Directors Report of Sharp Industries Ltd.

Sep 30, 2011

Dear Members,

The Directors have pleasure in presenting the 22nd Annual Report with the Audited Statements of Accounts of the Company for the year ended on 30th September, 2011.

FINANCIAL RESULTS (Rs.In Lac) Year ended Year ended 30.09.2011 30.09.2010

Sales 19600.81 11332.33

Profit Before Interest, Depreciation & Tax 4091.22 2227.08

Interests Financial Charges 251.81 10.60

Profit Before Depreciation & Tax 3839.41 2216.48

Less: Depreciation 478.70 350.25

Profit Before Tax 3360.71 1866.23

Provision for Taxation 0.00 0.00

Profit After Tax 3360.71 1866.23

Add / (Less): Prior Period Adjustment (83.14) (3.64)

Net Profit carried to Balance Sheet 3277.57 1862.59

OPERATIONAL PERFORMANCE

The Company conti nues to record improved performances year after year. For the year ended 30th September, 2011 it recorded further improvement in terms of sales and profitability. The Sales for the year under review increased to Rs. 19600.81 Lac as against Rs. 11332.33 Lac in the previous year, a rise of 72.96%. Similarly, Profit After Tax for the year was up Rs. 3360.71 Lac from Rs. 1866.23 Lac in the previous year, a rise of 80.08%. Expansion in volume, improvement in operational efficiency, savings in costs and addition of value added products contributed in all around improvement.

Also, the Company continued to expand its capacity of its Multi-color Laminated & Printed Flexible Packaging materials (Laminates). As reported last year, its capacity was increased to 10,000MTfrom 5,500MT and during the year under review, it was further expanded to 14,000 MT. The expanded capacity became operational during the last month of the year and its full benefit will be available from the current year onward.

DIVIDEND

Your Directors do not recommend any dividend for the year with a view to conserve resources for the expanding activities of the Company.

FINANCE

The cost of expansion in capacity from 10,000MT to 14,000MT was Rs. 1619.78 Lac and the same was fully financed from the internal accruals of the Company. The Company repaid all its institutional / bank term loans during the year under review. Fresh working capital fund based limits of Rs. 4500.00 Lac were arranged from the banks during the year under review.

FURTHER EXPANSION

The Flexible Packaging industry in India is historically growing at 15-18% p.a. and is expected to grow further at higher rate of 25%. Coupled with this, there are inherent strength of the Company in terms of technology and satisfactory relationship with its clients; the Directors feel that there are good opportunities for the Company to expand its business. Therefore, a plan had been chalked out for further expanding its operations in these businesses; details there of were given in the "Management Discussion And Analysis" appearing in the Annual Report of the previous year. This project was kept in abeyance in view of expansion in capacity from 10,000MT to 14,000MT during the year under review as discussed herein before. However, the same is being revived due to promising growth of the Flexible Packaging industry.

FIXED DEPOSITS

During the year under review, the Company has not accepted any deposit under Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975.

DIRECTORATE

Under the provisions of the Companies Act, 1956 and the Articles of Association of the Company Mr. Prajesh Manojbhai Shah and Mr. Rajesh Jayantilal Merchant retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment.

During the year Mr. Hasmukh Sheth and Mr. Vinod Sheth resigned from the office of Directorship of the Company and Mr. Rajesh Sheth was appointed as an Additional Director of the Company.

There were no other changes in Directorship of the Company during the year under review.

CORPORATE GOVERNANCE REPORT & MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Pursuant to Clause 49 of the Listing Agreement with Bombay Stock Exchange, separate sections on Corporate Governance and Management Discussion & Analysis together with a Certificate from the Company's Auditors on compliance have been included in this Annual Report.

AUDITORS

M/s. R.R. Mandali & Co., Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

COMMENT ON AUDITORS' REPORT

The Auditors' observations as stated in their Report and the Notes to the Accounts are self explanatory.

PARTICULARS OF EMPLOYEES AND OTHERS

The Company does not have any employee receiving remuneration of Rs. 5,00,000/- & more per month i.e. Rs. 60,00,000/- per annum and therefore no particulars are required to be furnished under Section 217 (2A) of the Companies Act, 1956.

INFORMATION ON ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO:

Energy conservation measures are taken on a continuing basis on various fields, which have yielded positive results in reducing energy consumption.

The Company is not covered under the list specified in Form 'A' of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm having:

i) followed in preparation of the Annual Accounts, the applicable accounting standards with proper explanation relating to material departures, if any;

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

iii) taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) prepared the Annual Accounts on a going concern basis.

STATUTORY DISCLOSURES

None of the Directors is disqualified under the provisions of Section 274(l)(g) of the Companies Act, 1956. The Directors have made the requisite disclosures as required under the provisions of the Companies Act, 1956 and Clause 49 of the Listing Agreement.

APPRECIATION

Your Directors place on record their deep appreciation for the continued valuable contribution and the spirit of dedication of the employees at all levels. Your Directors also express their deep gratitude for the cooperation and support extended by the financial institutions, banks, Government authorities / agencies and other stakeholders. Propelled by the strong vision and powered by internal viability of the Company, your Directors look forward to brighter future with confidence.



For & On Behalf of the Board

Place : Mumbai. RAJESH SHETH

Date : 1st December, 2011 CHAIRMAN

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Sep 30, 2009

The Directors have pleasure in presenting the 20th Annual Report with the Audited Statement of Accounts of the company for the period ended on 30th September, 2009.

FINANCIAL RESULTS

(Rs. In Lacs)

Period ended Period ended 30.09.2009 30.09.2008

Profit/(Loss) before Depreciation & Taxes 1087.05 829.04 (Add)/ Less: Depreciation 221.15 253.93

Profit/(Loss) before Tax 865.90 575.11

Profit/(Loss) after Tax 864.55 574.77

Add / (Less): Prior Period Adjustment 5.96 126.29

Net Profit/(Loss) 858.59 701.06

Add: Balance brought forward from previous year (8159.07) (8860.13)

Balance Carried to Balance Sheet (7300.48) (8159.07)

OPERATIONAL PERFORMANCE

The Company was able to maintain the operational level, though the market position continued to remain tight. Company however continues to endeavor to increase the margins on its product and is hopeful that with the restructuring of the organizational set up it would be in a position to fetch the targeted results in the coming future.

The Sales and Income from operation for the year under review has reached to Rs. 6976.82 lacs as against Rs. 6118.26 lacs in the previous year. The Company earned a net profit of Rs. 864.55 lacs compared to the profit of Rs. 574.77 for the previous year.

DIRECTORATE

Under the Provisions of the Companies Act, 1956 and the Articles of Association of the Company Mr. Ritesh Khetan and Mr. Vilesh Sheth retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

There being no change in directorship during the year under review.

CORPORATE GOVERNANCE REPORT & MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance and Management Discussion & Analysis together with a certificate from Companys Auditor on compliance forms a part of the Annual Report.

AUDITORS

M/s. R.R. Mandali & Co., Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

COMMENT ON AUDITORS REPORT

With respect to the qualification raised by the statutory auditor in audit report, your directors submit that one of the major reasons behind all the reservation and qualification is bad financial position of the company. The Company is facing the major risk due to General Slowdown in the industry, over capacity and low reservation might threaten profitability and cheaper Exports of Consumer goods may affect sales of FMCG products thereby decreasing its packaging requirements. However, during this difficult period the company has taken number of initiatives on cost reduction, improvement in efficiency and productivity as a result company could achieve encouraging results.

Another important reason of these qualifications are due to absence of key personnel and staff responsible for financial and accounting matters, non availability of financial information and accounting data. However the constant efforts are made by the company to overcome the situation and the settle all its operations.

COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF

DIRECTORS) RULES, 1988

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT AND TECHNOLOGY

ABSORPTION:

All energy conservation measures are taken on a continuing basis on various fields, which have yielded positive results in reducing energy consumption.

The company is not covered under the list specified in Form VA of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs. in Lacs) a Expenditure incurred in Foreign Currency - Travelling Nil

b Earnings in Foreign Currency (FOB Value) Nil

RESPONSIBILITY STATEMENT

Pursuant to section 217(2AA) of the Companies (Amendment) Act, 2000, the Directors confirm :

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

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

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

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

PARTICULARS OF EMPLOYEES

There are no employees.covered in terms of Sec. 217(2A) of the companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended and forming part of this report.

ACKNOWLEDGMENTS

Your Directors place on record their deep sense of appreciation for the valuable contribution and the spirit of dedication by the employees at all levels during the period. Your Directors also express their deep gratitude for the cooperation and support extended by the financial institutions and banks and look forward to their continued support in the future too.

For & On Behalf of the Board

SD/-

Place : Mumbai. VINOD SHETH

Date: 1st December, 2009 CHAIRMAN