Emmbi Polyarns Ltd

To

The members,

Emmbi Polyarns Limited

Your Directors have pleasure in presenting the Eighteenth Annual Report and theAudited Financial Statements for the year ended 31^st March, 2012

DIVIDEND

Your Directors are pleased to recommend a dividend of Re 0.30 per share of the facevalue of Rs. 10/- each for the year ended on 31^st March, 2012 0.20 per sharefor the previous year) subject to the Members' approval. The dividend payment amounts toRs. 49.47 lacs. In addition Rs. 8.03 lacs is payable towards distribution tax on dividend.

OPERATIONS

During the year under review, your Company has achieved Operational and other Income ofRs. 10235.30 lacs as against Rs. 7580.89 lacs during the previous year, registering anincrease of about 35% over the previous year. Profit after providing for taxes is Rs.330.87 lacs as against Rs. 266.07 lacs during the previous year, registering an increaseof about 24% over previous year.

EXPANSION PROJECT

The planned capacity expansion project for the company was for increasing productioncapacity from the 5000 MTA in pre IPO period to 17200 MTA after completion of IPO. Theexpansion was planned in two phases and the first phase of expansion to increase thecapacity to 12000 MTA has been completed during the last financial year as per schedule.Second phase of increasing the capacity from 12000 MTA to 17200 MTA has been successfullycompleted during this financial year.

EXPORTS

Exports during the year under review were Rs. 5028 lacs (CIF) as against Rs. 2818 lacs(CIF) that is a net year on Year Growth of around 78%. Exports in the previous financialyear and contributed to 48% in the net sales. Company has expanded its presence in 38countries from 29 Countries in the previous year which has resulted in this 30 % growth inthe territory.

STRATEGIC ALLIANCES

The Companies step to be Strategic partner with Global Bag s.r.o. is working in thefavour of the company. Company could develop new products and geographical areas due tothis alliance. This Company is one of the largest Jumbo bag distributors in the eastEuropean Countries, Czech Republic, Slovenia, Slovakia and Poland.

INTERNATIONAL CREDIT RATING

The Company has been rated by Dun & Bradstreet at 4A2 (Condition - Good). Therating is assigned on the basis of tangible net worth and composite appraisal of thecompany.

HUMAN RESOURCE DEVELOPMENT

The human resource philosophy and strategy of your company has been designed to attractand retain the best talent on offer. In practice it creates and nurtures work placechallenges that keep employees engaged, motivated and innovative.

A robust manpower planning process ensures that all steps from business requirements tosourcing and staffing are seamlessly aligned.

Your Company has been successful in building a performance oriented culture with highlevels of engagement and empowerment in an environment of teamwork.

Company has taken a membership of Sedex which is an internationally acclaimed webexchange for the information interchange about the ethical practices and safety issuestowards the people working in the company.

QUALITY INITIATIVES

Manufacturing activity is a heart of "Emmbi's activities.

In order to achieve the improvement in the manufacturing company has adopted theconcepts of Total Productive Maintenance (TPM).

We are conducting seminars and various training programs. We are confident thisinitiative will yield a great deal of benefit in companies operation in the coming year.

DIRECTORS

In accordance with the Articles of Association of the Company and in view of theprovisions of Section 255 of the Companies Act, 1956, Dr. Venkatesh Joshi and Mr. PrashantLohiya, Directors of the Company, will retire by rotation at the ensuing Annual GeneralMeeting and being eligible seeks re-appointment. As required the requisite details ofdirectors seeking reappointment are included in the annual report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirmthat:

1. In the preparation of the Annual Accounts for the year ended on 31^stMarch, 2012, the applicable accounting standards have been followed along with properexplanation for material departure, if any;

2. They have selected such appropriate accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive true and fair view of the state of affairs of the Company as at 31^stMarch, 2012 and of the profit of the Company for the said financial year;

3. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

4. They have prepared the said Accounts on a "going concern basis".

CORPORATE GOVERNANCE

As required by the clause 49 of the listing agreement, a report on Corporate Governanceis appended along with a certificate of compliance from the Practicing Company Secretary,forming part of this report.

The Board of Directors of the Company adopted the code of conduct and the same isposted on the Company's web site. The Directors and senior management personnel haveaffirmed their compliance with the said code.

AUDITORS

The Auditors M/s. K. J. Shah & Associates, Chartered Accountants, hold office untilthe conclusion of the ensuing Annual General Meeting and being eligible offers themselvesfor re-appointment. They have submitted a certificate of their eligibility forreappointment under section 224 (1B) of the Companies Act, 1956 and they are notdisqualified under amended section 226(3) (e) of the said Act.

COST AUDITORS

As per the Order dated 24th January, 2012 and the Companies (Cost Audit Report) Rules,2011 and the Companies (Cost Accounting Records) Rules, 2011 issued by the Ministry ofCorporate Affairs, it has become mandatory to appoint Cost Auditor for conducting the costaudit of the company.

M/s. Y. R. Doshi & Associates, Cost Accountants (Membership No. 00286F) has beenappointed as Cost Auditors of the Company to audit the cost accounts for the financialyear 2012-2013.

LISTING FEES

The Company confirms that the Annual Listing Fees due to Bombay Stock Exchange Limited(BSE) and National Stock Exchange of (India) Limited (NSE) for the financial year 2012-13have been paid.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any public deposit withinthe meaning of the Section 58A of the Companies Act, 1956.

PARTICULARS OF THE EMPLOYEES

The Company has not paid any remuneration attracting the provisions of the Companies(Particulars of Employees) Rules, 1975 read with section 217(2A) of the Companies Act,1956. Hence, no information is required to be appended in this regard.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING & OUTGO

The details as required under section 217 (1)(e) of the Companies Act 1956, read withCompanies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 aregiven below:

A) Conservation of Energy:

1. The energy required for the production is the electricity and fuel oil. Themanagement has devised various steps to conserve the energy.

2. The Company does not have any specific proposal on hand to invest the funds for theconservation of energy.

3. No particulars are required to be disclosed in Form No. "A" with respectto conservation of energy as the Company does not fall into any category of the industrieswhich should furnish the information in the said form.

B) Technology Absorption:

All the technologies are developed in house and there is no import of any technology.

C) Foreign Exchange Earnings & Outgo:

The Company has continued to maintain focus and avail of export opportunities based oneconomic considerations. During the year the Company has exports (FOB value) worth Rs.4891.27 lacs.

(Rs. In lacs)

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for the assistance andco-operation received from the shareholders, customers, dealers, suppliers, banks,financial institutions, Government authorities, Export Promotion council, other semiGovernment authorities, Administration of Union Territory of Dadra & Nagar Haveli,Stock Exchanges and business associates at all levels during the year under review. TheDirectors also wish to place on record their deep appreciation for the committed servicesof the workers, staff and executives of the Emmbi family.