DIRECTORS' REPORT

Dear Shareholders,

Your Directors have pleasure in presenting their 22nd Annual Report on the business and operations of the Company and the accounts for the Financial Year ended on 31st March, 2015.

Performance:

During the financial year, your Company recorded Net Sales and Other Income of Rs. 19169.17 Lacs as compared to Rs. 47276.74 Lacs of previous year. The Company incurred a Net Loss of Rs. 7486.38 Lacs as compared to previous year's Net Loss of Rs. 8776.28 Lacs. The Company incurred Cash losses of Rs. 3245.63 Lacs as compared to Cash Losses of Rs. 5615.17 Lacs of previous year.

Dividend:

In absence of profits for the year ended and past accumulated losses, your directors do not recommend payment of any dividend for the year ended 31st March, 2015.

Management Discussion and Analysis Report:

Management Discussion and Analysis Report for the year under review, which also deals with the opportunities, challenges and the future outlook for the Company, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange of India, is presented in a separate section forming part of the Annual Report.

Updates on Expansion/modernisation:

During the Year under review, in order to utilize the surplus backward capacity of CP plant with aim for improvement in profitability, the company has undertaken Direct Polymer Melt (DPM POY) project for production of POY by utilizing Direct

Polymer Melt produced by CP plant. The plant has been implemented in August 2014 and commercial operation of DPM POY plant has started in October 2014. The Capacity of the plant is 75347 MTPA. During the implementation of this project some old/obsolete POY Lines have also been replaced/sold.

Corporate Debt Restructuring (CDR):

The detailed key features of the CDR Proposal are given in under Notes No. 2 of Notes forming part of Notes to Accounts given in this Annual Report.

Internal Control System and Adequacy:

The Board has adopted the policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of financial disclosures.

The Company's Internal Audit department evaluates the efficiency and adequacy of internal control system and gives its report and recommendations to the Chairman of Audit Committee and based on Internal Audit Report the corrective actions are taken.

Subsidiary/Joint Ventures/Associate Companies:

Your Company does not have any subsidiary company or joint ventures however M/s. Raj Money Market Limited is its Associate Company, holding 35.55% Equity Shares (as on 31st March, 2015) in the Company. As on 31st March, 2015 the Company had a Net Worth of Rs. 127847935 and registered a Net Loss of (Rs. 725033).

Deposits:

The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and no such amount of principal or interest was outstanding as on the Balance Sheet date.

Listing with Stock Exchanges:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to National Stock Exchange Limited (NSE) and BSE Limited (BSE) where the Company's Shares are listed.

Statutory Auditors:

At the Annual General Meeting held on 30th September, 2014, M/s. K.M. Garg & Co., Chartered Accountants (Registration No. 120712W), were appointed as Statutory Auditors of the Company to hold office till the conclusion of the four consecutive Annual General Meetings to be held in year 2018. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of Auditors shall be placed for ratification at every Annual General Meeting.

Accordingly, the appointment of M/s. K.M. Garg & Co., Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the shareholders. In this regards, the Company has received a letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 139 of Companies Act, 2013 and that they are not disqualified for such re-appointment within the meaning of Section 141 of Companies Act, 2013.

Auditors' observation and Management's response to Auditors' observation:

The Directors refer to the Auditors' observation in the Auditors' Report and provide their explanation as under:

i) In respect of Note 2 of the Financial Statement regarding amount payable towards recompense:

The recompense payable is contingent on various factors including improved performance of the Company (Borrowers) and many other conditions, the outcome of which currently is materially uncertain and cannot be determine.

ii) In respect of Auditors observation in Financial Statements regarding cash losses incurred by the Company:

It is clarified that the cash losses were primarily attributable to the lower volumes due to prevailing uncertain economic conditions, lower sales volume coupled with increase in depreciation and interest/finance cost.

Cost Auditor:

The Central Government had approved appointment of Mr. Jayant J. Paleja, Cost Accountant, Mumbai as Cost Auditor to conduct Cost Audit relating to the products manufactured by your Company for the financial year 2014-2015, the E-Form 23C for his appointment was filed on 23rd June, 2014. Further the Company has also appointed him to conduct the Cost Audit for the financial year 2015-2016 as per Section 148 of Companies Act, 2013 and his remuneration has to be ratified at the ensuing Annual General Meeting.

Secretarial Auditor:

The Company had appointed Prasad Raghunath Baraskar, Practicing Company Secretary to undertake Secretarial Audit of the Company, pursuant to Section 204 of Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 to conduct Secretarial Audit for the financial year 2014-2015.

The Secretarial Audit Report for the financial year 2014-2015 forms part of the Annual Report as Annexure I to the Board's Report.

Share Capital and Net Worth:

During the financial year there was no change in the Share Capital of the Company. However the Company took Members approval on 14th March, 2015 for issue 8.00 crs Equity Shares of Rs. 1/- each at par aggregating to Rs. 8.00 crs. The Company has received in-principle approvals from National Stock Exchange of India (NSE) on 30th March, 2015 and from BSE Limited on 15th April, 2015.

Further the Company has on 24th April, 2015 allotted 8.00 crs Equity Shares of Rs. 1/- each at par on preferential basis to allottees belonging to the category of Promoters and Non Promoters, consequently the paid-up share capital increased from Rs. 40,64,54,000 as on 31st March, 2015 to Rs. 48,64,54,000 as on the date of allotment.

Further the net worth of the Company has reduced to (Rs. 992.35 Lacs) as compared to Rs. 6503.52 Lacs in previous year. Since the Company's accumulated losses had resulted into erosion of more than fifty percent of its peak net worth during the immediately preceding four financial years i.e. Rs. 15279.80 Lacs, the Company proposes to make necessary reference to the Board for Industrial and Financial Reconstruction (BIFR) in due course of time pursuant to the provisions of Sick Industrial Companies (Special Provisions) Act, 1985.

Extract of the annual return:

Pursuant to Section 134 (3) (a) of the Companies Act, 2013 an extract of the Annual Return in Form No. MGT - 9 is annexed herewith as Annexure II.

Conservation of energy, technology absorption and foreign exchange earnings and outgo:

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

(A) Conservation of energy:

The conservation of energy is of paramount importance and not only necessary for conserving national resources but also inevitable across all industry, as it has far reaching impact on the bottom line of the company. We have taken several steps in this regard related to our manufacturing activity but the key steps are-

1. We have taken initiatives for replacement of existing lights with "LED Lights" to save power consumption and during the current year we have completed this process in all the key areas where power consumption is high. In the ensuing year, we will complete the process of replacement of Existing Light with "LED Light" in all the area where it requires.

2. One of our key raw materials is PTA, which is available both in bags and tanker. Now we are bringing material in tankers as it directly fed in the process rather than bringing in Bag. As material brought in bags, require additional consumption of electrical energy on account of charging of electrical hoist for lifting and pulling down the bags.

3. The cooling Tower Fan and Air Cooler Fan are one of the major components which consume energy. We have optimised use of number of fans depending upon the temperature difference during the day and night.

4. We have optimised the plant process parameter, process activity and reduced the load on the cooling tower and chiller.

5. We have started using of turbo vent in place of electrical operated exhaust fan to contain electrical energy consumption.

(B) Technology absorption:

1. We have installed modern Power Capacitor Bank for increasing power factor which will directly reduce electric consumption.

2. We have implemented a Direct Polymer Melt line for direct consumption of melt instead of Polyester Chips for producing POY. This has actually reduced our process flow and not only improved quality but also reduced power consumption ratio per ton of production

(C) Foreign exchange earnings and Outgo:

The particulars regarding foreign exchange earnings and outgo are given in Note No. 37 and 39 Notes forming part of the Accounts.

Corporate Social Responsibility (CSR) Initiatives:

The Company has constituted a Corporate Social Responsibility (CSR) Committee as per provisions of Section 135 of Companies Act, 2013 to spend in various CSR initiatives as provided under schedule VII of the Companies Act, 2013 and rules made thereunder.

However due to losses suffered and your company been into Corporate Debt Restructuring (CDR), we didn't spend into any CSR activities/projects. However your Company is enthusiastic to serve the society at large, which it will do in the coming years.

Directors:

During the year the Company has re-designated Mr. Sushil Kumar Kanodia, from Chief Executive Officer to Chief Executive Officer and Chief Financial Officer of the Company.

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Association of the Company, Mr. Naval Babulal Kanodia, Whole Time Director of the Company retires by rotation and is eligible for re-appointment.

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.

Board 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 and that of its committees and individual Directors. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

Remuneration Policy:

The Board of Directors has on recommendations of the Nomination & Remuneration Committee outlined policy for selection & appointment of Directors, Key Managerial Personnel & Senior Management and also to decide their remuneration along with the perks. The Nomination & Remuneration Committee revises the remuneration from time to time depending upon the performance of the Company and the Individual Director's/Key Managerial Personnel and other Senior Management. At Director level the Company pay's remuneration to Mr. Naval Babulal Kanodia, Whole Time Director of the Company.

Training of Independent Directors:

The Independent Directors appointed on the Board are made familiarised with the business and affairs of the Company in which the Company operates and its long terms plans and expectations.

At the time of appointment of Independent Director, the Company issues a formal letter of appointment providing in details their functions, roles & responsibility as an Independent Directors.

Board of Directors Meeting:

During the year ended 31st March, 2015, the Company had Nine (09) Board Meetings and the gap between the two meetings of the Board is as per Companies Act, 2013. The details of the Board Meetings are provided in the Corporate Governance Report.

Committees of Board:

Following are the various Committees formed by Board:

• Audit Committee

• Nomination & Remuneration Committee

• Stakeholders Relationship Committee

• Allotment Committee

• Risk Management Committee

• Corporate Social Responsibility Committee

The details of the composition of committees, its roles and responsibility along with no. of meetings held are given in the Report of Corporate Governance.

Vigil Mechanism:

The Company has established a vigil mechanism for its Directors and Employees to report genuine concerns relating any violations legal or regulatory requirements or misconduct in the Company through its Whistle Blower Policy. And also to report concerns of unethical behavior, actual or suspected, fraud or violation of the Company's code of conduct and ethics policy, incorrect or misrepresentation of any financial statements and reports thereon.

The protected disclosures will be dealt by the Chairman of the Audit Committee and the Chairman should address the same carry out the investigation and take needful action.

The policy on Whistle Blower as approved by the Board of Directors is uploaded on company's website.

Particulars of loans, guarantees or investments under Section 186:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Related Party Transactions:

All the related party transactions which were entered by the Company during the financial year were done on arm's length basis and were in the ordinary course of business of the Company. Also there are no materially significant related party transactions made by the company with Directors, Key Managerial Personnel, Promoter or any other designated persons which may conflict with the interest of the Company at large.

The policy on Materiality of Related Party Transactions as approved by the Board of Directors is uploaded on company's website.

Particulars of Employees and related disclosures:

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

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are required to be provided in the Annual Report. However there were no employees who were in receipt of remuneration for which details need to be disclosed.

Directors' Responsibility Statement:

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that—

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

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

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

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

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

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

Risk Management Policy:

The Company has laid down procedures to inform the members of the Board about the risk assessment and minimization procedures and the same is reviewed by the Board periodically. A Risk Management Committee has been duly constituted to formulate policy for framing, implementing and monitoring the risk management plan and to take remedial actions.

Prevention of Sexual Harassment at Workplace:

The Company has adopted Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the workplace, to provide protection to employees at the workplace. The Company has constituted Internal Complaints Committee as per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 to consider and redress complaints of sexual harassment. The Committee has not received any complaints of sexual harassment during the year.

Corporate Governance Certificate:

Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors' adhere to the requirements set out by the Securities and Exchange Board of India, Corporate Governance practice and have implemented all the prescribed stipulations.

Report on Corporate Governance, as stipulated under Clause 49 of the Listing Agreements with the Stock Exchanges in India, forms part of the Annual Report. Certificate from the Auditor of the Company M/s. K.M. Garg & Co., Chartered Accountants confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is annexed to this Report.

Acknowledgements:

Your Directors' would like to express their grateful appreciation for assistance and co-operation received from the Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of the Executives, Staff members and Workers of the Company.

For and on behalf of the Board of the Directors

SD/- Rajkumari Kanodia

Non Executive Chairperson & Director

Dated: 30th May, 2015

Place: Mumbai