/wp-content/uploads/2024/01/14.Related-Party-Transaction-Policy.pdf.

29. Whistle Blower / Vigil Mechanism Policy

The Company is committed to conducting its business with the highest standards of professionalism, integrity, and ethical behaviour. To further strengthen transparency and fairness, the Board of Directors has implemented a Whistle Blower/Vigil Mechanism Policy as per Section 177(9) of the Companies Act, 2013, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and Regulation 22 of the SEBI Listing Regulations. This mechanism provides safeguards against the victimization of Directors, employees, or any person who utilizes the mechanism to report unethical behavior or any actual or suspected fraud.

The Whistle Blower Policy is accessible on the Company''s website at https://www.sarlafibers. com/wp-content/uploads/2024/01/15-Whistle-Blower-Policy.pdf. It allows all Directors, Officers, and Employees of the Company to report any concerns related to unethical practices or fraud.

30. Code of Conduct for Prohibition of Insider Trading

The Company has implemented a Code of Conduct for Prohibition of Insider Trading to regulate, monitor, and report the trading of

Social Responsibility Policy) Rules, 2014, will be included as âAnnexure - Vâ to this Report. This annexure will provide a comprehensive overview of the projects undertaken and their impact during the year.

26. Corporate Governance Report and Management Discussion and Analysis Report

Your Company remains steadfast in its commitment to good corporate governance, aligning with the best practices in the industry and adhering to the standards set by the Securities and Exchange Board of India (SEBI) and the Stock Exchanges on which its securities are listed.

For the financial year ended March 31, 2025, the Company has fully complied with all applicable corporate governance requirements as prescribed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In accordance with Regulation 34(3) read with Schedule V of the said Regulations, a comprehensive report outlining the corporate governance practices adopted by the Company is annexed to this Annual Report as Annexure VII.

A certificate from Ms. Swati Gupta, Practicing Company Secretary (COP No. 12245), confirming compliance with the corporate governance norms and certificate of non-disqualification of directors under the SEBI Listing Regulations, is appended as annexure B and C to corporate governance Report.

Additionally, the Management Discussion and Analysis Report required under Regulation 34(2) of the SEBI Listing Regulations forms an integral part of Annual Report of the company.

27. Policy for Determining Materiality of Events

To enhance shareholder democracy and investor awareness, the Securities and Exchange Board of India (SEBI) introduced amendments to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 via a notification dated June 14, 2023. This notification introduced quantitative criteria for determining the materiality of events/information that need to be disclosed to investors and stock exchanges. SEBI also revised the list of events and information deemed material and required to be disclosed.

In compliance with these amendments, the Company aligned its policies with the updated provisions of the SEBI Listing Regulations. Accordingly, the Policy for Determination

securities by its Designated Persons. This Code ensures that employees do not engage in trading on the basis of Unpublished Price Sensitive Information (UPSI). It also lays down procedures for investigating any potential leakage of UPSI, along with the Code of Practices and Procedures for Fair Disclosure of UPSI.

The amended Code is available on the Company''s website at this link, and it provides the necessary framework for maintaining transparency and integrity in securities trading.

31. Compliance Management Framework

The Company has instituted a compliance management system to monitor compliance and provide updates to Senior Management/ Board on a periodic basis. The Board of Directors monitors the status of compliance with applicable laws on a quarterly basis.

Compliance with Secretarial Standards

During the financial year 2024-25, the Company has complied with all applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India.

Risk Management

The Company has an adequate Risk Management framework to identify, measure, manage, and mitigate business risks and opportunities. This framework seeks to create transparency, minimize adverse impacts on business strategy, and enhance the Company''s competitive advantage.

The risk framework helps in managing market, credit, and operational risks while quantifying potential impacts at the Company level. The details and the process of Risk Management as implemented in the Company are provided as part of the Management Discussion and Analysis, which forms part of the Annual Report.

The Risk Management policy of the Company is available on its website at https://www.sarlafibers. com/wp-content/uploads/2024/01/13.Risk-Management-Policy.pdf

Extract of the Annual Return

In accordance with the provisions of Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 and Rules framed thereunder, the annual return for the financial year 2024-25 is available on the website of the Company at https://www.sarlafibers.com/ reports/

32. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance towards sexual harassment at the workplace and has a policy on prevention, prohibition, and redressal of sexual harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, and the Rules thereunder. All women employees, whether permanent, temporary, or contractual, are covered under the above policy. The said policy has been uploaded on the website of the Company at https://www.sarlafibers.com/ wp-content/uploads/2024/01/POSH-Policy-Sarla.pdf and intimated to all female employees. An Internal Complaint Committee (ICC) has been set up in compliance with the Act and the rules framed thereunder to redress complaints received on sexual harassment.

During the year under review, no cases were received or resolved pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013.

33. Internal Financial Control Systems, their Adequacy and Risk Management:

Adequate Internal Financial Control systems, commensurate with the nature of the Company''s business, size, and complexity of its operations, are in place and have been operating satisfactorily and effectively. During the financial year under review, no material weaknesses in the design or operation of the Internal Financial Control system were reported.

The Company''s Internal Auditor monitors and evaluates the internal control system and submits quarterly reports, which are regularly placed before the Audit Committee of the Board for review and necessary action.

34. S ignificant and Material Orders passed by the Regulators or Courts:

During the financial year 2024-25, the Company paid a sum of ''359.85 lakhs, inclusive of interest and penalty, towards liabilities arising from the disallowance of input tax credit pursuant to an audit conducted by the GST authorities for the financial years 2018-19 to 2022-23. Except for the aforementioned matter, no significant order was passed by any Regulator, Court, or Tribunal during the financial year under review that would impact the going concern status of the Company or its future operations.

Update on GST Recovery Order

In the previous Financial Year, the Company received a recovery order from the GST Department amounting to ''643.51 lakhs, comprising ''585.01 lakhs towards tax and ''58.50 lakhs towards penalty, along with applicable interest. The said demand pertains to GST refunds availed on exports made under payment of IGST from the Company''s EOU unit for the financial years 2018-19 to 2021-22.

Based on legal advice, the Company has filed a writ petition before the Hon''ble Bombay High Court seeking a stay on the recovery proceedings. Concurrently, an appeal has been filed before the Appellate Tribunal, and the matter remains pending adjudication. The Company firmly believes that the refund claims were made in compliance with the applicable provisions of the GST law, and that the recovery order is not legally tenable.

35. Material changes and commitments, if any, affecting financial position have occurred between the end of the financial year of the Company and date of this report

There were no Material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report.

36. Credit Rating

During the financial year 2024-25, Acuite Ratings & Research Limited issued two credit rating updates for Sarla Performance Fibers Limited (SPFL):

1. February 3, 2025: Acuite downgraded SPFL''s long-term rating to ''ACUITE BB '' from ''ACUITE A-'' and the short-term rating to ''ACUITE A4 '' from ''ACUITE A2 ''. This downgrade was due to the company''s non-cooperation in providing necessary information, leading to the ratings being flagged as "Issuer Not Cooperating".

2. February 24, 2025: Acuite upgraded SPFL''s long-term rating to ''ACUITE A'' from ''ACUITE BB '' and the short-term rating to ''ACUITE A1'' from ''ACUITE A4 '' on the ''225.00 crore bank facilities. The outlook was marked as ''Stable''. This upgrade reflects the company''s improved cooperation and positive developments in its financial and operational performance.

Additionally, Acuite assigned new ratings for fresh bank facilities totalling ''112.00 crore, comprising ''47.00 crore in long-term facilities

rated ''ACUITE A'' with a ''Stable'' outlook and ''65.00 crore in short-term facilities rated ''ACUITE A1''.

These ratings indicate a high degree of safety regarding timely servicing of financial obligations and carry very low credit risk.

37. Investor Education and Protection Fund (IEPF)

During the financial year 2024-25, the Company transferred an amount of ''14,51,735 to the IEPF Authority, pertaining to the Final Dividend for FY 2016-17. Additionally, 25,655 underlying equity shares were also transferred to the IEPF Authority.

P rocess for Claiming Dividends and Shares from IEPF

Shareholders may reclaim their dividend and/ or shares transferred to the IEPF by submitting a duly filled Form IEPF-5 (available on www. iepf.gov.in) along with requisite documents. Upon verification, the Company will issue an Entitlement Letter to enable submission of the claim to the IEPF Authority.

It is to be noted that no claim shall lie against the Company in respect of the dividends or shares once transferred to the IEPF in accordance with applicable laws.

The table below provides details of outstanding dividends and their respective last dates for claim before transfer to IEPF:

Sr. No.	Financial Year	Date of Declaration	Last Date to Claim
1	2017-18 Final	28-09-2018	02-11-2025
2	2018-19 Final	27-09-2019	01-11-2026
3	2021-22 Final	28-09-2022	02-11-2029

38. Insurance

All the properties of the Company, including buildings, plant and machinery, and inventories, have been adequately insured during the financial year 2024-25 to safeguard against risks and contingencies.

a. There were no proceedings initiated or pending against the Company under the Insolvency and Bankruptcy Code, 2016 during the financial year 2024-25. Further, there were no instances of onetime settlement with any bank or financial institution during the year and therefore no details of Valuation in this regard is available

b. The equity shares of the Company continue to remain listed on BSE Limited and the National Stock Exchange of India Limited. The applicable listing fees for the financial year 2024-25 have been duly paid to both stock exchanges.

c. Pursuant to SEBI Circular No. SEBI/HO/ DDHS/CIR/P/2018/144 dated November 26, 2018, the Company does not fall under the category of âLarge Corporateâ as defined in the said circular. Furthermore, the Company has not raised any funds through the issuance of debt securities during the year under review.

39. Acknowledgement and appreciation

Your Board takes this opportunity to thank the Company''s Members, Customers, Vendors, and all other Stakeholders for their continued support throughout the financial year 2024-25. The Directors also express their sincere gratitude to the Stock Exchanges, Banks, Ministry of Corporate Affairs, State Governments, Government of India, and all other

regulatory and statutory authorities for their valuable guidance and support extended to the Company. The Board looks forward to their continued cooperation in the future as well.

Your Directors also wish to place on record their deep appreciation for the commitment, dedication, and efforts of employees at all levels, who have contributed to the sustained growth and performance of the Company.

Mar 31, 2024

Your Directors take immense pleasure in presenting the Thirty-First (31st) Annual Report, together with Audited Financial Statements for the financial year ended March 31, 2024 (âyear under reviewâ).

1. Financial Highlights

The Companyâs Financial Performance for the year ended March 31, 2024 is summarized below:

(Rs in Lakhs except EPS)

Particulars	Standalone		Consolidated
	2023-24	2022-23	2023-24	2022-23
Revenue from Operations	38,217.12	38,654.70	38,326.12	38,740.02
Other Income	2,039.30	923.05	2,093.94	987.52
Total Income	40,256.42	39,577.74	40,420.06	39,727.53
Profit Before Interest, Depreciation and Tax	7,859.30	6,556.91	7,878.46	6,670.59
Finance Cost	581.00	483.29	581.00	483.29
Depreciation and amortization	2,329.55	2,107.35	2,789.21	2,959.48
Profit before Tax and Exceptional Items	4,948.75	3,966.26	4,508.26	3,227.82
Exceptional Items-Income/(Expenses)	-	-	-	-
Profit before Tax	4,948.75	3,966.26	4,508.26	3,227.82
Provision for Tax
- Current Tax	1,135.81	1,119.45	1,138.50	1,123.95
- Deferred Tax	79.78	(128.74)	79.78	(128.74)
- Adjustments for earlier years	17.92	94.38	17.92	94.38
Profit after Tax (Net)	3,715.24	2,881.18	3,272.06	2,138.23
Other Comprehensive Income	32.63	27.96	48.50	182.96
Total Comprehensive Income	3,747.87	2,909.15	3,320.56	2,321.19
Earning Per Share (EPS)	4.45	3.45	3.94	2.56

2. Performance Overview

During the year under review, the company demonstrated resilience amid multiple industry challenges, including geopolitical tensions, fluctuating commodity prices, and persistent inflationary pressures. Despite these hurdles, there was merely slight deep in the revenue, primarily due to slight pressure on realisations in the global market, which was offset by volume growth. The last quarter of the financial year has been particularly encouraging, showing strong recovery trends. The market is gradually absorbing previously accumulated inventory, consumer confidence is rising, inflationary pressures are easing, and commodity prices have stabilised. Thus, we anticipate that next year will be a strong year for the Company, given the promising outlook. The company remains focused on increasing the share of value-added products, which will drive realisation and profitability. We are committed to growing the business while maintaining a healthy operating margin and a prudent capital structure. During the year under review, the company set up a new plant adjacent to our existing facility at Silvassa. Additionally, the Company strategically shifted from an Export Oriented Unit (EOU) to a Domestic Tariff

Area (DTA) for the Silvassa plant, which will enhance

profitability through higher export incentives.

? Standalone Sales of the Company were Rs. 38,217.12 Lakhs for FY 2023-24 as compared to Rs. 38,654.70 Lakhs for FY 2022-23 witnessing a decrease of 1.13% due to the prevalent market conditions.

? Consolidated Sales of the Company for FY 2023-24 were Rs. 38,326.12 Lakhs as against Rs. 38,740.02 Lakhs in the previous year i.e. FY 2022-23 thereby registering a decrease of 1.06%

? Value of Export stood at Rs. 21,071.50 Lakhs for FY 2023-24 as compared to Rs. 19,889.52 Lakhs for FY 2022-23 on standalone & consolidated basis.

? Considerate increase of 8.85% by Sale of Wind Power to Rs. 569.07 Lakhs from Rs. 524.27 Lakhs.

? Profit before Interest, Depreciation & Tax was Rs. 7,859.30 Lakhs as compared to Rs. 6,556.91 Lakhs in the previous year on a standalone basis.

? Profit before Interest, Depreciation & Tax was Rs. 7,878.46 Lakhs as compared to Rs. 6,670.59 Lakhs in the previous year on consolidated basis

3. Dividend

In order to conserve the resources of the Company by taking into account the prevailing economic situation and the need of resources for growth, the Board of Directors of the Company have not recommended any dividend on the Equity Shares of the Company for the Financial Year ended March 31, 2024.

4. General Reserves

There is no amount proposed to be transferred to Reserves out ofprofits for the financial year 2023 -24.

5. Share Capital

There has been no change in the Share Capital of the Company during the year under review. As on March 31, 2024 the paid-up share capital of your Company stood at Rs. 835.03 Lakhs comprising of 83,503,000 Equity Shares of Re. 1/- each fully paid.

The Company has, during the year under review, neither issued any Equity Shares with differential voting rights nor any shares (including sweat equity shares) to its employees under any scheme.

6. Deposits under Chapter V of Companies Act, 2013

The Company has not accepted any Deposit covered under Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details relating to deposits covered under Chapter V of the Act or the details of deposits which are not in compliance with Chapter V of the Act is not applicable.

7. Promoters

Incorporated in 1993, your Company is founded on the ethos of a closely knit family run business enterprise. Sarla represents a balance of family promoters, professional management and listed discipline, enjoying respect for quality, credibility and sustainability. At present, Mr. Krishnakumar M. Jhunjhunwala is holding the Key Promoter position in your Company.

8. Change in the Nature of Business

There is no change in nature of business of the Company. Your company continues to operate in the business segments of Textiles, Wind Power Generation and Manufacturing through production and global export of High-Performance Fibers, textured Polyester Yarn, Textured Nylon Stretch Yarn, High Bulk Textured Polyester Yarn, Sewing Thread, Specialty Sewing Threads, High-Tenacity Covered Dyed Yarns and Threads.

9. Extensive Network

As of March 31, 2024, your Company, along with its Subsidiaries/Associates/Joint Venture Companies, as the case may be, continues to grow in the South American markets, acting as lead manufacturers in hosiery and apparel applications.

10. Subsidiaries, Joint Ventures and Associate Companies

As on March 31, 2024, the Company has 6 overseas subsidiaries (direct and indirect) comprising of 2 wholly owned; 4 step down subsidiaries and 3 overseas Joint Ventures. The Company does not have any Indian Subsidiary / Joint Venture / Associate Company.

There has been no material change in the nature of the business of the subsidiaries. The Policy for determining material subsidiaries as approved may be accessed on the Companyâs website at https://www. sarlafibers.com/wp-content/uploads/2024/01/12.-Policy-for-Determining-Ma.teria.l-Subsidia.ry.pdf

Details of the Subsidiaries and Associates of the Company are mentioned in the Annual Return hosted on the website of the Company.

In accordance with the provisions of the Section 136 ofthe Companies Act, 2013, the Annual Report ofthe Company, containing therein its Standalone and the Consolidated Financial Statements has been placed on the website ofthe Company, www.sarlafibers.com. Further, as per the proviso of the said section, Annual Financial Statements of each of the subsidiary companies have also been placed on the website of the Company at www.sarlafibers.com. Accordingly, the said documents are not being attached to the Annual Report. Shareholders interested in obtaining the copy of the Annual Financial Statement of subsidiaries companies may write to the Company Secretary & Compliance Officer of the Company.

A statement containing the salient features of the Financial Statements of Subsidiaries, Associates and Joint venture as per the provisions of the Companies Act, 2013, in the prescribed Form AOC-1 is included in the Annual Report.

11. Companies which have become or ceased to be its Subsidiaries, Joint Ventures or Associate Companies during the Financial Year

During the financial year under review, there were no additions in the subsidiaries, or associate companies. There were no Companies which ceased to be Subsidiary/Associates/Joint Ventures of the Company.

12. Consolidated Financial Statement

The Consolidated Financial Statements of the Company and its Subsidiaries for the Financial Year 2023-24 are prepared in compliance with the applicable provisions of the Act and as stipulated under Regulation 33 of the Listing Regulations, as well as in accordance with the Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Accounts) Rules, 2014 of the Companies Act, 2013 (âthe Actâ). The Consolidated Financial Statement reflects the results of the Company and that of its Subsidiary/ Associates/ Joint Ventures. As required under Regulation 34 of SEBI Listing Regulations, the

Audited Consolidated Financial Statement together with the Independent Auditorsâ Report thereon, forms part of this Annual Report and is also available on the website of the Company.

13. Particulars of Loans, Guarantees and Investments

The particulars of Loans, Guarantees are given in the Corporate Governance Report which forms part of the Annual Report. Further details of the loans, guarantees and investments, as required under Section 186 of the Act and Schedule V of the SEBI Listing Regulations, are also provided as part of the notes to the financial statements of the Company.

14. Directors

As on March 31, 2024, the company had Eight (8) directors on Board, comprising of Three (3) Executive Directors and Five (5) Non-Executive Directors out of which Four (4) are Independent Directors. Further there are Two (2) woman directors on Board amongst the 8.

Appointment and Re-appointment

In accordance with the provisions of Section 152, the Company appointed Mr. Sachin Shashikant Abhyankar (DIN:02760746) as the Non-Executive Non-Independent Director of the Company with effect from August 10, 2023.

Further, as per Section 149, 150, 152, 161, Schedule IV read with other Rules applicable thereunder, Mr. Bharat Jhamvar (DIN: 00211297) was appointed as an Additional Independent Director of the Company with effect from August10, 2023. Your Board proposed and thereby Members regularized his appointment and appointed Mr. Bharat as an Independent NonExecutive Director of the Company under Section 149 and 161(1) of the Act for a term of Five (5) Years, from August 10, 2023 to August 9, 2028, not liable to retire by rotation at the Annual General Meeting of the Company held on September 21, 2023 by way of an Ordinary Resolution.

However, pursuant to Regulation 25(2A) of the SEBI (LODR) Regulations, 2015 appointment of an Independent Director of a listed entity shall be subject to the approval of shareholders by way of a Special Resolution. Accordingly, your Board has recommended to the Members, ratification for appointment of Mr. Bharat Kishore Jhamvar as the Independent Director of the Company, on same terms and conditions and tenure, via Special Resolution at the ensuing Annual General Meeting.

Post March 31, 2024, the following are the key changes during the Financial Year

In accordance with the provisions of Section 149(10) of the Companies Act, 2013, read with Rules made thereunder, Mr. Parantap Dave (DIN: 00019472), Independent Director will be completing period of Two (2) terms of five years each at your company at the ensuing 31st Annual General Meeting (âAGMâ). Mr. Dave was re-appointed in the Company vide Members Approval dated 27th September, 2019 to

hold office for a period of Five (5) consecutive years till the conclusion of forthcoming 31st AGM of the Company.

The Board expresses and places on record its appreciation to Mr. Dave for his valuable inputs, insights and guidance to the Company during his tenure.

The Board of Directors vide its resolution dated May 10, 2024, approved the following, subject to the approval of shareholders at the 31st Annual General Meeting of the Company:

- Re-appointment of Mr. Paulo Manuel Ferreira Moura De Castro (DIN: 08459844) as the NonExecutive Independent Director of the Company for a second term of Five (5) years with effect from May 23, 2024 to May 22, 2029.

- Re-appointment and Re-designation of Mr. Krishnakumar Jhunjhunwala (DIN: 09507192), as the Chairman & Managing Director of the Company for a period of Five (5) years from October 1, 2024 to September, 30, 2029 and payment of remuneration and minimum remuneration for a period of Three (3) years from October 1, 2024 to September 30, 2027.

The Board of Directors vide its resolution dated June 24, 2024, approved the following, subject to the approval of shareholders at the 31st Annual General Meeting of the Company:

- Redesignation of Mr. Sachin Shashikant Abhyankar (DIN:02760746) as the NonExecutive Independent Director of the Company with effect from June 24, 2024

Retirement by Rotation

In accordance with the provisions of Section 152 of the Act and in terms of the Articles of Association of the Company, Mr. Neha Jhunjhunwala, (DIN: 07144529), Executive Director retires by rotation at the ensuing 31st AGM of the Company and being eligible, offers herself for re-appointment.

The disclosures required pursuant to Regulation 36 of the SEBI Listing Regulations and the Secretarial Standards on General Meeting (âSS-2â) are given in the Notice of this AGM, forming part of the Annual Report.

Ms. Neha Jhunjhunwala is not debarred from holding of office of Director pursuant to any Order issued by Securities and Exchange Board of India, Ministry of Corporate Affairs, Reserve Bank of India or any other such authority.

Declaration of Independence

The Company has received necessary declarations from all the Independent Directors on the Board of the Company confirming that they meet the criteria of Independence as prescribed under Section 149 of the Companies Act, 2013 and the Rules made there under and Regulation 16(1)(b) and other applicable regulations, if any, of the Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015, as amended. The Independent Directors have also confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties.

Further, the Independent Directors have also submitted a declaration in compliance with the provision of Rule 6(3) of Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, which mandated the inclusion of an Independent Directorâs name in the data bank of persons offering to become Independent Directors, of Indian Institute of Corporate Affairs (âIICAâ) for a period of one year or five years or life time till they continue to hold the office of an Independent Director and also completed the online proficiency test, conducted by Indian Institute of Corporate Affairs, wherever applicable.

The Board of Directors, based on the declaration(s) received from the Independent Directors, have verified the veracity of such disclosures and confirmed that the Independent Directors fulfill the conditions of independence specified in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013, as amended and are independent from the management of the Company.

In the opinion of the Board, all the Independent Director are persons possessing attributes of integrity, expertise and experience (including proficiency) as required under the applicable laws, rules and regulations.

The Company has issued letters of appointment/ reappointment to Independent Directors in the manner as provided under Companies Act, 2013. The terms and conditions of the said appointment are hosted on website of the Company https://www. sarlafibers.com/wp-content/uploads/2024/01/2. Terms-Conditions-for-appointment-of-ID.pdf.

Familiarization program for Independent Directors

Your company has conducted necessary familiarisation program for the Independent Directors onboard with regards to their roles, duties and responsibilities. The details of the training and familiarization program are provided in the Corporate Governance Report, which forms part of the Annual Report.

Board Evaluation

The Board of Directors have carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Companies Act, 2013, Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 and basis the criteria mentioned in the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

The Independent Directors were satisfied with the overall functioning of the Board, which displayed a high level of commitment and engagement.

15. Key Managerial Personnel

Pursuant to the provisions of the Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company as on the date of this Report are:

- Mr. Krishnakumar M. Jhunjhunwala, Managing Director^A

- Ms. Radhika Sharma, Company Secretary & Compliance Officer*

- Mr. Kayvanna Shah, Chief Financial Officer#

^AMr. Krishnakumar Jhunjhunwala is proposed to be re-designated and re-appointed as the Chairman and Managing Director of the Company with effect from October 1, 2024.

*Ms. Radhika Sharma was appointed as the Company Secretary & Compliance Officer with effect from November 4, 2023 in place of Ms. Neha Somani (resigned on September 22, 2023)

#Mr. Kayvanna Shah was appointed as Chief Financial Officer with effect from June 24, 2024 in place of Mukesh Deopura (resigned on March 26, 2024)

16. Meetings of the Board

During the F.Y. 2023-24, four (4) Meetings of Board of Directors were convened. The details of the said meetings are mentioned in the Corporate Governance Report forming part of this Annual Report.

The intervening gap between two consecutive meetings was not more than 120 (One Hundred and Twenty) days as prescribed by the Companies Act, 2013 and the SEBI Listing Regulations.

17. Committees of Board

Pursuant to the provisions of the Companies Act, 2013, rules framed there under and the SEBI Listing Regulations, the Company has the following committees of the Board of Directors and the details pertaining to such committees are mentioned in the Corporate Governance Report, which forms part of the Annual Report:

â¢ Audit Committee;

â¢ Nomination and Remuneration Committee;

â¢ Corporate Social Responsibility Committee;

â¢ Risk Management Committee;

â¢ Stakeholdersâ Relationship Committee;

During the year, all recommendations made by the aforesaid committees were approved by the Board. The reconstitutes committee structure is available on the website of the company at - https://www. sarlafibers.com/composition-of-committee/

18. Listing of Securities

As on the date of this report, the Company has its Equity Shares listed on the following Stock Exchanges:

- BSE Limited;

- The National Stock Exchange of India Limited;

The listing fees for the financial year under review have been paid to the Stock Exchanges where the Equity Shares of the Company are listed. The securities of the Company were not suspended from trading during the FY 2023-24.

19. Internal Financial Control System and their adequacy

The details on Internal Financial Control System and their adequacy are provided in the Management Discussion and Analysis Report of the Company, which forms part of the Annual Report

20. Auditors

a) Statutory Auditors

The members of the Company at 29th Annual General Meeting (âAGMâ) re-appointed M/s. CNK & Associates LLP, Chartered Accountants, Mumbai (Firm Registration No.: 101961W) as the Statutory Auditors of the Company for a term of five (5) years to hold office from the conclusion of 29th AGM until the conclusion of 34th AGM of the Company.

Further, vide Ministry of Corporate Affairs (MCA) notification dated May 7, 2018, the requirement for ratification of appointment of Statutory Auditors by members at every AGM has been dispensed with. Accordingly, no such item has been considered in the AGM Notice for the Financial Year 2023-24.

The Statutory Auditors, M/s CNK & Associates LLP, Chartered Accountants have issued their reports on Financial Statements for the financial year ended March 31, 2024. The Report does not contain any qualifications, reservations or adverse remarks on the financial statements of the Company. Further, the Company is in compliance with the RBI regulations on downstream investments issued from time to time and no qualification were made by the Statutory Auditors in their report. Notes on Accounts referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments. The Members are therefore requested to approve the Auditorsâ Report.

b) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have appointed M/s. Mayank Arora & Co., Company Secretaries in Practice (COP: 13609) to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2024.

The Report of Secretarial Auditor in Form MR-3 in accordance with Section 204 of Companies

Act, 2013 and Secretarial Compliance Report in accordance with Regulation 24A of the SEBI Listing Requirements for the financial year ended March 31, 2024 is annexed herewith and marked as âAnnexure -Iâ to this Report.

In terms of Regulation 16(1)(c) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company does not have any material subsidiary.

There were no qualifications/ adverse remarks made by the Secretarial Auditor in their report for the financial year ended March 31, 2024.

However, the Secretarial Auditor have made an observation in their report which is self- explanatory and doesnât require any clarification:

âDuring the Financial Year 2023-24, the Company has failed to submit the Corporate Governance Report for the quarter ended June 2023 within the due date on NSE Limited. However, the Company have submitted the same on 22/08/2023 on NSE Limited. NSE through their Notice dated August21,2023 imposed penalty of Rs. 58,000 18% GST The Company has applied for waiver by paying sum of Rs 11,800 with NSE Limited and the response is awaited therewith."

c) Cost Auditor:

The Company has prepared and maintained cost records as prescribed under Section 148(1) of the Companies Act, 2013 for the year 2023-24.

The Board of Directors, on recommendations of the Audit Committee, appointed M/s. Balwinder & Associates, Cost Accountants, (Firm Registration No: 000201), as Cost Auditors of the Company, for the FY 2023-24, vide its Resolution dated May 13, 2023 for conducting the audit of the cost records maintained by the Company for the products as mandated by the Central Government at a remuneration as mentioned in the Notice of 30th AGM of the Company.

However, the Company received resignation from the said auditors on March 29, 2024, due to non-receipt of any communication from the previous auditors M/s V. B Modi & Associates, in accordance with the provisions of clause (8) of Part 1 of the First Schedule to the Cost and Works Accountants Act, 1959.

In this regard, the Company had vide its Board Meeting dated April 27, 2024 appointed M/s Kasina & Associates as the Cost Auditors in place of M/s. Balwinder & Associates to carry out Cost Audit for the Financial Year 2023-24 at such remuneration as decided by the Board, subject to the ratification of the Members at the 31st AGm.

The Company has further vide Board Meeting dated June 24, 2024 had appointed same auditors viz., M/s Kasina & Associates as the Cost Auditors for the Financial Year 2024-25, subject to the ratification of the Members at the 31st AGM.

The Cost Audit Report for the financial year 202324 is in progress and the report will be filed with the Ministry of Corporate Affairs, Government of India, within the statutory timeline.

21. Reporting of Frauds

There have been no instances of fraud reported by the Statutory Auditors under Section 143 (12) of the Act and Rules framed thereunder, either to the Audit Committee/ Company or to the Central Government.

22. Particulars ofEmployees and related Disclosures

Disclosure pertaining to remuneration and other details as required under section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in âAnnexure-IIâ to this Report.

A Statement containing Particulars of Employees as required pursuant to the provisions of Section 197 of the Act, and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are not provided in this Report.

As per the provisions of Section 136 of the Act, the Annual Report is being sent to Members of the Company and other stakeholders entitled thereto, excluding the Statement containing Particulars of Employees. Any Member interested in obtaining such details may write to the Company Secretary of the Company at investors@sarlafibers.com.

23. Directorsâ Responsibility Statement

Pursuant to Section 134 of the Companies Act, 2013, with respect to Directorsâ Responsibility Statement, it is hereby confirmed that:

a. in the preparation of annual accounts for the financial year ended March 31, 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. appropriate accounting policies have been selected and applied consistently and judgments and estimates are made reasonably and prudently so as to give a true and fair view of the state of affairs of the Company as on March 31, 2024 and of the profit of the Company for the year ended on that date;

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

d. the annual accounts have been prepared for the financial year ended March 31, 2024 on a âgoing concernâ basis;

e. proper internal financial controls are devised to ensure compliance with all the provisions of the applicable laws and that such internal financial controls are adequate and are operating effectively; and

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

24. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as âAnnexure - IIIâ to this Report.

25. Particulars of contracts or arrangements with Related Party Transactions

Pursuant to Policy on Related Party Transaction ofthe Company, all contracts/ arrangements/ transactions entered by the Company during financial year with related parties were on armâs length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

Pursuant to the provisions of applicable SEBI Listing Regulations, all related party transactions are placed before the Audit Committee for prior approval including the transactions covered under section 188 of the Companies Act, 2013 and Regulation 23 of the SEBI Listing Regulations. Prior omnibus approval of the Audit Committee has also been obtained for transactions which are foreseen and are repetitive in nature.

The particulars of contracts or arrangements with related parties referred to in sub-section 1 of Section 188 ofthe Companies Act, 2013 are furnished in Form AOC-2 in âAnnexure-IVâ to this report.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companyâs website at the link: https://www. sarlafibers.com/wp-content/uploads/2024/01/14. Related-Pa.rty-Tra.nsa.ction-Policy.pdf

26. Corporate Social Responsibility

Corporate Social Responsibility (âCSRâ) Committee

In compliance with the requirements of Section 135 of the Companies Act, 2013 read with the applicable rules made there under, the Company has a duly constituted CSR Committee. The details of the CSR Committee are provided in the Corporate Governance Report of the Company, which forms part of the Annual Report.

CSR Policy

The contents of the CSR Policy of the Company as approved by the Board on the recommendation of the CSR Committee is available on the website of the Company and can be accessed through the web link at https://www.sarlafibers.com/investors/.

CSR initiatives undertaken during the financial year 2023-24, if any

The CSR Obligation of the Company for the Financial Year 2023-24 was Rs. 100.61 Lakhs. The excess CSR amount spent in previous financial years amounted to Rs. 144.47 Lakhs, and hence the Company was not bound by any obligation during the year under review. However, your Company considers its responsibility towards the community and environment in which it operates and consistently contributes to the economic development of society at large. In line with this commitment, the Company is pleased to inform that it has made surplus contributions during the year under review towards the promotion of healthcare including preventive healthcare.

The Annual report on CSR activities in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014 has been appended as âAnnexure - Vâ and forms an integral part of this Report.

27. Corporate Governance Report and Management Discussion and Analysis Report

Your Company continues to be committed to good corporate governance aligned with the best corporate practices. It has also complied with various standards set out by Securities and Exchange Board of India and the Stock Exchanges where its Securities are listed. For the financial year ended March 31, 2024, your Company has complied with all the requirements as applicable, with respect to Corporate Governance

As per Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a separate section on corporate governance practices followed by the Company, together with a certificate from M/s. Mayank Arora & Co., Practicing Company Secretary, on compliance with corporate governance norms under the SEBI Listing Regulations, forms an integral part of this Annual Report as âAnnexure - VIâ & âAnnexure - VI(A)â respectively.

Further, Management Discussion and Analysis Report on the operations of the Company, as required under the Regulation 34 (2) of the SEBI Listing Regulations, is provided in a separate section and forms an integral part of Annual Report .

28. Policy for Determining Materiality of Events

To boost shareholder democracy and investor awareness, the Securities and Exchange Board of India by way of a Notification dated June 14, 2023, amended the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Vide this Circular SEBI introduced Quantitative Criteria for Determining Materiality of Events/ Information, necessary to be disclosed to investors and stock exchanges. In its consonance, SEBI also introduced/ amended List of Information and/or Events that are deemed material.

In this regard, in order to keep the policies of the Company in line with the provisions of the SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015 the Policy for Determination of Materiality for Disclosure of Events or Information as maintained by the Company was amended and approved by Board at its Meeting held on January 24, 2024. Further, the Board vide its resolution introduced quantitative thresholds and amended matters which necessitated disclosure to exchanges and investors.

The Materiality Policy of the Company is available on the website of the Company at https://www. sarlafibers.com/wp-content/uploads/2024/01/8. Determination-of-Material-Events.pdf

29. Related Party Transaction Policy

Related Party Transactions have a significant impact on the governance and integrity of listed entities. Hence, in order to ensure transparency and protect the interests of all stakeholders, SEBI pursuant to Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandated the Board of Directors to review its Related Party Transaction (RPT) Policy at least once in every three years or whenever there is any updation thereof.

In this regard, the Board perused and accordingly approved recent amendments in its Related Party Policy.

The Related Party Transaction Policy is available on the website of the Company at https://www. sarlafibers.com/wp-content/uploads/2024/01/14. Related-Party-Transaction-Policy.pdf

30. Whistle Blower / Vigil Mechanism Policy

The Company believes in conducting its affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. Pursuant to Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 ofthe SEBI Listing Regulations, the Board ofDirectors have implemented a vigil mechanism through the adoption of Whistle Blower/Vigil Mechanism Policy. The policy provides for adequate safeguards against victimization of Director(s) or employee(s) or any other person who avail the Mechanism. The Code applies to all Directors, Officers and Employees ofthe Company.

The Code of Conduct is available on Companyâs website - https://www.sarlafibers.com/wp-content/ uploads/2024/01/15.Whistle-Blower-Policy.pdf to report any concerns about unethical behaviour, any actual or suspected fraud.

31. Code of Conduct for Prohibition of Insider Trading

Your Company has in place a Code of Conduct for Prohibition of Insider Trading, which lays down the process of trading in securities of the Company by the Designated Persons and to regulate, monitor and report trading by the employees of the Company either on his/her own behalf or on behalf of any other

person, on the basis of Unpublished Price Sensitive Information. Also it lays down the procedure for Inquiry in case of leak of Unpublished Price Sensitive Information including Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information.

The aforementioned amended Code is available on the website of the Company at https://www. sarlafibers.com/wp-content/uploads/2024/01/10. Code-of-Insider-Trading.pdf

32. Compliance Management Framework

The Company has instituted a compliance management system within the organization to monitor compliances and provide update to Senior Management/Board on a periodic basis. The Board of Directors on quarterly basis monitors the status of compliances with applicable laws.

Compliance of Secretarial Standards

During the financial year under review, the Company has complied with all the applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India.

Risk Management

The Company has adequate Risk Management framework to identify, measure, manage and mitigate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business strategy and enhance the Companyâs competitive advantage. This risk framework thus helps in managing market, credit and operational risks and quantifies potential impact at a Company level.

The details and the process of the Risk Management as implemented in the Company are provided as part of Management Discussion and Analysis which forms part of the Annual Report. The risk management policy of the Company is available on its website at - https://www.sarlafibers.com/wp-content/uploads/2024/01/13.Risk-Management-Policy.pdf

Extract of the Annual Return

In accordance with the provisions of Section 92(3) read with section 134(3)(a) of the Companies Act, 2013 and Rules framed thereunder, an annual return in the prescribed format for the financial year 202324 is available on the website of the Company at https://www.sarlafibers.com/reports/

33. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance towards sexual harassment at the workplace and have a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace

(Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. All women employees whether permanent, temporary or contractual are covered under the above policy. The said policy has been uploaded on website https://www.sarlafibers.com/ wp-content/uploads/2024/01/POSH-Policy-Sarla. pdf of the Company for ready reference of female employees. An Internal Complaint Committee (ICC) has been set up in compliance with the said Act and rules framed thereunder to redress complaints received on sexual harassment.

During the year under review, the committee reviewed on the policy and matters pertaining thereto, if any. It was noted that there were no cases received pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

34. Internal Financial Control Systems, their Adequacy and Risk Management:

Adequate Internal Financial Control systems, commensurate with the nature of the Companyâs business, size and complexity of its operations, are in place and have been operating satisfactorily and effectively. During the financial year under review, no material weaknesses in the design or operation of Internal Financial Control system was reported.

The Companyâs Internal Auditor also monitors and evaluates the internal control system and submits Reports/ Presentations which are placed before the Audit Committee and thereafter for discussion on Board.

35. Significant and Material Orders passed by the Regulators or Courts:

During the period under review, no such order is passed by any Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations except one GST recovery order for Rs 643.51 lakhs (Rs. 585.01 Lacs and Rs. 58.50 Lacs as a penalty) plus interest from GST department pertaining to the GST refund availed on exports on payment of IGST in EOU unit for FY 2018-19 to 2021-22. Based on legal advice, the Company has moved to Bombay High court challenging the above order and asking for stay of the demand. Simultaneously the company has filed necessary appeals with the Commissioner (Appeal) Central Excise & Customs. The company believes that itsâ refund claim was proper and the recovery order is not maintainable.

36. Material changes and commitments, if any, affecting financial position have occurred between the end of the financial year of the Company and date of this report

There were no Material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report.

37. Credit Rating

Acuite Ratings and Research Ltd (Formerly Known as SMERA Ratings Limited) have reaffirmed the Companyâs long-term borrowings rating to ACUITE Aâ and reaffirmed the short-term borrowing rating as ACUITE A1â.

These ratings are considered to have low credit risk and are considered stable in nature.

38. Investor Education and Protection Fund (IEPF)

Pursuant to Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Rulesâ), dividend, if not claimed for a period of seven years from the date of transfer to Unpaid Dividend Account of the Company, are liable to be transferred to IEPF.

Further, all the shares in respect of which dividend has remained unclaimed for seven consecutive years or more from the date of transfer to unpaid dividend account shall also be transferred to IEPF Authority. The said requirement does not apply to shares in respect of which there is a specific order of Court, Tribunal or Statutory Authority, restraining any transfer of the shares.

In the interest of the shareholders, the Company sends periodical reminders to the shareholders to claim their dividends in order to avoid transfer of dividends/shares to IEPF Authority. Notices in this regard are also published in the newspapers and the details of unclaimed dividends and shareholders whose shares are liable to be transferred to the IEPF Authority, are uploaded on the Companyâs website https://www.sarlafibers.com/

The details of unclaimed dividends and shares transferred to IEPF during FY 2023-24 are as follows:

Financial Year	Amount of	Number
	unclaimed	of shares
	dividend transferred	transferred
2015-16 (Interim)	9,58,341	1,03,100
2015-16 (Final)	3,72,808	30,603
Total	13,31,149	1,33,703

Shareholders /claimants whose shares, unclaimed dividend have been transferred to the aforesaid IEPF Suspense Account or the Fund, as the case may be, may claim the shares or apply for refund by making an application to the IEPF Authority in Form IEPF-5, along with requisite fee as decided by the IEPF Authority from time to time.

Further, the Company shall be transferring the unclaimed Dividend for the financial year 2016-17 to the IEPF Account on or before December 03, 2024. The Company shall also be transferring the shares, on which the dividend has remained unclaimed for a period of seven (7) consecutive years, to the IEPF Account simultaneously on the same date.

39. Insurance

All the properties including buildings, plant and machinery and stocks ofthe Company are adequately insured.

40. Other Disclosures

a) There are no proceedings made or pending under the Insolvency and Bankruptcy Code, 2016 and there is no instance ofone-time settlement with any Bank or Financial Institution, during the year under review.

b) The Equity shares of your Company continues to be listed on BSE Limited and the National Stock Exchange of India Limited. The applicable listing fees for the F.Y. 2023-24 have been duly paid to the Exchanges.

c) Pursuant to SEBI Circular No. SEBI/HO/DDHS/ CIR/P/2018/144 dated November 26, 2018, your Directors confirm that the Company is not defined as a âLarge Corporateâ as per the framework provided in the said Circular. Moreover, your Company has not raised any fund by issuance of debt securities.

41. Acknowledgement and appreciation

Your Board takes this opportunity to thank the Companyâs Members, Customers, Vendors and all other Stakeholders for their continued support throughout the FY 2023-24. The Directors also thank the Stock Exchanges, Banks, Ministry of Corporate Affairs, State Governments, Government of India, and all other Government agencies and Regulatory authorities for the support extended by them and also look forward to their continued support in future.

Your Directors wish to place on record their appreciation of the dedicated efforts by employees at all levels.

For and on behalf of the Board

Sd/-

Krishnakumar Jhunjhunwala

Managing Director DIN: 00097175

Place: Mumbai

Date: June 24, 2024

Mar 31, 2018

Dear Members,

The Board of Directors takes immense pleasure in presenting the Twenty Fifth Annual Report on the Audited Financial Statements of Sarla Performance Fibers Limited ("the Company") for the financial year ended 31st March, 2018.

Corporate Overview

Sarla Performance Fibers Limited ("Your Company") is engaged in the business of Specialty Yarn from Past 24 Years having with 2 Manufacturing Plants at Silvassa, UT of Dadra & Nagar Haveli and a Dyeing Plant at Vapi, Gujarat and Wholly Owned Subsidiaries (WOS) at British Virgin Islands (BVI) and United States of America (USA) with Group''s Corporate Office situated at Mumbai.

FINANCIAL SUMMARY HIGHLIGHTS

The highlights of the performance of the Company for the year ended March 31, 2018 is summarized below: (Rs. in Lakhs)

Particulars	STANDALONE 2017-18	2016-17	CONSOLIDATED 2017-18 2016-17
Sales & Operations	27864.53	27669.25	30630.04	32185.93
Add: Other Income	2366.62	1671.46	1829.35	2703.00
TOTAL INCOME	30231.15	29340.71	32459.39	34888.93
Profit Before Interest, Depreciation & Tax	7865.90	7304.38	7288.22	8055.60
Less: Finance Cost	618.18	502.14	734.76	715.50
Less: Depreciation & amortization	1317.04	1243.55	2015.14	1969.55
PROFIT BEFORE TAX	5930.68	5558.69	4538.33	5370.74
Less: Provision for Taxation
- Current	1505.00	1200.10	1510.74	1204.93
- Deferred	362.83	879.93	565.62	1228.90
- Earlier Years	182.22	-	182.22	-
- MAT credit Entitlement	(145.39)	(492.70)	(1453.89)	(492.70)
NET PROFIT AFTER TAX	4026.02	3971.36	3733.64	3429.61
Net Comprehensive Income for the Year	4015.02	3967.60	3733.69	3452.51
Balance bought forward	12753.60	8994.77	11940.69	8743.66
Profit for the Year	4026.02	3971.36	2147.12	3410.49
Re measurement of Net defined benefit plans (net of
tax)	(11.00)	(3.76)	(11.00)	(3.76)
Dividend for the year	918.53	208.77	919.48	209.70

BUSINESS PERFORMANCE:

Operations: During the year under review the sales of the Company on standalone basis were Rs. 27864.53 Lakhs as against Rs. 27669.25 Lakhs in 2016-17 witnessing a minimal increase of 0.70%. The FOB value of exports stood at Rs. 14689.04 Lakhs compared to Rs 14635.78 Lakhs in 2016-17.

PROFITABILITY:

The profit before Depreciation, Interest & Tax was Rs. 7865.90 Lakhs as compared to Rs. 7304.38 Lakhs in the previous year, after providing for depreciation of Rs. 1317.04 Lakhs (Previous Year Rs. 1243.55 Lakhs) & provision for taxation of Rs. 1505.00 Lakhs (Previous Year Rs.1200.10 Lakhs), there was a net profit of Rs. 4026.02 Lakhs as compared to Rs. 3971.36 Lakhs in the Previous Year.

A. BUSINESS & ECONOMIC OVERVIEW

Global and India Economy: In 2017, the cyclical upswing underway since mid-2016 continued to strengthen and the global economy witnessed a pickup in growth. According to the International Monetary Fund (IMF), the year reported the broadest synchronized global growth surge since 2010. The advanced economies witnessed expansion owing to increased investments and manufacturing output. Similarly, key emerging markets and developing economies, including Brazil, China and India, posted strong upward momentum

Given stronger than expected economic activity in 2017, the IMF has revised its growth forecast for the United States from 2.3% to 2.7% in 2018 and from 1.9% to 2.5% in 2019.Stronger domestic demand in the United States is projected to increase imports. In Europe too, economic activity in 2018 and 2019 is projected to remain stronger than anticipated. Moreover, the advanced economies in Asia are expected to deliver stronger growth, while the emerging and developing ones are expected to grow at around 6.5% over 2018-19, broadly the same pace as in 2017.

India''s economy picked up some pace in FY 2017-18 and the gross domestic product growth was better than FY 2016-17. The structural reform of The Goods and Services Tax (GST) within a year of demonetisation is expected to provide a boost to the economic growth and investments in the long run with an improving business ecosystem, stable macroeconomic indicators and a liberal FDI regime, economy. According to World Bank''s Global Economic Prospects report, India''s GDP is expected to rise to 7.4% in FY 2018-19 and 7.8% in FY 2019-20.

Business Overview: Sarla Performance Fibers Limited is a leading exporter of Regular as well as High Tenacity Polyester and Nylon Yarns. It started operations 24 years ago as a commodity manufacturer of Man Made Fiber but transformed into a high value added yarn maker in the past decade. It has an installed capacity of 11,900 tons per annum for manufacturing yarns in Silvassa and 3200 tons per annum for a Dyeing unit at Vapi.The Plant of the Company located at Walterboro, South Carolina, USA is temporarily shut down in December 2017 due to low capacity utilization. The Company is exploring various options for its US Plant to make it profitable which includes entering into partnership/strategic alliance. The company''s emphasis this year will be to focus on niche end user applications in India, higher value added yarns to leading global apparel brands and companies. The company exports to 40 countries.

SPFL also owns Wind Power Capacity of 14.75 MW in totality, located in different states i.e. 6 MW is in the state of Maharashtra, 5.75 MW in the states of Gujarat and 3 MW in the state of Madhya Pradesh. Our plant load factor for the fiscal year 2018 was about 22%.

Customer Segments and Growth: The Company''s customer segments can be divided into four parts:

1) Innerwear, Narrow Fabrics, Hosiery and Sportswear.

2) Threads.

3) Industrial Yarns.

4) Regular Yarns.

Turnover Break Up (Customer Segment-wise)

Segments	FY 2017-18 (% of Total Sales)	FY 2016-17 (% of Total Sales)
Innerwear, Narrow Fabrics, Hosiery and Sportswear	38.30	37.50
Threads	32.50	32.45
Industrial Yarns	13.10	12.45
Regular Yarns	15.90	17.60
100.00		100.00

Turnover Break Up (Geographical)

Regions	FY 2017-18 (% of Export Sales)	FY 2016-17 (% of Export Sales)
South, North & Central America	24.84	17.60
Middle East & Europe	37.40	40.25
Africa	2.30	3.82
Asia Pacific	35.46	38.33
100.00		100.00

In all, we export to over 40 countries and to 105 customers. Our customer concentration is well distributed and no single customer exceeds more than 10% of our revenue.

B. OPPORTUNITIES AND THREATS:

The Indian textiles industry is among the oldest in the country. It is projected to reach USD 230 billion by 2020 from around USD 120 billion. Currently, the domestic textiles industry contributes 10% to the manufacturing output of the country, generates about 4% to its GDP and employs more than 45 million people. Importantly, the sector contributes 15% to the export earnings of Indiaremains a challenge.

Exports have been a core feature of India''s textile sector. The Indian textiles export market, estimated at $18 billion, is expected to grow at a CAGR of 4% compared to the global CAGR of 3% over 2016-26.The fundamental strength of the textile industry is its prices of the raw materials like wool and increase in oilprices which increase the input costs.

One of the positive factors in recent time is the increasing gap between cotton and polyester prices. Though, there was a glut in cotton and prices had fallen due to oversupply and less offtake from China, the synthetic fiber prices also fell following the slump in crude oil and its derivatives. We believe, the demand for synthetic fiber will continue to outpace that of cotton due to the inherent price advantage and quality improvements.

One of our big market is the NAFTA and CAFTA market comprising of North American customers. Due to the growing preference for locally sourced products, the demand for synthetic yarn in this geography is increasing by 5-6% p.a. We are beneficiaries of this due to our direct presence in South Carolina, US through our manufacturing facility. Moreover, there are substantial cost advantage of manufacturing in the US making us reasonably cost competitive vis a vis suppliers from China, ASEAN and India.

We also have a strong opportunity for growth in the nylon yarn segment with nylon 66 production to ramp up this year.

C. OUTLOOK:

The prospects for outsourcing of polyester/nylon yarns remain healthy. This is because of increased capacity in India. While we remain optimistic about future growth.

D. FINANCIAL PERFORMANCE: (Rs. in Lakhs)

Item	2017-2018	2016-2017	% increase
Raw Material Cost& Purchase of Stock in trade	13751.31	11827.81	16.26%
Employee Benefit and Other Expenditure	8613.94	10208.52	-15.62%
EBIDTA	7865.90	7304.38	7.69%
Finance Cost	618.18	502.14	23.11%
Fixed Assets (Gross Block)	19183.23	17805.56	7.74%
Net Current Assets	5178.62	3581.42	44.60%
Working Capital Finance	6445.68	8186.51	-21.26%
Cash & Bank Balances	4190.64	6923.46	-39.47%

Raw Material Cost: The Raw Material prices increased in the year 2017-18 due to continuous increase in Partially Oriented Yarn (POY) and Chips Prices. The Major reason for increase in prices of Raw Material is increase in price of Crude oil.

Expenditure: The Major reason for decrease in expenditure is reduction in Excise Expenses after implementation of Goods and Services Tax (GST).

Interest Cost: The interest cost increased mainly due to increase in USD LIBOR.

Fixed Assets: The increase in fixed assets of Rs. 1377.67 Lakhs is due to regular addition in Plant and Machinery.

Net Current Assets and Cash & Cash Equivalents: the Decrease in Net Current Assets is majorly due to decrease in fixed deposits which are utilised for the purpose of incurring capital expenditure for Plant & Machineries.

E. RISK AND CONCERNS

Raw material sourcing: We source 51% of our RM requirements (nylon and polyester chips/fiber) from India and 49 % from imports. For our RM sources we have multiple suppliers. Last year, the price of our major RM POY ranged between Rs 62 to 115 per kg and that of Nylon yarn ranged between Rs 210 to 310 per kg.

Interest Rates: The Company''s average gross interest cost in the last year increased by 23.11%. The company''s present Debt Equity Ratio is 0.35. The long term Debt equity Ratio is 0.13. Interest costs are 2.04% of total revenue.

Exchange Rate: 52% per cent of company revenue is in foreign currency (Dollar, Euro & GBP) and balance is in INR. Also, we import 23.54% per cent of turnover (88.27% of which consists of raw material purchases) creating a natural hedge to that extent. Apart from this, from time to time forward cover is taken to hedge exposure in foreign currency. For FY18, our average forward cover was for 3 months of our revenue.

Inflation: The Company does not cater to retail customers. Its sales are to the business segment and hence it has been able to pass on inflationary pressures. It does not expect any major impact dueto current high level of inflation.

F. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has in place reasonable internal control system both from the business process and regulatory compliance point of view. The system is reviewed and updated on regular basis. The company is continuously upgrading its internal control systems by measures such as strengthening of Information Technology infrastructure and use of external management consultant services.

G. HUMAN RESOURCES/INDUSTRIAL RELATIONS:

The Company has always valued and nurtured its human resources, nonetheless, globalization, high growth of the Indian economy in recent times and its ambitious growth targets have made talent attraction and retention amongst the biggest challenges the company faces today.

The company has in place a good appraisal system to motivate all the employees. The company believes in continuous development for all its employees and for that company is planning to frame a program wherein all the employees will be provided training into related areas of skill development.

H. CAPITAL EXPANSION AND INVESTMENT:

Last year, we incurred a CAPEX of Rs. 1377.67 towards purchase of Plant & Machinery. For F.Y. 2018-19 we envisage higher amount of CAPEX to the tune of about Rs. 3000.00 Lakhs.

I. VALUE ADDED STATEMENT (Rs. in Lakhs)

Particulars	2017-18	2016-17	2015-16	2014-15	2013-14
Income from Production/Operations	27864.53	25954.04	24871.70	27229.95	24,365.14
Add : Other Income	2366.62	2026.98	2181.88	1146.98	783.89
CORPORATE OUTPUT	30231.15	27981.02	27053.58	28376.94	25,149.03
Less : Cost of Raw Materials Consumed	13751.31	10852.68	11095.02	12023.68	12,718.59
Less : Cost of Traded Goods	-	57.07	1159.90	2962.63	1,307.76
Less : Other Manufacturing Expenses	5068.47	5964.82	4847.21	4792.65	4,192.62
Less : Administrative & Other Expenses	2207.38	2022.55	1922.64	2173.37	1,760.33
EQUALS GROSS VALUE ADDED	9203.99	9083.90	8028.81	6424.61	5,169.72
Less : Depreciation &Amortization	1317.04	1243.55	1014.40	913.55	935.98
Less : Extra Ordinary/Prior Period Items	-	-	-	-	-
EQUALS NET VALUE ADDED	7886.95	7840.35	7014.41	5511.06	4,233.75
ALLOCATION OF NET VALUE ADDED To Personnel	1007.77	921.73	831.10	778.28	619.19
To Taxes (including tax on proposed div.)	1904.66	1666.99	1587.87	1383.90	1087.74
To Creditors (via interest)	618.18	579.11	508.07	514.48	388.89
To Investors (via dividend)	918.53	918.53	876.78	668.02	521.27
To The Company (via retained earnings)	3437.81	3753.99	3210.60	2166.38	1,616.66
	7886.95	7840.35	7014.41	5511.06	4,233.75

DIVIDEND:

Keeping in view the continued good performance, future fund requirements of the Company and for rewarding shareholders, your directors are pleased to recommend a dividend @ 110% i.e. Rs. 1.10 per equity share of face value of Re. 1 each fully paid-up Equity Shares [Excluding the Share upon which the Promoter / Member have waived / forgone / his / her / their right to receive the Dividend by him / her / them for the financial year ended 31st March, 2018]. The dividend shall be paid to members, whose names appear in the Register of Members as on 21st September, 2018.

MANAGEMENT DISCUSSION & ANALYSIS:

Management''s Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), is presented in a separate section, forming part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENT:

In accordance with the provisions of the Companies Act, 2013 ("the Act") and Ind AS 110 - Consolidated Financial Statement read with Ind AS - 28 Investments in Associates and Ind AS 31 - Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Indian Company as Subsidiary. There are two wholly owned overseas subsidiaries viz. Sarla Overseas Holdings Ltd (BVI) and Sarlaflex Inc. (USA) and one Step down subsidiary viz. Sarla Europe (LDA) as on 31st March, 2018. There has been no material change in the nature of the business of the subsidiaries. The Policy for determining material subsidiaries as approved may be accessed on the Company''s website at www.sarlafibers.com.

Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company at the link: www.sarlafibers.com.

The Company will make available, the Financial Statements of the Subsidiary Companies to any Member of the Company who may be interested in obtaining the same.

No Company has become or ceased to be a Subsidiary during the year under consideration.

The Company is not having any Holding Company or Joint Venture or any Associates Company.

The salient features of the financial statements of the subsidiaries in pursuance of Section 129 (3) of the Companies Act, 2013, read with Rule 5 of The Companies (Accounts) Rules, 2014 are given herein below in prescribed form AOC-1:

(Rs. in Lakhs)

Name of the Subsidiary	Sarla Overseas Holdings Ltd (SOHL)	Sarlaflex Inc	Sarla Europe LDA (Subsidiary of SOHL)
Reporting period for the subsidiary	April to March	April to March	April to March
Reporting Currency	USD	USD	EURO
Conversion Rate	65.04	65.04	80.62
Number of Shares	435000	989000	3
Share Capital	196.99	596.49	3.18
Reserve and Surplus	4853.31	(7105.99)	(7.10)
Total Assets	5697.44	15068.02	303.72
Total Liabilities (Including Reserves)	5697.44	15068.02	303.72
Investments	3.17	5934.20	-
Turnover	4595.53	1681.33	270.04
Profit before Taxation	1185.21	(1512.13)	17.67
Provision for Taxation	4.86	(203.66)	4.86
Profit after Taxation	1180.35	(1715.79)	12.81
Proposed Dividend	902.51	-	-
% of shareholding	100%	100%	60%
Country	British Virgin Island	United States of America	Portugal

SECRETARIAL STANDARDS:

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ''Meetings of the Board of Directors'' and ''General Meetings'', respectively, have been duly followed by the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT:

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

a. that in the preparation of annual accounts for the year ended 31st March, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures for the same;

b. that they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the profit of the Company for that year;

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

d. that the Directors had prepared the annual accounts on a ''going concern'' basis and

e. that the Directors had laid down internal financial controls and such internal financial controls are adequate and operating effectively.

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

CORPORATE GOVERNANCE:

In compliance with the provisions of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Report on the Corporate Governance is annexed and forms an integral part of this Report. The requisite certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report of Corporate Governance.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.

Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2017-18

- No of complaints received: NIL

- No of complaints disposed off: NIL

RISK MANAGEMENT:

Internal Control Systems and Their Adequacy:

The Company has an Internal Control System, commensurate with the size of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report, significant audit observations and corrective actions thereon are regularly presented to the Audit Committee of the Board.

The Company''s Internal Audit Department also monitors and evaluates the internal control system and submits Quarterly Reports which are placed before the Audit Committee of the Board.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In terms of provisions of the Section 152(6) of the Companies Act, 2013, Ms. Neha K. Jhunjhunwala, Director retire by rotation at the ensuing Annual General Meeting, and being eligible offers herself for re-appointment. The profile of Director seeking reappointment pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the Annual Report.

Mr. Arun Vaid, Independent Director (DIN:00351464) has ceased to be an Independent Director of the Company with effect from 12th December, 2017. The Board places on record its appreciation towards valuable contribution made by Mr. Arun Vaid during his tenure as Director of the Company.

The Board of Directors of the Company on the recommendation of Nomination and Remuneration Committee appointed Ms. Shreya Desai (DIN: 08041995) as an Additional (Independent NonExecutive) Director of the Company with effect from 12th December, 2017 subject to approval of Shareholders.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

ANNUAL PERFORMANCE EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee, CSR Committee, Nomination & Remuneration Committee, Risk Management Committee and Stakeholder Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

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

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

Members may refer to Note No 45 to the Standalone Financial Statement which sets out related party disclosures pursuant to Ind AS.

CORPORATE SOCIAL RESPONSIBILITY:

As required under Section 135 of the Companies Act, 2013, the Board in its meeting held on September 30, 2014 formulated CSR Committee for formulating the CSR Policy and implementing the Corporate Social Responsibility (CSR) activities of the Company.

The CSR Committee had met on 27th May, 2017. The Company was required to make CSR contribution aggregating to 2% of average net profits of preceding three financial years. The Committee earmarked Rs. 105.03 Lakhs towards company''s CSR activities for financial year under review. However, the Committee was by then in process of identifying areas where it could contribute money. Hence, the company could not contribute to CSR in time. Efforts would be made to contribute more in the coming years as we feel the sense of social security. The CSR Policy is available on the Company Website at www.sarlafibers.com.

The Annual Report on CSR activities is attached with this report as ''Annexure B''.

AUDITORS AND AUDITORS'' REPORT STATUTORY AUDITOR:

CNK & Associates LLP, Chartered Accountants, Mumbai (ICAI Firm Registration No. 101961W) were appointed as the Statutory Auditors of the Company for a term of five consecutive years, at the Twenty Fourth AGM of the Company held on 29th September, 2017.

They have confirmed that they are not disqualified from continuing as Auditors of the Company.

In terms of the Companies (Amendment) Act, 2017 and vide notification no S.O.1833(E) dt. 7.5.2018, the Ministry of Corporate affairs have done away with the requirement of ratification of the appointment of auditors, at each subsequent annual general meeting, by deleting the 1st Proviso to the sub-section (1) of Section 139 of the Companies act, 2013. Accordingly, the same is now onwards not required to be put up to the members for ratification.

The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation, adverse remark or disclaimer.

COST AUDITOR:

Pursuant to the provisions of Section 148 of the Companies Act, 2013, read with Rule 4 of the Companies (Cost Records and Audit) Rules, 2014 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and pursuant to the recommendations by the Audit Committee in that behalf, M/s. B.F. Modi &Associates, Vapi Cost Accountants, (Membership Number: 6955), was appointed as Cost Auditors of the Company for carrying out the Audit of Cost Records of Company maintained for the financial year from 1st April, 2017 to 31st March, 2018.

SECRETARIAL AUDITOR:

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

The Secretarial Auditor has made following qualifications / adverse remarks:

I. Under the Companies Act, 2013:

a) During financial year 2017-18, the Company has not spent full amounts due i.e. 2% of average net profit of last three financial years towards Corporate Social Responsibility activities pursuant to Section 135 of the Companies Act, 2013.

b) The Company is yet to file Statement of shares transferred to the Investor Education and Protection Fund in Form IEPF-4 as required to be made under Section 124(6) of the Companies Act, 2013.

c) The Company is yet to file Form MGT-14 for appointment of Internal Auditor.

d) The Company has continued to give Interest Free Loans to its wholly owned Subsidiaries during the financial year 2017-18.

Board''s Reply to Secretarial Auditors'' qualifications/adverse remarks:

I) Under the Companies Act, 2013:

1) The Committee formed for CSR Purpose was in process of identifying areas where it could contribute money and therefore full amount could not be contributed towards CSR objectives.

2) The Company have already deposited the amount of unclaimed dividend for financial year ended 31st March, 2010 on 22nd November, 2017 to IEPF Account. However, the Share Transfer Agent of the company is in the process of transfer of shares to IEPF Account. As soon as the procedure is completedand The Company will file relevant form with ROC.

3) The Company inadvertently missed to file the MGT 14 to ROC. The same will be filed in Due Course. .

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

DISCLOSURES

Meetings of the Board:

Four meetings of the Board of Directors were held during the year. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.

Audit Committee:

The Audit Committee comprises two Independent Directors namely Jigar Shah (Chairman) and Parantap Dave and Mr. Madhusudan Jhunjhunwala, Whole-time Director. During the year all the recommendations made by the Audit Committee were accepted by the Board.

Corporate Social Responsibility (CSR) Committee:

The CSR Committee comprises Mr. Madhusudan Jhunjhunwala (Chairman), Mr. Jigar Shah and Mr. Parantap Dave.

Vigil Mechanism:

The Company has established Vigil Mechanism and a Whistleblower policy in accordance with provisions of the Act and Listing Regulations. The Vigil Mechanism and whistle-blower policy is out on the Company''s website and can be accessed at: www.sarlafibers.com

Particulars of Loans given, Investments made, Guarantees given and securities provided:

Particulars of Loans given, Investments made, Guarantees given and securities provided along with purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in Note No.51of the Standalone financial statements.

Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo:

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in ''Annexure D'' to this Report.

Extract of the Annual Return:

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as "Annexure E".

Particulars of Employees and related Disclosures:

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

Information required pursuant to Section 197 (12) read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees:

1. The Ratio of the remuneration paid to each director to the median remuneration of the employees of the Company for the financial year 2017-18:_

Name of Director

Remuneration

Paid

Median

Remuneration

Ratio

Mr. Madhusudan S. Jhunjhunwala (Chairman, Wholetime Director)

1,38,00,000

1,51,800

90.90x

Mr.Krishnakumar M. Jhunjhunwala (Managing Director)

1,38,00,000

1,51,800

90.90x

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

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

Name of Director	Remuneration paid	Percentage Increase in current financial year
Mr. Madhusudan S. Jhunjhunwala (Chairman, Whole-time Director)	1,38,00,000	4.5%
Mr.Krishnakumar M. Jhunjhunwala (Managing Director)	1,38,00,000	NIL
Mr. Mahendra Sheth (CFO & Company Secretary)	46,03,208	5.84

3. The percentage increase in the median remuneration of employees in the financial year:

7-10%

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

208

5. Average percentage increase in salaries of non-managerial employees was 7-10% as compared to average percentage increase in managerial remuneration which was 5-7%

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

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

GENERAL:

Your Director state that no disclosure or reporting is required in respect of following matters as there were no transactions on these items during the year under review:

" Details relating to Deposits covered under Chapter V of the Act.

" Issue of Equity shares with differential voting rights as to voting, dividend or otherwise.

" Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employees'' Stock Options Plan referred to in this Report.

" The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

" No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

" No fraud has been reported by the Auditors to the Audit Committee or the Board.

ACKNOWLEDGEMENT:

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

FOR AND ON BEHALF OF BOARD OF DIRECTORS

MADHUSUDAN S. JHUNJHUNWALA

Place: Mumbai Chairman and Whole Time Director

Date: 14th August, 2018 DIN: 00097254

Mar 31, 2015

Dear Members,

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

Corporate Overview

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

FINANCIAL SUMMARY HIGHLIGHTS

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

(Rs. in Lacs)

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

Sales & Operations 27,762.72 25,558.27

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

Net Sales 26,692.80 24,605.91

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

Less: Finance Cost 514.48 637.20

Less: Depreciation &amortization 913.55 935.98

PROFIT BEFORE TAX 4,218.28 3,225.67

Less: Provision for Taxation

- Current (1,283.60) (894.00)

- Deferred 33.26 (105.15)

- Earlier Years - - - MAT credit Entitlement - -

NET PROFIT AFTER TAX 2,967.94 2,226.52

Balance bought forward 6,143.42 5,959.12

Excess provision for Dividend distribution tax written back 88.59 67.65

Effect of Change in Method of Depreciation 61.74

AMOUNT AVAILABLE FOR APPROPRIATION 9261.70 8253.29 APPROPRIATION:

Proposed Dividend 668.02 521.27

Dividend Tax 133.56 88.59

Transfer to General Reserve 1,500.00 1,500.00

BALANCE CARRIED FORWARD 6,836.62 6,143.42

BUSINESS PERFORMANCE:

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

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

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

DIRECTORS & KMP:

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

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

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

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

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

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

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

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

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

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

ANNUAL PERFORMANCE EVALUATION:

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

NOMINATION AND REMUNERATION POLICY

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

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

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

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

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

Remuneration Median Name of Director Ratio Paid Remuneration

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

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

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

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

Percentage Remuneration Name of Director PAID Increase in current financial year

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

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

Mr. Mahendra Sheth 13,91,000 24.53%

(CFO & Company Secretary)

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

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

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

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

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

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

iii) Change in the remuneration of Mr. Madhusudan

Jhunjhunwala, Mr, Krishnakumar Jhunjhunwala and

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

Percentage Remuneration Name of Director PAID Increase in current financial year

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

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

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

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

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

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

8. Variations in the market capitalization*

2014 - Rs. 117.63 Cr

2015 - Rs. 309.13 Cr

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

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

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

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

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

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

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

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

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

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

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

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

RELATED PARTY TRANSACTIONS

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

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

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

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

AUDITORS AND AUDITORS' REPORT

STATUTORY AUDITORS:

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

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

AUDITORS' QUALIFICATION:

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

SECRETARIAL AUDIT:

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

The Secretarial Auditor has made following observations.

I) Under the Companies Act, 2013:

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

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

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

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

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

II) Under the Listing Agreement:

a) The Company submitted Annual Report for the FY ended

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

Board's Reply to Secretarial Auditors' observations.

Under the Companies Act, 2013:

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

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

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

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

II) Under the Listing Agreement:

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

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

COST AUDIT:

Cost Audit was not applicable to the Company for Financial year

DISCLOSURES:

AUDIT COMMITTEE:

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

VIGIL MECHANISM:

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

CORPORATE GOVERNANCE:

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

EXTRACT OF THE ANNUAL RETURN:

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

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

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

EMPLOYEES RELATIONS:

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

ACKNOWLEDGMENT:

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

FOR AND ON BEHALF OF BOARD OF DIRECTORS

Chairman and Whole Time Director

Place: Mumbai MADHUSUDAN S. JHUNJHUNWALA

Date: August 12, 2015 DIN: 00097254

Mar 31, 2014

The Members,

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

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

1. FINANCIAL RESULTS (Rs. in Lacs)

Particulars 2013-14 2012-13

Total Income 25,558.27 24,142.12

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

Less: Finance Charges 388.89 431.08

Depreciation 935.97 1,324.87 802.72 1,233.80

Profit before Tax 3,225.67 2,651.54

Less: Provision for Tax 894.00 446.82

Provision for Deferred Tax 105.15 277.09

Provision for Wealth Tax

Profit after Tax 2,226.52 1,928.02

Prior period Adjustments

Balance brought forward 5,959.12 4,796.18

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

Surplus available for appropriation 8,253.29 6,743.79

APPROPRIATION

Transfer to the General Reserve 1,500.00 300.00

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

Dividend Tax 88.59 67.65

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

2. BUSINESS PERFORMANCE

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

OPERATIONS

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

PROFITABILITY

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

DIVIDEND

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

3. FIXED DEPOSIT

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

4. PERSONNEL

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

5. AUDITORS & AUDITORS'' REPORT

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

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

6. CORPORATE GOVERNANCE

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

7. DIRECTORS'' RESPONSIBILITY STATEMENT

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

II. Directors have selected the Accounting Policies as given in

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

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

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

8. CONSOLIDATED FINANCIAL STATEMENTS

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

9. SUBSIDIARY

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

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

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

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

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

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

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

New Product Development, process Development and optimising process parameters.

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

Introduction of several new types of Polyester and Nylon Yarns.

Future Plan of Action.

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

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

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

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

N.A.

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

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

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

Introduction of several new products

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

N.A.

C) Export Plans & Foreign Exchange earnings and outgo:

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

FOREIGN EXCHANGE EARNED FOREIGN EXCHANGE USED

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

11. ACKNOWLEDGMENT

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

FOR AND ON BEHALF OF BOARD OF DIRECTORS

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

Mar 31, 2011

The Members,

The Directors have pleasure in presenting their Eighteenth Annual Report on the business and operations of the Company together with Audited statement of Accounts for the year ended 31st March, 2011.

1. FINANCIAL RESULTS

(Rs. in Lacs)

Particulars 2010-11 2009-10

Total Income - 15,993.54 - 13,245.18

Profit before Financial Charges and Depreciation - 2,501.16 - 2,345.61

Less: Financial Charges 184.66 234.43

Depreciation 586.45 771.11 512.52 746.95

Profit before Tax - 1,730.04 - 1,598.67

Less: Provision for Tax - 220.00 - 400.00

Provision for Deferred Tax - 269.12 - 70.20

Provision for Wealth Tax - 0.25 - 0.04

Profit after Tax - 1,240.67 - 1128.43

Prior period Adjustments - 0 - 0

Balance brought forward - 3831.27 - 3,292.46

Short Provision of Income Tax of earlier years - 0 - 5.62

Surplus available for appropriation - 5,071.94 - 4,415.27

APPROPRIATION

Transfer to the General Reserve - 300.00 - 300.00

Dividend @ 45% (P.Y. 35%) - 312.76 - 243.26

Dividend Tax - 51.95 - 40.40

Balannnnnnnnd forwarded to the Balance Sheet - 4,407.23 - 3,831.60

2. BUSINESS PERFORMANCE

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

- Operations: During the year under review the sales of the Company were Rs. 15868.70 Lacs as against Rs. 13161.68 Lacs in 200910 registering an annual growth of 20.56%. The FOB value of exports increased by 19.16% from Rs. 6802.49 Lacs to Rs. 8106.11 Lacs .

- Profitability: The profit before Depreciation, Interest & Tax was Rs. 2501.16 Lacs as compared to Rs. 2345.61 Lacs in the previous year. After providing for depreciation of Rs. 586.45 Lacs (Previous Year Rs. 512.52 Lacs) & provision for taxation of Rs. 489.38 Lacs (Previous Year Rs.470.24 Lacs), there was a net profit of Rs. 1240.67 as compared to Rs.1128.43 Lacs in the Previous Year.

- Dividend: Your Directors have pleasure in recommending dividend @ 45% for the year ended 31st March 2011.

5. CONSOLIDATED RESULTS

The Consolidated income from operations and consolidated net profit of Sarla Overseas Holdings Limited including its Sarla Europe LDA and its joint venture companies, viz., Savitex SA De C.V., MRK SA De C.V. and Sarla Tekstil Filament Sanayi, is Rs. 3432.83 Lacs and Rs. 1012.40 Lacs respectively.

The Consolidated Income from Operations and consolidated net Profit of Sarla Performance Fibers Limited including its subsidiary of M/s Sarla Overseas Holdings Limited, its share of profit in Joint Venture in M/s Savitex, SA De C V, Sarla Tekstil and MRK SA De C.V. and the share of profit in Sarla Europe, a subsidiary of Sarla Overseas Holdings Limited, were Rs. 19,301.53 Lacs and Rs. 2253.07 Lacs. Local Laws do not have mandatory requirement of the Audit of the Accounts of Joint Venture Companies, viz. Savitex SA De C.V. and MRK SA De C.V., but the company has employed external auditor to give true and fair picture of the Accounts.

6. FIXED DEPOSIT

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

7. PERSONNEL:

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

8. AUDITORS:

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

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

9. DIRECTORS' RETIRE BY ROTATION:

Mr. Madhusudan Jhunjhunwala who retires by rotation and again offers himself and eligible for re-appointment.

Mr. Sanjay Karandikar who has resigned from the director of the company w.e.f. 01st July, 2011.

Mr. Anil Kumar Jain has been appointed as additional director of the Company under Section 260 w.e.f. 09th December, 2011. He will retire from the Director in the ensuing Annual General Meeting and offers himself and is eligible for re-appointment.

10. CORPORATE GOVERNANCE:

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

11. DIRECTORS' RESPONSIBILITY STATEMENT:

A Directors' Responsibility Statement as required Under Section 217(2AA) of the Companies Act 1956 is given below:-

i. Directors have followed the applicable Accounting Standards in

the preparation of the Annual Accounts and proper explanation relating to material departures have been given in Schedule 20 of Notes on Accounts forming part of the accompanying Accounts

ii. Directors have selected the Accounting Policies as given in Schedule 20 of Notes on Accounts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the company as at 31st March, 2011 and of the profits of the company for the year ended on that date.

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

iv. Directors have prepared the Annual Accounts for the year ended 31st March, 2011 on a Going Concern basis.

12. CONSOLIDATED FINALICAL STATEMENTS

In compliance with the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year. From the Consolidated Profit and Loss Account, it may be observed that the net profit after tax stands at Rs. 2,253.07 Lacs.

13. SUBSIDIARY

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

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

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

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

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

FORM 'A' Form for Disclosure of particulars with respect to conservation of Energy

Current Year Previous Year 2010-11 2009-10 A. Electricity

a) Purchased

Unit 2,27,33,040.00 18,872,288.00

Total Amount (Rs.) 7,65,89,009.00 76,169,507.00

Rate/Unit (Rs.) 3.37 4.04

b) Own Generation

1) Through diesel generator 8,27,978.00 183,872.00

Unit per ltr. of diesel oil 3.40 3.43

Cost/Unit (Rs.) 9.26 7.45

2) Through steam turbine generator Ã Ã

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

C. Furnace Oil

For Generating steam for Boiler Ã Ltrs. 1,50,200 526,951

Total Amount (Rs.) 38,86,505 12,392,981

Cost/Ltr. (Rs.) 25.88 23.52

D. Gas

For Generating steam for Boiler Ã Ltrs. 4,18,266 Ã

Total Amount (Rs.) 82,10,703 Ã

Cost/Ltr. (Rs.) 19.63 Ã

E. Others/Internal generation Ã Ã

G. Consumption per unit of production

Standard Current Year Previous Year (if any) 2010-11 2009-10

Product Ã Yarns Ã 11841 9388 (M.T.)

Electricity Ã Units Ã 1920 2030

Furnace Oil Ã Ltrs. Ã 205 196

Gas-scm Ã 181 Ã

Coal (Specify Ã Ã Ã quality)

Others (Specify) Ã Ã Ã

FORM 'B'

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

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

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

3. Future Plan of Action To meet the increasing requirement of customers around the world and development of new products.

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

b) Recurring

c) Total

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

4. Technology absorption, Continuous efforts towards adoption and innovation. improvement of process and equipment are made out to suit market requirements and to achieve optimum operational efficiency.

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

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

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

a) Technology Imported

b) Year of Import

c) Has Technology been fully Absorbed ?

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

c) Export Plans & Foreign Exchange earnings and outgo:

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

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

FOREIGN EXCHANGE EARNED FOREIGN EXCHANGE USED

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

Rs. 8,106.11 Rs. 7,226.62

15. ACKNOWLEDGMENT

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

For and on behalf of Board of Directors

(MADHUSUDAN S. JHUNJHUNWALA) Chairman & Whole Time Director

Place: Mumbai. Date : 10th May, 2011

Mar 31, 2010

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

1. FINANCIAL RESULTS

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

(Rs. in Lacs)

Particulars 2009-10 2008-09

Total Income 13,245.18 12,184.37

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

Less: Financial Charges 234.43 299.91

Depreciation 512.52 746.95 476.15 776.06

Profit before Tax 1,598.67 1,235.97

Less: Provision for Tax 400.00 324.24

Provision for Deferred Tax 70.20 60.76

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

Prior period Adjustments 0 (12.22)

Balance brought forward 3,292.46 3,044.65

Short Provision of Income Tax of earlier years 5.62 -

Surplus available for appropriation 4,415.27 3,877.06

APPROPRIATION

Transfer to the General Reserve 300.00 300.00

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

Dividend Tax 40.40 41.34

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

2. BUSINESS PERFORMANCE

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

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

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

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

5. FIXED DEPOSIT

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

6. PERSONNEL

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

7. AUDITORS & AUDITORS REPORT

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

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

8. CORPORATE GOVERNANCE

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

9. DIRECTORSRESPONSIBILITY STATEMENT

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

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

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

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

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

10.CONSOLIDATED FINALICAL STATEMENTS

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

II. SUBSIDIARY

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

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

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

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

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

Form for Disclosure of particulars with respect to conservation of Energy

Current Year 2009-10 Previous Year 2008-09

A. Electricity

a) Purchased

Unit 18,872,288.00 17,336,463.00

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

Rate/Unit (Rs.) 4.04 4.00

b) Own Generation

1) Through diesel generator 183,872.00 285,940.00

Unit per Itr. of diesel oil 3.43 3.26

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

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

C. Furnace Oil

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

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

Cost/Ltr. (Rs.) 23.52 22.53

D. Others/Internal generation - -

E. Consumption per unit of production

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

Electricity - Units - 2030 1828

Furnace Oil - Ltrs. - 196 173

Coal (Specify quality) - - -

Others (Specify) - - -

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

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

Process Development and

Optimising Process Parameters.

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

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

world and development of new products.

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

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

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

c) Total

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

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

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

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

product improvement, cost reduction, development,

import substitution, etc.

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

a) Technology Imported

b) Year of Import

c) Has Technology been fully Absorbed ?

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

b) Export Plans & Foreign Exchange earnings and outgo:

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

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

FOREIGN EXCHANGE EARNED FOREIGN EXCHANGE USED

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

Rs. 6,802.49 Rs. 6,537.73

Place: Mumbai.

Date: 17th May, 2010

13. ACKNOWLEDGMENT

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

For & on behalf of Board of Directors

(MADHUSUDAN S. JHUNJHUNWALA)

Chairman & Whole Time Director

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