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                                   —                 —
 
 B. Coal (Specify quantity 
 & where used)                               —                 —
 
 C. Furnace Oil
 
 For Generating steam for
 Boiler – 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 – Ltrs.                       4,18,266                —
 
 Total Amount (Rs.)                  82,10,703                —
 
 Cost/Ltr. (Rs.)                         19.63                —
 
 E. Others/Internal 
 generation                                  —                —
 
 G. Consumption per unit of production
 
                       Standard     Current Year  Previous Year
                        (if any)         2010-11        2009-10
 
 Product – Yarns              —            11841           9388
 (M.T.)
 
 Electricity – Units          —             1920           2030
 
 Furnace Oil – Ltrs.          —              205            196
 
 Gas-scm                      —              181              —
 
 Coal (Specify                —                —              —
 quality)
 
 Others (Specify)             —                —              —
 
 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