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Sheela Foam Ltd. के निदेशक की रिपोर्ट

Mar 31, 2025

Your Directorsâ have pleasure in presenting the 53^rd Annual Report on the business, operations and financial performance of the Company along with the Consolidated Audited Balance Sheet and Statement of Profit & Loss for the year ended 31^st March, 2025.

FINANCIAL INFORMATION

(H in Crores)
Particulars	Consolidated		Standalone
Particulars	2024-25	2023-24	2024-25	2023-24
Revenue from operations	3439.19	2982.31	2587.51	1879.52
Profit before Finance Cost, Depreciation & Tax	380.84	417.64	318.22	306.73
Less: Finance Cost	120.54	68.62	94.45	43.75
Cash Profit	260.30	349.02	223.77	262.98
Less: Depreciation	182.61	115.79	88.65	58.44
Profit before Tax and exceptional items	77.69	233.23	135.12	204.54
Gain on Exceptional Items	30.59	22.70	11.91	17.82
Profit before tax	108.28	255.93	147.03	222.36
Add/(Less): Income Tax	(51.23)	(50.74)	(45.39)	(45.96)
Add/(Less): Deferred Tax	38.48	(10.68)	10.45	(8.17)
Profit after Tax before share of profit/(loss) of joint venture	95.53	194.51	112.09	168.23
Share of profit/(loss) of joint venture	1.17	(10.58)	-	-
Profit for the year	96.70	183.93	112.09	168.23
Other Comprehensive Income	6.50	(2.70)	(0.07)	-
Total Comprehensive Income for the year	103.20	181.23	112.02	168.23

During the current year, Revenue of the Company, on standalone basis is H 2587.51 Crores, last year Revenue of the Company was H 1879.52 Crores. The Profit for the year for the current year decreased to H 112.09 Crores as against the profit for the year of H 168.23 Crores of last year.

On consolidated basis the overall Revenue increased from H 2982.31 crores to H 3439.19 Crores. The consolidated profit for the year decreased from H 183.93 Crores to H 96.70 Crores.

DIVIDEND

Board of Directors do not recommend any dividend for the year 202425. The entire profit is being ploughed back in the business.

CHANGE IN SHARE CAPITAL

During the year under review, the paid-up equity share capital of the Company has been increased from H 54,34,86,705 divided into 10,86,97,341 equity shares of H 5 /- each to H 54,35,29,980 divided into 10,87,05,996 equity shares of H 5 /- each pursuant to allotment of Equity Shares under the Employee Stock Option Plans of the Company. These Equity Shares rank pari-passu with the existing Equity Shares of the Company in all respects. During the year under review, your Company has not issued any Equity Share with differential rights, Sweat Equity Shares or Bonus Shares.

SUBSIDIARIES

As on 31^st March, 2025 the Company has seven subsidiaries and ten steps down subsidiaries. As required under the provisions of Section 129 of the Companies Act, 2013, read with Companies (Accounts)

Rule, 2013, a statement containing salient features of the financial statements of subsidiaries is provided in the prescribed format AOC-1 as Annexure-A of the Board Report.

MATERIAL SUBSIDIARIES

In accordance with Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (Listing Regulations), Joyce Foam Pty. Ltd (Joyce Foam) Australia, International Foam Technologies Spain, S.L.U. and Kurlon Enterprise Limited are material non-listed subsidiaries. The Company has formulated a policy for determining material subsidiaries. The policy has been uploaded on the website of the Company at https://www. sheelafoam.com/

COMPOSITE SCHEME OF ARRANGEMENT OF AMALGAMATION OF KURLON ENTERPRISE LIMITED ALONG WITH ITS SUBSIDIARIES WITH THE COMPANY

The Board of Directors of the Company (âBoardâ), at its meeting held on March 28, 2024, approved the draft Composite Scheme of Arrangement. The scheme involves the amalgamation of Belvedore International Limited, Kanvas Concepts Private Limited, Kurlon Retail Limited, Komfort Universe Products and Services Limited, and Starship Value Chain and Manufacturing Private Limited into Kurlon Enterprise Limited, followed by the amalgamation of Kurlon Enterprise Limited with Sheela Foam Limited, along with their respective shareholders and creditors.

The Company filed an application with the National Company Law Tribunal (NCLT), Mumbai, on December 11, 2024. The NCLT issued its first motion order on March 12, 2025, following which a Shareholders''

Meeting was held on April 28, 2025, to obtain the approval of the shareholders. The equity shareholders of the Company approved the Scheme with the requisite majority.

INVESTMENT MADE BY THE COMPANY IN SHARE CAPITAL

The Company has acquired 17.70 % equity stake on 29^th August, 2023 in House of Kieraya Limited. During the year the equity stake has been increased to 43.89% by acquisition of additional 56,00,995 equity shares in the House of Kieraya Limited.

The Company has invested amounting H 8,37,77,265 in the shares of wholly owned subsidiary M/s Sheela Foam Trading LLC in Dubai, United Arab of Emirates.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Section 136 of the Companies Act, 2013 and the applicable Accounting Standard on the Consolidated Financial Statements, your Directors have attached the consolidated financial statements of the Company which form a part of the Annual Report.

The financial statements including consolidated financial statements and the audited accounts of each of the subsidiary are available on the Companyâs website www.sheelafoam.com

DIRECTORSâ RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed.

b) The directors have selected such accounting policies and applied them consistently and made judgements and estimates that were 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 or loss of the Company for the year under review.

c) The directors have 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 have prepared the annual accounts on a going concern basis.

e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

CORPORATE GOVERNANCE

In accordance with SEBI Regulations, a separate report on Corporate Governance is given in Annexure-B along with the Practicing Company

Secretaries (PCS) Certificate on its compliance. The Practicing Company Secretaries (PCS) Certificate does not contain any qualification, reservation and adverse remark.

RELATED PARTIES TRANSACTIONS

The particulars of Contracts or Arrangements with related parties, in the prescribed form, are attached as Annexure-C

RISK MANAGEMENT

The Company has formulated a Risk Management Policy duly reviewed by the Board of Directors. The policy includes risk identification, analysis and prioritization of risk and development of risk mitigation plans. The Company has constituted a Risk Management and ESG Committee to look into the risk involved with the Company and its mitigation.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate Internal Financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The report on the Internal Financial Control issued by M/s. MSKA & Associates., Chartered Accountants, Statutory Auditors of the Company in view of the provisions under the Companies Act, 2013 is given in their audit report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Appointment of directors on the Board of the Company, is based on the recommendations of the Nomination & Remuneration Committee. NRC identifies and recommends to the Board, persons for appointment on the Board, after considering the necessary and desirable competencies.

The NRC considers positive attributes like integrity, maturity, judgement, leadership position, time and willingness, financial acumen, management experience and knowledge in one or more fields of technology, law, management, sales, marketing, administration, research, etc.

Independent Directors should fulfill the obligations of independence as per the Act and Regulation 25 of the SEBI (LODR) Regulations, 2015 in addition to the general criteria stated above. All the Independent Directors of the Company are enrolled in the Databank of IDs maintained by Indian Institute of Corporate Affairs, an entity under the Ministry of Corporate Affairs. Their registrations are renewed when due. It is ensured that a person to be appointed as a director has not suffered any disqualification under the Act or any other law to hold such an office.

The composition of the Board and details of remuneration paid to the directors during the year 2024-25 are given in the Corporate Governance Report forming part of this Report.

CHANGES IN DIRECTORS OR KMPS

As per the provisions of the Companies Act, 2013, Mr. Rahul Gautam will retire by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, seeks re-appointment. The Board has recommended his reappointment.

Nilesh Sevabrata Mazumdar had given his resignation from the post of Chief Executive Officer (India Business) 0n March 31, 2025. He will be relieved in due courses as per the policy of the Company.

DECLARATION U/S 149(6) OF THE ACT

All the Independent Directors (IDs) have given declarations u/s 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, confirming that they meet the criteria of independence as laid down under the said Section/ Regulation. The Directors of the Company have also confirmed that they were not disqualified to be appointed as directors as per Section 164(2) of the Companies Act, 2013 and that they have not been debarred by SEBI or any other statutory authority to hold an office of director in a company.

DIVERSITY OF THE BOARD

The Company believes that diversity is important to the work culture at any organisation. In particular, a diverse Board, among others, will enhance the quality of decisions by utilizing different skills, qualifications and professional experience for achieving sustainable and balanced development.

SATUTORY AUDITORS

M/s MSKA & Associates, Chartered Accountants (Firm Registration No. 105047W), appointed as the Statutory Auditor of the Company for the five consecutive financial years from 2021-22 to 2025-26 and they will hold office until the conclusion of the 54^th Annual General Meeting of the Company to be held in the year 2026. Material Subsi details (See Item A) provided separately.

Details of material subsidiaries including the date and place of incorporation and the name and date of appointment of the statutory auditors of such subsidiaries:

SL No.	Name and Place of Material Subsidiaries	Date of Name of Appointment Incorpora- statutory tion auditors ^Date
1	Kurlon Enterprise Limited (india)	03.10.2011 M/s. MSKA & 15.05.2024 Associates
2	Joyce Foam Pty Ltd (Australia)	03.10.2005 NEC Ac- 30.09.2016 countants Pty Ltd
3	International Foam Technologies Spain, S.L.U. (Spain)	12.06.2019 Grant Thor- 20.04.2023 naton. S.L.P.

AUDITORS'' REPORT

There is no adverse observation of Auditors'' on financial statements of the company. The Auditors'' Report, read with the relevant notes to accounts, are self-explanatory and therefore does not require further explanation.

CONSOLIDATED FEES PAID TO STATUTORY AUDITORS

Particulars	Year ended 31 March, 2025	Year ended 31 March,2024
Audit Fees	55	78
Certification Work	03	17
Reimbursement of expenses	05	02
Total	63	97

COST AUDITOR

As per section 148 read with Companies (Audit and Auditors) Rule, 2014 M/s Mahesh Singh & Co, Cost Accountants ((Firm Registration No.: 100441),) was appointed, to conduct the cost records of the Company for the Financial Year 2024-25, by the Board of Directors. Cost Auditor will provide its report to the Board of directors. They have been reappointed as Cost Auditors for the year 2025-26. A resolution for ratification of their remuneration for the year 2025-26, as required under the Companies Act, 2013, forms part of the Notice convening the ensuing AGM.

INTERNAL AUDITOR

M/s PKF Sridhar Santhanam LLP, Chartered Accountants appointed as the Internal Auditor of the company and they will report to Board of Directors or the respective committee. The internal audit will help company to review the operational efficiency and assessing the internal controls. It also reviews the safeguarding of assets of the Company.

SECRETARIAL AUDITOR

The company had engaged M/s AVA Associates, Company Secretaries as Secretarial Auditor to conduct Secretarial audit for the year 202425. The report on secretarial audit is annexed as Annexure-D to the Directorâs Report. The report does not contain any qualification, reservation or adverse remark.

As per the requirements of the SEBI (LODR) Regulations, The Report of secretarial audit of Kurlon Enterprise Limited, an unlisted material subsidiary of the Company is also annexed as Annexure - D1 and available on Companyâs website at www.shelafoam.com.

CORPORATE SOCIAL RESPONSIBILITY(CSR)

In terms of Companies Act, 2013, your company has to undertake Corporate Social Responsibility programme. The disclosure as per Rule 9 of the Companies (Corporate Social Responsibility Policy) Rule, 2014 is attached as Annexure-E.

AUDIT COMMITTEE

The composition of Audit Committee is provided in the Corporate Governance Report that forms part of this Directorâs Report. There was no instance of the Board not accepting the recommendation of the Audit Committee

VIGIL MECHANISM

The Company has established a vigil mechanism through a Whistle Blower Policy. The Company can oversee the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who may express their concerns pursuant to this policy. The policy is uploaded on the website of the Company at http://www. sheelafoam.com.

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 sexual harassment of women at Workplace (Prevention, Prohibition and Redressal) Act 2013. The Internal system has been set up to redress complaints received regarding sexual harassment. No complaint was received under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

MEETINGS OF THE BOARD

During the year, 7 meetings of the Board of Directors were held.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the Financial Statements.

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

A. Following measures were taken by company for energy conservation in the year 24-25:

The disclosure related with energy is mentioned in the Business Responsibility & Sustainability Report (BRSR) forming part of Directorsâ Report.

B. The expenses incurred on Research and Development have been included in BRSR annexed forming part of Directorsâ Report.

C. The earnings from exports were H 12.45 Crore (Previous Year H 23.15 crores) and payments in foreign exchange were H 156.83 Crore (Previous Year H184.24 crores).

LISTING AGREEMENTS

Your Company has entered into agreements with Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE), in compliance with Regulation 109 of the SEBI LODR Regulations 2015.

PARTICULARS OF EMPLOYEES

The information as required under Section 197 of the Companies Act 2013 read with Rule 5(1) & 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in Annexure-G to the Boardâs Report.

MANAGEMENT DISCUSSION AND ANALYSIS

In terms of provisions of Regulation 34 of the Listing Regulations, the Managementâs discussion and analysis is set out in this Annual Report.

PUBLIC 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.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Companyâs operations in future.

APPLICABILITY OF IBC CODE

Neither any application was made, nor any proceedings were pending under the IBC Code during the year.

ONE TIME SETTLEMENTS

The Company has not entered into any one-time settlement of debt during the year under review.

DISCLOSURE UNDER SECRETARIAL STANDARDS

Applicable Secretarial Standards i.e. SS-1 and SS-2 relating to âMeeting of the Board of Directorsâ and âGeneral Meetingsâ, respectively, have been duly followed by the Company

BOARD EVALUATION MECHANISM

Pursuant to the provisions of Companies Act, 2013 and the Listing Regulations, the Board has carried out annual performance evaluation of its own performance, those of directors individually and of various committees.

The performance of individual directors was evaluated on parameters, such as, number of meetings attended, contribution in the growth and formulating the strategy of the Company, independence of judgement, safeguarding the interest of the Company and minority shareholders, time devoted apart from attending the meetings of the Company, active participation in long term strategic planning, ability to contribute by introducing best practices to address business challenges ESG and risk etc. The directors expressed their satisfaction with the evaluation process.

BONUS SHARE

The company had not issued any bonus shares during the year.

EMPLOYEE STOCK OPTION SCHEME

The Companyâs Employee Stock Option Schemes are in line with Companyâs philosophy of sharing benefits of growth with the growth drivers and are in compliance with the applicable Securities and Exchange Board Of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and Companies Act, 2013. Disclosures with respect to Stock Options, as required under Rule 12(9) of The Companies (Share Capital and Debentures) Rules, 2014 and Regulation

14 of the Regulations, are available in the Annexure H to this Report, Notes to the Financial Statements and can also be accessed on the Companyâs website at https://www.sheelafoam.com/index.html

DIVIDEND DISTRIBUTION POLICY

The company has adopted Dividend Distribution Policy and there is no change in policy during the year. As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the policy is hosted at our website of the Company and following is web link: https:// backend.sheelafoam.com/wp-content/uploads/2025/03/dividend-distribution-policy-sfl.pdf

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT(BRSR)

Business Responsibility Report/Sustainability Report is annexed as Annexure-I.

FINANCE AND CREDIT RATING

A credit rating agency has given âIND AA/Stableâ rating to the debenture of the Company on March 21, 2025, same is available on https://www. sheelafoam.com/corporate-announcement.html

ANNUAL RETURN

Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return for FY 2023-24 is uploaded on the website of the Company and the same is available on https://www.sheelafoam.com/annual-return.html

ACKNOWLEDGEMENT

The Board wish to express and place on record their thanks to the Companyâs Distributors, Dealers and Business Associates for their excellent effort and the customers for their continued patronage of the Companyâs products. Your Directors also wish to place on record their appreciation for the devoted services of the Executive, Staff, and workers of the Company at all levels enabling the Company to achieve the excellent performance during the year.

The Boardâs also appreciate the valuable co-operation and continued support received from Companyâs bankers and all the government agencies and departments.

The Board also express their sincere thanks to all the Shareholders for the continued support and trust they have reposed in the Management.

Mar 31, 2024

The Directors'' have pleasure in presenting the 52^nd Annual Report on the business, operations and financial performance of the Company along with the Consolidated Audited Balance Sheet and Statement of Profit & Loss for the year ended 31^st March, 2024.

FINANCIAL INFORMATION

(Rs. in Crores)
Particulars	Consolidated		Standalone
Particulars	2023-24	2022-23	2023-24	2022-23
Revenue from operations	2982.31	2,873.32	1879.52	2038.57
Profit before Financial Charges, Depreciation & Tax	417.64	383.78	306.73	283.32
Less: Financial Charges	68.62	21.07	43.75	8.13
Cash Profit	349.02	362.71	262.98	275.19
Less: Depreciation	115.79	89.62	58.44	41.08
Profit before Tax and exceptional items	233.23	273.09	204.54	234.11
Gain on Exceptional Items	22.70	-	17.82	-
Profit before tax	255.93	273.09	222.36	234.11
Add/(Less): Income Tax Earlier year''s tax	(50.74)	(74.66)	(45.96)	(63.93)
Add/(Less): Deferred Tax	(10.68)	2.21	(8.17)	0.91
Profit after Tax before share of profit/(loss) of join venture	194.51	200.84	168.23	171.09
Share of profit/(loss) of join venture	(10.58)	-	-	-
Profit for the year	183.93	200.84	168.23	171.09
Other Comprehensive Income	(2.70)	12.52	-	(3.95)
Total Comprehensive Income for the year	181.23	213.36	168.23	167.14

has been uploaded on the website of the Company at http://www. sheelafoam.com.

*Kurlon Enterprise Limited became the subsidiary of our company from October 20, 2023.

During the current year, Net Revenue of the Company, on standalone basis is H 1880 Crores, last year Net Revenue of the Company was H 2039 Crores. The Profit for the year for the current year decreased marginally by 1.67% to H 168 Crores as against the profit for the year of H 171 Crores of last year.

On consolidated basis the overall Revenue increased from H2873 crores to H 2982 Crores. The consolidated profit for the year decreased from H 201 Crores to H 184 Crores.

DIVIDEND

Board of Directors do not recommend any dividend for the year 2023-24. The entire profit is being ploughed back in the business.

SUBSIDIARIES

As on 31^st March, 2024 the Company has seven subsidiaries and ten steps down subsidiaries. As required under the provisions of Section 129 of the Companies Act, 2013, read with Companies (Accounts) Rule, 2013, a statement containing salient features of the financial statements of subsidiaries is provided in the prescribed format AOC-1 as Annexure-A of the Board Report.

MATERIAL SUBSIDIARIES

In accordance with Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (Listing Regulations), Joyce Foam Pty. Ltd (Joyce Foam) Australia, International Foam Technologies Spain, S.L.U. and Kurlon Enterprise Limited* are material non-listed subsidiaries. The Company has formulated a policy for determining material subsidiaries. The policy

AMALGAMATION OF WHOLLY OWNED SUBSIDIARY WITH THE COMPANY

The Board of Directors of the Company (''Board'') at its meeting held on November 08, 2022, has approved the Scheme of Amalgamation of the wholly owned subsidiary of the Company, i.e., International Comfort Technologies Private Limited ("ICTPL" or "Transferor Company") with Sheela Foam Limited ("SFL" or "Transferee Company") and their respective Shareholders and Creditors under sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("Scheme"). A joint application of amalgamation of International Comfort Technologies Private Limited, wholly owned subsidiary with Sheela Foam Limited was filed with the National Company Law Tribunal (NCLT) Delhi on December 06, 2022. Accordingly, the aforesaid scheme of arrangement has been approved by National Company Law Tribunal, Bench at Delhi ("NCLT") vide order date February 09, 2024. Subsequently with effect from March 01, 2024 the ICTPL merged into SFL.

ISSUE OF EQUITY SHARE

The Company has raised money by the way of Qualified Institutions Placement ("QIP") and allotted 1,11,31,725 equity shares of face value H 5/- each to the eligible qualified institutional buyers (QIB) at a price of H 1,078/- per equity share (including a premium of H 1,073 per equity share) aggregating to H 1,200.00 Crores on September 26, 2023. The issue was made in accordance SEBI (Issue of Capital and Disclosure

Requirements) Regulations, 2018. QIP proceeds were for part-funding the acquisition of equity shares of Kurlon Enterprise Limited and for general corporate purposes. As on March 31, 2024, 100% funds have been utilised for acquiring equity stake in ''Kurlon Enterprise Limited''.

ISSUE OF DEBENTURE

The Company has further raised the additional required funds through issue of 72,500(Seventy-Two Thousand Five Hundreds) unsecured NonConvertible Debentures in four tranches of 18,125(Eighteen Thousand One Hundreds Twenty Five) each having a fixed coupon rate of 8.45%, of face value of H 1,00,000(Rupees One Lakhs only) amounting H 725.00 Crores (Rupees Seven Hundreds Twenty-Five Crores Only) on October 06, 2023 through private placement within the borrowing limits of the Company as approved by the shareholders. The said funds were utilised acquiring equity stake in ''Kurlon Enterprise Limited''.

INVESTMENT MADE BY THE COMPANY IN SHARE CAPITAL

During the year, the Company has acquired 35% stake of ''House of Kieraya Private Limited (Furlenco)'' on fully diluted basis w.e.f. August 29, 2023.

The Company has acquired 3,46,05,369 equity shares representing 94.67% shareholding in ''Kurlon Enterprise Limited'' for a consideration of H 1,940.78 Crores resulting in transfer of its control to the company w.e.f. October 20, 2023. The Company has additionally acquired 9,40,582 equity shares and 67,569 equity shares representing 2.58% and 0.18% shareholding for the consideration of INR 55.33 crores and INR 3.92 crores respectively, resulting in total equity shareholding of 97.43% as at March 31, 2024.

A wholly owned subsidiary M/s Sheela Foam Trading LLC in Dubai, United Arab of Amirates was incorporated and invested AED 5,00,000.

CONSOLIDATED FINANCIAL STATEMENTS

The financial statements including consolidated financial statements and the audited accounts of each of the subsidiary are available on the Company''s website www.sheelafoam.com

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed.

d) The directors have prepared the annual accounts on a going concern basis.

e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

CORPORATE GOVERNANCE

In accordance with SEBI Regulations, a separate report on Corporate Governance is given in Annexure-B along with the Practicing Company Secretaries (PCS) Certificate on its compliance. The Practicing Company Secretaries (PCS) Certificate does not contain any qualification, reservation and adverse remark.

RELATED PARTIES TRANSACTIONS

The particulars of Contracts or Arrangements with related parties, in the prescribed form, are attached as Annexure-C

RISK MANAGEMENT

INTERNAL FINANCIAL CONTROLS

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

As per the provisions of the Companies Act, 2013, Rakesh Chahar will retire by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, seeks re-appointment. The Board has recommended his reappointment.

Nilesh Sevabrata Mazumdar had appointed as the Chief Executive Officer (India Business) and Amit Kumar Gupta had appointed as Group Chief Financial Officer during the year under review.

AUDITORS

M/s MSKA & Associates, Chartered Accountants, appointed as the Statutory Auditor of the Company for the five consecutive financial years from 2021-22 to 2025-26 and they will hold office until the conclusion of the 54^th Annual General Meeting of the Company to be held in the year 2026.

AUDITORS'' REPORT

There is no adverse observation of Auditors'' on financial statements of the company. The Auditors'' Report, read with the relevant notes to accounts are self-explanatory and therefore does not require further explanation.

CONSOLIDATED FEES PAID TO STATUTORY AUDITORS

Detail of total fees for all services paid by the listed entity and its subsidiaries, on a consolidated basis, to the statutory auditor and all entities in the network firm/ network entity of which the statutory auditor is a part, as mentioned in Note 43 of Consolidated Financial Statement published through annual reports for the Financial Year 2023-24, are as below:-

Consolidated		(H in Lakhs)
Particulars	Year ended	Year ended
Particulars	31 March, 2024	31 March,2023
Audit Fees	78	38.00
Certification Work	17	2.75
Reimbursement of expenses	2	1.95
Total	97	42.70

COST AUDITOR

As per section 148 read with Companies (Audit and Auditors) Rule, 2014 M/s Mahesh Singh & Co, Cost Accountants is appointed, to conduct the cost records of the Company for the Financial Year 202324, by the Board of Directors.

Cost Auditor will provide its report to the Board of directors.

INTERNAL AUDITOR

SECRETARIAL AUDITOR

The company had engaged M/s AVA Associates, Company Secretaries as Secretarial Auditor to conduct Secretarial audit for the year 202324. The report on secretarial audit is annexed as Annexure-D to the Director''s Report. The report does not contain any qualification, reservation or adverse remark.

CORPORATE SOCIAL RESPONSIBILITY(CSR)

In terms of Companies Act, 2013, your company has to undertake Corporate Social Responsibility programme. The disclosure as per

Rule 9 of the Companies (Corporate Social Responsibility Policy) Rule, 2014 is attached as Annexure-E

AUDIT COMMITTEE

The composition of Audit Committee is provided in the Corporate Governance Report that forms part of this Director''s Report.

VIGIL MECHANISM

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013

MEETINGS OF THE BOARD

During the year, 9 meetings of the Board of Directors were held.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the Financial Statements.

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

A. Following measures were taken by company for energy conservation in the year 23-24:

The disclosure related with energy is mentioned in the Business Responsibility & Sustainability Report (BRSR) forming part of Directors'' Report.

B. The expenses incurred on Research and Development have been included in BRSR annexed forming part of Directors'' Report.

C. The earnings from exports were H 23.15 Crore (Previous Year H 14.03 crores) and payments in foreign exchange were H 184.24 Crore (Previous Year 164.05 crores).

LISTING AGREEMENTS

PARTICULARS OF EMPLOYEES

MANAGEMENT DISCUSSION AND ANALYSIS

In terms of provisions of Regulation 34 of the Listing Regulations, the Management''s discussion and analysis is set out in this Annual Report.

PUBLIC 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.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

BOARD EVALUATION MECHANISM

BONUS SHARE

The company had not issued any bonus shares during the year.

EMPLOYEE STOCK OPTION SCHEME

The Company''s Employee Stock Option Schemes are in line with Company''s philosophy of sharing benefits of growth with the growth drivers and are in compliance with the applicable Securities and Exchange Board Of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and Companies Act, 2013. The Company on November 02, 2023 and February 06, 2024 granted 1,02,592 and 1,57,260 shares respectively to various employees who exercised their options.

Disclosures with respect to Stock Options, as required under Rule 12(9) of The Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of the Regulations, are available

in the Annexure H to this Report, Notes to the Financial Statements and can also be accessed on the Company''s website at https://www.sheelafoam.com/index.html

DIVIDEND DISTRIBUTION POLICY

The company has adopted Dividend Distribution Policy and there is no change in policy during the year. As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the policy is hosted at our web site at www.sheelafoam.com and is also attached as Annexure-I.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT(BRSR)

Business Responsibility Report/Sustainability Report is annexed as Annexure-J.

FINANCE AND CREDIT RATING

The company managed its finances prudently, meeting the business needs and maintaining sufficient liquidity at all times to navigate the impact of external challenges. The Company prudently managed its finances in rising interest rate scenario. The Company did raise 72500 debenture on October 06, 2023. India Rating & Research, a credit rating agency has given ''IND AA/Stable'' rating to the debenture of the Company on September 25, 2023, same is available on https://www.sheelafoam.com/corporate-announcement.html

ANNUAL REPORT

Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return for FY 2022-23 is uploaded on the website of the Company and the same is available on https://www.sheelafoam.com/annual-return.html

ACKNOWLEDGEMENT

Your Directors wish to express and place on record their thanks to the Company''s Distributors, Dealers and Business Associates for their excellent effort and the customers for their continued patronage of the Company''s products. Your Directors also wish to place on record their appreciation for the devoted services of the Executive, Staff, and workers of the Company at all levels enabling the Company to achieve the excellent performance during the year.

Your Directors'' also appreciate the valuable co-operation and continued support received from Company''s bankers and all the government agencies and departments.

The Directors also express their sincere thanks to all the Shareholders for the continued support and trust they have reposed in the Management.

Mar 31, 2023

Your Directorsâ have pleasure in presenting the 51^st Annual Report on the business, operations and financial performance of the Company along with the Consolidated Audited Balance Sheet and Statement of Profit & Loss for the year ended 31^st March, 2023.

FINANCIAL INFORMATION

(H in Crores)
	Consolidated		Standalone
	2022-23	2021-22	2022-23	2021-22
Revenue from operations	2,873.32	2,865.58	2,019.82	2,008.21
Profit before Financial Charges, Depreciation & Tax	383.77	394.11	300.80	304.06
Less: Financial Charges	21.07	16.97	6.37	7.11
Cash Profit	362.70	377.14	294.43	296.95
Less: Depreciation	89.62	80.78	33.76	32.39
Profit before Tax	273.08	296.36	260.67	264.56
Add/(Less): Income Tax Earlier yearâs tax	(77.98)	(83.09)	(67.45)	(70.32)
Add/(Less): Deferred Tax	7.96	5.46	1.64	3.07
Profit after Tax	203.06	218.73	194.86	197.31
Other Comprehensive Income	12.51	(1.85)	(3.84)	(1.16)
Total Comprehensive Income for the year	215.57	216.88	191.02	196.15

During the current year, Net Revenue of the Company, on standalone basis, increased from H 2008 Crores to H 2020 Crores. The Profit after tax for the current year decreased marginally by 1.02% to H 195 Crores as against the profit after tax of H 197 Crores of last year.

On consolidated basis the overall Revenue increased from H 2866 Crores to H 2873 Crores. The consolidated profit after tax decreased from H 219 Crores to H 203 Crores.

DIVIDEND

Board of Directors do not recommend any dividend for the year 2022-23. The entire profit is being ploughed back in the business.

SUBSIDIARIES

As on 31^st March, 2023 the Company has six subsidiaries and five steps down subsidiaries. As required under the provisions of Section 129 of the Companies Act, 2013, read with Companies (Accounts) Rule, 2013, a statement containing salient features of the financial statements of subsidiaries is provided in the prescribed format AOC-1 as Annexure-A of the Board Report.

Overseas Subsidiaries:-

The Company has one 100% subsidiary, Joyce Foam Pty. Ltd (Joyce Foam) in Australia. Joyce Foam is the largest producer of Foam in Australia and supplies its high-quality Foam to Global Mattresses and Furnishing Companies. Joyce Foam recorded a turnover of H 438 Crore in FY 2022-23, as compared with H 430 Crore in FY 2021-22, and has posted post tax profit of H 5 Crore in FY 2022-23, as against H 15 Crore in FY 2021-22.

Joyce Foam Pty Ltd has one wholly own subsidiary Joyce W C NSW Pty Ltd.

In addition, the Company has one more wholly owned overseas subsidiary, International Foam Technologies Spain, S.L.U. and a step-down subsidiary, Interplasp S.L.U. in Spain. International Foam Technologies Spain, S.L.U. recorded a turnover of H 395 Crore in FY 2022-23, as compared with H 430 Crore in FY 2021-22, and has posted post tax profit of H 24 Crore in FY 202223, as against H 18 Crore in FY 2021-22.

Indian Subsidiaries:-

Staqo World Private Limited (Staqo) is a wholly owned subsidiary. This company is into the business of Information Technology with initial footprints in this space in domestic and overseas market. During this year, the company has achieved a turnover of H 23 crores with profit after tax of H 2 Crores as against a turnover of H 18 Crores with a profit after tax of H 2 Crores in FY 2021-22.

International Comfort Technologies Pvt Ltd is a wholly owned subsidiary. This company is into the business of Manufacturing of Foam, Mattress & home comfort products. During this year, the company has achieved a turnover of H 85 Crores with loss after tax of H 20 Crores as against a turnover of H 8 Crores with a loss after tax of H 7 Crores in FY 2021-22.

Your Company has two other wholly owned subsidiaries as under which has no significant business:

1) Divya Software Solutions Private Limited

2) Sleepwell Enterprises Private Limited

MATERIAL SUBSIDIARIES

In accordance with Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (Listing Regulations), Joyce Foam Pty. Ltd (Joyce Foam) Australia and International Foam Technologies Spain, S.L.U. are material non-listed subsidiaries. The Company has formulated a policy for determining material subsidiaries. The policy has been uploaded on the website of the Company at http://www.sheelafoam.com.

AMALGAMATION OF WHOLLY OWNED SUBSIDIARIES WITH THE COMPANY

A joint application of amalgamation of International Comfort Technologies Private Limited, wholly owned subsidiary with Sheela Foam Limited was filed with the National Company Law Tribunal (NCLT) Delhi during the year under review. The application is accepted by the NCLT and is under process of amalgamation.

CONSOLIDATED FINANCIAL STATEMENTS

The financial statements including consolidated financial statements and the audited accounts of each of the subsidiary are available on the Companyâs website www.sheelafoam.com

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed.

d) The directors have prepared the annual accounts on a going concern basis.

e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

CORPORATE GOVERNANCE

RELATED PARTIES TRANSACTIONS

The particulars of Contracts or arrangements with related parties, in the prescribed form, are attached as Annexure-C

RISK MANAGEMENT

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate Internal Financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The report on the Internal Financial Control issued by M/s. MSKA & Associates, Chartered Accountants, Statutory Auditors of the Company in view of the provisions under the Companies Act, 2013 is given in their audit report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

As per the provisions of the Companies Act, 2013, Mr. Rakesh Chahar will retire by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, seeks reappointment. The Board has recommended his reappointment.

Mr. Vijay Kumar Chopra had retired from the office of Independent Director on 06^th June, 2022 and Mr Nikhil Datye had resigned from the post of group CFO w.e.f 05^th December, 2022.

AUDITORS

AUDITORS'' REPORT

There is no adverse observation of Auditorsâ on financial statements of the company. The Auditorsâ Report, read with the relevant notes to accounts are self-explanatory and therefore does not require further explanation.

CONSOLIDATED FEES PAID TO STATUTORY AUDITORS

Consolidated

(in H lakhs)
	Year ended	Year ended
Particulars	31 March,	31 March,
	2023	2022
Audit Fees	38.00	41.00
Certification Work	2.75	2.00
Reimbursement of expenses	1.95	1.00
Total	42.70	44.00

COST AUDITOR

As per section 148 read with Companies (Audit and Auditors) Rule, 2014 M/s Mahesh Singh & Co, Cost Accountants is appointed, to conduct the cost records of the Company, for the Financial Year 2022-23, by the Board of Directors.

Cost Auditor will provide its report to the Board of directors. INTERNAL AUDITOR

During the year M/s PKF Sridhar Santhanam LLP, Chartered Accountants appointed as in place of M/s S. S. Kothari Mehta & Co. as the Internal Auditor and they will report to Board of Directors. The internal audit will help company to review the operational efficiency and assessing the internal controls. It also reviews the safeguarding of assets of the Company.

SECRETARIAL AUDITOR

The company had engaged M/s AVA Associates, Company Secretaries as Secretarial Auditor to conduct Secretarial audit for the year 2022-23. The report on secretarial audit is annexed as Annexure-D to the Directorsâ Report. The report does not contain any qualification, reservation or adverse remark.

CORPORATE SOCIAL RESPONSIBILITY(CSR)

AUDIT COMMITTEE

The composition of Audit Committee is provided in the Corporate Governance Report that forms part of this Directorsâ Report.

VIGIL MECHANISM

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013

MEETINGS OF THE BOARD

During the year, 7 meetings of the Board of Directors were held.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the Financial Statements.

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

A. Following measures were taken by company for energy conservation in the year 22-23:

The disclosure related with energy is mentioned in the Business Responsibility & Sustainability Report (BRSR) forming part of Directorsâ Report.

B. The expenses incurred on Research and Development have been included in BRSR Report annexed forming part of Directorsâ Report.

C. The Company has introduced new process by establishing Variable Pressure Foaming Machine apart from other measure to reduce the consumption of energy and upgraded technology.

D. The earnings from exports were H 14.03 Crore (Previous Year H 54.99 crores) and payments in foreign exchange were H 164.05 Crore (Previous Year H 183.81 crores).

LISTING AGREEMENTS

PARTICULARS OF EMPLOYEES

MANAGEMENT DISCUSSION AND ANALYSIS

In terms of provisions of Regulation 34 of the Listing Regulations, the Managementâs discussion and analysis is set out in this Annual Report.

PUBLIC 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.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Companyâs operations in future.

BOARD EVALUATION MECHANISM

The performance of individual directors was evaluated on parameters, such as, number of meetings attended, contribution in the growth and formulating the strategy of the Company,

independence of judgement, safeguarding the interest of the Company and minority shareholders, time devoted apart from attending the meetings of the Company, active participation in long term strategic planning, ability to contribute by introducing best practices to address business challenges ESG and risk etc. The directors expressed their satisfaction with the evaluation process.

BONUS SHARE

The company issued bonus shares in the ratio of 1:1 during the year under review.

DIVIDEND DISTRIBUTION POLICY

The company has adopted Dividend Distribution Policy and there is no change in policy during the year. As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the policy is hosted at our web site at www.sheelafoam.com and is also attached as Annexure-H.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT(BRSR)

Business Responsibility Report/Sustainability Report is annexed as Annexure-I.

ACKNOWLEDGEMENT

Your Directors wish to express and place on record their thanks to the Companyâs Distributors, Dealers and Business Associates for their excellent effort and the customers for their continued patronage of the Companyâs products. Your Directors also wish to place on record their appreciation for the devoted services of the Executive, Staff, and workers of the Company at all levels enabling the Company to achieve the excellent performance during the year.

Your Directorsâ also appreciate the valuable co-operation and continued support received from Companyâs bankers and all the government agencies and departments.

The Directors also express their sincere thanks to all the Shareholders for the continued support and trust they have reposed in the Management.

By Order and on behalf of the Board of Sheela Foam Limited

Place: Noida (Rahul Gautam)

Date : May 17, 2023 Chairman and Managing Director

Mar 31, 2022

Your Directors have pleasure in presenting the 50^th Annual Report on the business, operations and financial performance of the Company along with the Consolidated Audited Balance Sheet and Statement of Profit & Loss for the year ended 31^st March, 2022.

FINANCIAL INFORMATION

('' in Crores)
Particulars	Consolidated		Standalone
	2021-22	2020-21	2021-22	2020-21
Revenue from operations	2981.81	2473.19	2124.44	1693.86
Profit before Financial Charges, Depreciation, Tax & Exceptional Item	394.10	414.40	304.06	284.67
Profit before Financial Charges, Depreciation & Tax	394.10	414.40	304.06	284.67
Less: Financial Charges	16.97	17.68	7.11	8.68
Cash Profit	377.13	396.71	296.95	275.99
Less: Depreciation	80.78	72.87	32.39	32.53
Profit before Tax	296.35	323.84	264.56	243.46
Add/(Less): Income Tax Earlier year''s tax	(83.48)	(84.18)	(70.71)	(60.81)
Add/(Less): Deferred Tax	5.85	0.49	3.47	(1.50)
Profit after Tax	218.72	240.15	197.32	181.15
Other Comprehensive Income	(1.85)	18.81	(1.16)	2.10
Total Comprehensive Income for the year	216.87	258.96	196.15	183.25

During the current year, Net Revenue of the Company, on standalone basis, increased from '' 1698 Crores to '' 2124 Crores. The Profit after tax for the current year increased by more than 8.9% to '' 197 Crores as against the profit after tax of '' 181 Crores of last year.

On Consolidated basis the Overall Revenue increased from '' 2437 crores to '' 2982 Crores. The Consolidated profit after tax decreased from '' 240 Crores to '' 219 Crores.

PRESENT STATUS & FUTURE OUTLOOK

During the partial lockdown throughout the year, the sale of Mattresses increased. The Company has increased its share in the domestic mattress market. The company continues to retain its leadership position in Mattress and Foam Products.

During the year the prices of critical raw materials like Polyol and TDI increased substantially.

Second wave of Covid 19 has come with more severity in year 2021-22. This has resulted in lock down in most parts of the Country. This has adversely impacted the sales of April and May 2021. Your Company is using innovative techniques, like Sleepwell@Home, Aggressive Online Marketing, focus on selling products which are good for health etc. Company is selling all its products treated

with Neem Fresche which means immunity from various respiratory problems caused by Dust Mites, Bacteria & Fungi.

The Company has increased its Market share by selling low price mattresses. This has caused shift from unorganized market to organized market. The Company has also increased its market penetration and lot of Multi Brand Outlets have been converted to Exclusive Branded Outlets of Sleepwell. Company also maintains its leadership position in Foam Market both in Furniture cushions and B2B segment. It continues to innovate foams for newer applications.

The Company has focused to exports to US markets from India and Spain. It expects to make substantial exports to US markets from India as well as from its subsidiary in Spain.

DIVIDEND

Board of Directors do not recommend any dividend for the year 2021-22. The entire profit is being ploughed back in the business.

SUBSIDIARIES

As on 31 March, 2022 the Company has six subsidiaries and five steps down subsidiaries. As required under the provisions of Section 129 of the Companies Act, 2013,

read with Companies (Accounts) Rule, 2013, a statement containing salient features of the financial statements of subsidiaries is provided in the prescribed format AOC-1 as Annexure-A of the Board Report.

Overseas Subsidiaries:-

The Company has one 100% subsidiary, Joyce Foam Pty. Ltd (Joyce Foam) Australia. Joyce Foam is the largest producer of Foam in Australia and supplies its high-quality Foam to Global Mattresses and Furnishing Companies. Joyce Foam recorded a turnover of '' 430 Crore in FY 2021-22, as compared with '' 413 Crore in FY 2020-21, and has posted post tax profit of '' 15 Crore in FY 2021-22, as against '' 27 Crore in FY 2020-21.

Joyce Foam Pty Ltd has one wholly own subsidiary Joyce W C NSW Pty Ltd.

In addition, the Company has one more wholly owned overseas subsidiary, International Foam Technologies Spain, S.L.U. and a step down subsidiary, Interplasp S.L.U. Spain. International Foam Technologies Spain, S.L.U. recorded a turnover of '' 430 crore in FY 2021-22, as compared with '' 336 crore in FY 2020-21, and has posted post tax profit of '' 18 Crore in FY 2021-22, as against ''35 Crore in FY 2020-21.

Indian Subsidiaries:-

Staqo World Private Limited (Staqo) is a wholly owned subsidiary. This company is into the business of Information Technology with initial footprints in this space in domestic and overseas market. During this year, the company has achieved a turnover of '' 18 crores with profit after tax of '' 2 Crores as against a turnover of '' 13 crores with a profit after tax of '' 3 crores in FY 2020-21.

Your Company has three other wholly owned subsidiaries as under:

1) Divya Software Solutions Private Limited

2) Sleepwell Enterprises Private Limited

3) Internationl Comfort Technologies Pvt Ltd

MATERIAL SUBSIDIARIES

In accordance with Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (Listing Regulations), none of the subsidiaries is a material non-listed subsidiary. The Company has formulated a policy for determining material subsidiaries. The policy has been uploaded on the website of the Company at http://www.sheelafoam.com.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Section 136 of the Companies Act, 2013 and the applicable Accounting Standard on the Consolidated Financial Statements, your Directors have

attached the consolidated financial statements of the Company which form a part of the Annual Report.

The financial statements including consolidated financial statements and the audited accounts of each of the subsidiary are available on the Company''s website www.sheelafoam.com

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed.

d) The directors have prepared the annual accounts on a going concern basis.

e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

CORPORATE GOVERNANCE

In accordance with SEBI Regulations, a separate report on Corporate Governance is given in Annexure-B along with the Auditors'' Certificate on its compliance. The Auditors'' Certificate does not contain any qualification, reservation and adverse remark.

RELATED PARTIES TRANSACTIONS

The particulars of Contracts or arrangements with related parties, in the prescribed form, are attached as Annexure-C

RISK MANAGEMENT

The Company has formulated a Risk Management Policy duly reviewed by the Board of Directors. The policy includes risk identification, analysis and prioritization

with the relevant notes to accounts are self-explanatory and therefore does not require further explanation.

CONSOLIDATED FEES PAID TO STATUTORY AUDITORS

Detail of total fees for all services paid by the listed entity and its subsidiaries, on a consolidated basis, to the statutory auditor and all entities in the network firm/ network entity of which the statutory auditor is a part, as mentioned in Note 38 of Consolidated Financial Statement published through annual reports for the Financial Year 2021-22, are as below:-

Consolidated		('' in Lakhs)
Particulars	Year ended 31 March, 2022	Year ended 31 March, 2021
Audit Fees	41	29.04
Certification Work	2	3.54
Reimbursement of expenses	1	0.74
Total	44	32.32

of risk and development of risk mitigation plans. The Company has constituted a Risk Management Committee to look into the risk involved with the Company and its mitigation.

INTERNAL FINANCIAL CONTROLS

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

As per the provisions of the Companies Act, 2013, Mr. Tushaar Gautam will retire by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, seeks re-appointment. The Board has recommended his reappointment.

Board also recommends the reappointment of Mr. Rahul Gautam as a Managing Director whose term ends on 31^stMarch 2022 for a period of five (5) years from 1^st April 2022 to 31^st March 2027, re-appointment of Mrs. Namita Gautam as a Whole-time Director whose term ends on 31^st March 2022 for a period of five (5) years from 1^st April 2022 to 31^st March 2027, re-appointment of Mr. Rakesh Chahar as a Wholetime Director whose term ends on 31^st March 2022 for a period of Five years from 1^st April 2022 to 31^st March 2027 and re-appointment of Mr. Tushaar Gautam as a Whole-time Director whose term ends on 31^st March 2022 for a period of Five years from 1^st April 2022 to 31^st March 2027.

Mr Nikhil Datye was appointed w.e.f 1^st June 2021 as group CFO and Mr Dhruv Mathur had superannuated during the year.

Board further recommends the increase in second term of Mr. Som Mittal, Independent Director from four (4) years to five (5) years, Mr. Anil Tandon, Independent Director from three (3) years to five (5) years, Lt. Gen. (Dr.) V.K. Ahluwalia, Independent Director from three (3) years to five (5) years and Ms. Meena Jagtiani, Independent Director from three (3) years to five (5) years.

AUDITORS

M/s MSKA & Associates, Chartered Accountants, appointed as the Statutory Auditor of the Company for the five consecutive financial years from 2021-22 to 202526 and they will hold office until the conclusion of the 54^thAnnual General Meeting of the Company to be held in the year 2026.

AUDITORS'' REPORT

There is no adverse observation of Auditors'' on financial statements of the company. The Auditors'' Report, read

COST AUDITOR

As per section 148 read with Companies (Audit and Auditors) Rule, 2014 M/s Mahesh Singh & Co, Cost Accountants were appointed, to conduct the cost records of the Company for the Financial Year 2021-22, by the Board of Directors.

Cost Auditor will provide its report to the Board of directors.

INTERNAL AUDITOR

The company has engaged M/s S. S. Kothari Mehta & Co., Chartered Accountants as Internal Auditor to conduct internal audit for the year 2021-22. The Internal Auditor report to Board of Directors. The internal audit will help company to review the operational efficiency and assessing the internal controls. It also reviews the safeguarding of assets of the Company.

SECRETARIAL AUDITOR

The company has engaged M/s AVA Associates, Company Secretaries as Secretarial Auditor to conduct Secretarial audit for the year 2021-22. The report on secretarial audit is annexed as Annexure-D to the Board''s Report. The report does not contain any qualification, reservation or adverse remark.

CORPORATE SOCIAL RESPONSIBILITY(CSR)

AUDIT COMMITTEE

The composition of Audit Committee is provided in the Corporate Governance Report that forms part of this Annual Report.

VIGIL MECHANISM

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013

MEETINGS OF THE BOARD

During the year, 6 meetings of the Board of Directors were held.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the Financial Statements.

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

A. Following measures were taken by company for energy conservation in the year 21-22:

1) Installed 376 KWp solar power plant at Greater Noida unit to reduce the electricity consumption from power distribution company, It helps to generate app. 60% of our total demand through solar power.

2) Replaced 10 nos. of electric hoist with hydraulic power pack at foaming crane , it results into increasing the efficiency of the machine and saving of electricity.

3) Increased use of Screw compressors for compressed air with variable frequency drives instead of starter to increase the efficiency and saving of electricity.

4) Conducted third party energy audits to identify the potential opportunities for energy saving

and further optimization in energy consumption. This is an ongoing process that the Company will continue across all manufacturing locations.

5) Replaced conventional MH and street lights with 100% energy efficient LED lights across all the units with LDR,Lux, Time switch and motion sensor based control system.

6) Optimization of running time of AC on the basis of ambient temperature condition inside the UPS room.

7) Replaced old Air conditioner with energy efficient new generation Air conditioner with non-CFC gases, lead to reduction in power consumption as well as nothing to harm Ozone layer.

8) Increasing the use of Variable Frequency drives instead of starters for the electric motors to reduce the electricity consumption and to increase the efficiency.

B. The expenses incurred on Research and Development have been included in respective expense heads.

C. The Company has introduced new process to reduce the consumption of energy and upgraded technology whenever required.

D. The earnings from exports were ''54.99 Crore(Previous Year '' 21.33 crores) and payments in foreign exchange were ''183.81 Crore (Previous Year 141.81crores).

LISTING AGREEMENTS

PARTICULARS OF EMPLOYEES

The information as required under Section 197 of the Companies Act 2013 read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in Annexure-F and Annexure-G to the Board''s Report.

MANAGEMENT''S DISCUSSION AND ANALYSIS

In terms of provisions of Regulation 34 of the Listing Regulations, the Management''s discussion and analysis is set out in this Annual Report.

PUBLIC 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.

year. As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the policy is hosted at our web site at www.sheelafoam.com and is also attached as Annexure-I.

ACKNOWLEDGEMENT

Your Directors also appreciate the valuable co-operation and continued support received from Company''s bankers and all the government agencies and departments.

The Directors also express their sincere thanks to all the Shareholders for the continued support and trust they have reposed in the Management.

By Order and on behalf of the Board of Sheela Foam Limited

Place: Noida (Rahul Gautam)

Date : May 12, 2022 Chairman and Managing Director

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

BOARD EVALUATION MECHANISM

The performance of individual directors was evaluated on parameters, such as, number of meetings attended, contribution in the growth and formulating the strategy of the Company, independence of judgement, safeguarding the interest of the Company and minority shareholders, time devoted apart from attending the meetings of the Company, active participation in long term strategic planning, ability to contribute by introducing best practices to address business challenges and risk etc. The directors expressed their satisfaction with the evaluation process.

BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report/Sustainability Report is annexed as Annexure-H.

DIVIDEND DISTRIBUTION POLICY

The company has adopted Dividend Distribution Policy and there is no change in policy during the

Mar 31, 2019

Dear Members,

The Directors have pleasure in presenting the 47th Annual Report on the business, operations and financial performance of the Company along with the Consolidated Audited Balance Sheet and Statement of Profit & Loss for the year ended 31st March, 2019.

Financial Information

(Rs. in Crores)

Particulars	Consolidated		Standalone
	2018-19	2017-18	2018-19	2017-18
Revenue from operations	2141.45	2004.45	1813.76	1695.66
Profit before Financial Charges, Depreciation & Tax	238.58	237.40	214.03	216.03
Less: Financial Charges	9.62	8.67	7.34	5.75
Cash Profit	228.96	228.73	206.69	210.28
Less: Depreciation	39.53	35.24	31.09	27.78
Profit before Tax	189.43	193.49	175.60	182.50
Add/(Less): Income Tax	52.33	(58.93)	47.18	(55.93)
Earlier yearâs tax	(1.11)	--	(1.11)	--
Add/(Less): Deferred Tax	4.46	(0.85)	5.86	(0.63)
Profit after Tax	133.75	133.71	123.67	125.93
Other Comprehensive Income	(0.92)	(0.57)	(0.92)	(0.88)
Total Comprehensive Income for the year	132.83	133.14	122.75	125.05

During the year 2017-2018 Excise duty till 30th June 2017 is included in Revenue. Further after implementation of GST the Revenue excludes GST but includes outward freight. For proper Comparison of Growth & Profitability Ratios, the comparable Revenue figures are given hereunder:-

(Rs. in Crores)

Particulars	Consolidated		Standalone
	2018-19	2017-18	2018-19	2017-18
Revenue from operations	2141.45	2004.45	1813.76	1695.66
Less: Excise Duty	-	39.13	-	39.13
Add: Freight	-	10.29	-	10.29
Net Revenue from operations	2141.45	1975.61	1813.76	1666.82

During the current year, Net Revenue of the Company, on standalone basis, increased from Rs.1666.82 Crores to Rs.1813.76 Crores registering a growth of 8.81% over last year. The Profit after tax for the current year decreased by 1.79% to Rs.123.67 Crores as against the profit after tax of Rs.125.93 Crores of last year.

Present Status & Future Outlook

Your Companyâs share in the organised Mattress Market is more than 25%. Retaining the leadership position in Mattresses and Foam Products.

The Company registered a growth of approx. 9% in turnover despite the growth of industries are substantially low.

As large part of Mattress industry is unorganised and around 70% of the population still does not use modern mattresses, the growth potential for your company is immense. The share of organised market, as well as of your Company is expected to increase with the full implementation of GST. Various other factors like awareness about good sleep for health, increase in disposable income, ever increasing demand for housing due to nuclear families and rapid urbanisation, will propel the demand of modern mattresses.

Similarly the potential for Foam Consumption continues to remain high. India has one of the lowest per capita foam consumption and with the development of Economy, the demand of Foam is bound to increase. Company expects to increase its Market Share on the strength of about 50 years of expertise and continuous Research & Development leading to sustained good quality.

The Company continues to expand its dealer network to increase the penetration. The focus is on increasing Exclusive Brand Outlets (EBO) as well as Multi Brand Outlets (MBO) in new territories. Most of the Sleepwell products are to be sold through EBOs, whereas low and Mid level priced mattresses will be sold through MBOs.

Dividend

Board of Directors do not recommended any dividend for the year 2018-19. The entire profit being ploughed back in the business.

Subsidiaries

As on March 31, 2019 the Company has three subsidiaries and one step down subsidiary. As required under the provisions of Section 129 of the Companies Act, 2013, read with Companies (Accounts) Rule, 2013, a statement containing salient features of the financial statements of subsidiaries is provided in the prescribed format AOC-1 as Annexure-A of the Board Report.

The Company has one 100% subsidiary in Australia, Joyce Foam Pty. Ltd (Joyce Foam). Joyce Foam is the largest producer of Foam in Australia and supplies its high-quality Foam to Global Mattresses and Furnishing Companies. Joyce recorded a turnover of 66.70 Million Australian Dollars (AUD) in 2018-19, as compared with 63.28 Million AUD in 2017-18, recording a growth of more than 5.40% and has posted pretax profit of 2.93 Million AUD in 2018-19, as against 2.28 Million AUD in 2017-18.

Joyce Foam Pty Ltd has one wholly own subsidiary Joyce W C NSW Pty Ltd.

Your Company has two other wholly owned subsidiaries as under:

1) Divya Software Solutions Private Limited

2) Sleepwell Enterprises Private Limited.

Material Subsidiaries

Consolidated Financial Statements

The financial statements including consolidated financial statements and the audited accounts of each of the subsidiary are available on the Companyâs website www.sheelafoam.com

Directorsâ Responsibility Statement

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed.

d) The directors have prepared the annual accounts on a going concern basis.

e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

Corporate Governance

In accordance with SEBI Regulations, a separate report on Corporate Governance is given in Annexure-B along with the Auditorsâ Certificate on its compliance. The Auditorsâ Certificate does not contain any qualification, reservation and adverse remark.

Related Parties Transactions

The particulars of Contracts or arrangements with related parties, in the prescribed form, are attached as Annexure-C

Risk Management

The Company has formulated a Risk Management Policy duly reviewed by the Board of Directors. The policy includes risk identification, analysis and prioritization of risk and development of risk mitigation plans. During the year Company has constituted a Risk Management Committee.

Internal Financial Controls

The Company has in place adequate Internal Financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The report on the Internal Financial Control issued by M/s. S. P. Chopra & Co., Chartered Accountants, Statutory Auditors of the Company in view of the provisions under the Companies Act, 2013 is given elsewhere in this report.

Directors And Key Managerial Personnel (KMP)

As per the provisions of the Companies Act, 2013, Mr. Tushaar Gautam will retire by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, seek re-appointment. The Board has recommends his reappointment.

The Board also recommends the appointment of Ms. Meena Jagtiani as an Independent Director, who was appointed as Additional Director by the Board of Directors and whose term shall be expiring at the ensuing Annual General Meeting:

As required under the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel namely, Chairman and Managing Director, Executive Directors, and Company Secretary continue to hold that office as on the date of this report. Chief Financial Officer Mr. Dhruv Chandra Mathur ceased from his office from 30th November 2018 due to superannuation. Mr. Pankaj Garg appointed as Chief Financial Officer of the company w.e.f. 1st December 2018.

Auditors

M/s. S.P. Chopra & Co., Chartered Accountants, were reappointed for 5 years in the Annual General Meeting held on 2016, subject to ratification at every AGM. The Company has received letter, from the Auditors, to the effect that the ratification, if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013 and that they are not disqualified for re-appointment.

The Board recommends the ratification of the appointment M/s. S.P. Chopra & Co as Statutory Auditors for FY 2019-20 for the audit of the Company.

Auditorsâ Report

Cost Auditor

As per section 148 read with Companies (Audit and Auditors) Rule, 2014 M/s Mahesh Singh & Co, Cost Accountants are appointed, to conduct the cost records of the Company for the Financial Year 201920, by the Board of Directors and it seeks ratification of remuneration from the members of company at ensuing Annual General Meeting.

Internal Auditor

The company has engaged M/s S. S. Kothari Mehta & Co., Chartered Accountants as Internal Auditor to conduct internal audit for the year 2019-20. The Internal Auditor will report to Board of Directors. The internal audit will help company to review the operational efficiency and assessing the internal controls. It also reviews the safeguarding of assets of the Company.

Secretarial Auditor

The company has engaged M/s AVA Associates, Company Secretaries as Secretarial Auditor to conduct Secretarial audit for the year 2018-19. The report on secretarial audit is annexed as Annexure-D to the Boardâs Report. The report does not contain any qualification, reservation or adverse remark.

Corporate Social Responsibility (CSR)

In terms of Companies Act, 2013, your company is to undertake Corporate Social Responsibility programme. The disclosure as per Rule 9 of the Companies (Corporate Social Responsibility Policy) Rule, 2014 is attached as Annexure-E

Audit Committee

The composition of Audit Committee is provided in the Corporate Governance Report that forms part of this Annual Report.

Vigil Mechanism

Disclosure Under The Sexual Harassment Of Women At Work Place (Prevention, Prohibition And Redressal) Act 2013

The Company has in place an Anti-Sexual Harassment policy in line with the requirements of sexual harassment of women at Work place (Prevention, Prohibition and Redressal) Act 2013. The Internal system has been set up to redress complaints received regarding sexual harassment. During the period under review, no complaint was received by the Company.

Meetings Of The Board

During the year, 5 meetings of the Board of Directors were held.

Particulars Of Loans, Guarantees Or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 forms part of the Financial Statements.

Conservation Of Energy, Technology Absorption And Foreign Exchange Earning And Outgo

A. Following measures were taken by company for energy conservation in the year:

1) Installed the light dependent switch or LUX switch, which works on natural lighting to eliminate the wastage of electricity as many times lights remain in on state in day time.

2) Installed transparent roof sheets to make use of Natural Lighting.

3) Used thermal insulation for chillers and it results into increased efficiency of chiller operation around 5 to 7 Degree Celsius.

4) Replacement of conventional MH and street lights with energy efficient LED lights.

5) Used pressure switch in water pipe line to control the water pump automatically saves wastage of water and power.

6) Used thermography instrument in preventive maintenance of machine.

7) Used PPR-C pipe line for zero leakages in compressed air line saves electricity.

B. The expenses incurred on Research and Development have been included in respective expense heads.

C. The Company has introduced new process to reduce the consumption of energy and upgraded technology whenever required to replace the machinery.

D. The earnings from exports were Rs. 23.49 crores (Previous Year Rs. 20.43) and payments in foreign exchange were Rs. 271.85 crores (Previous Year Rs.274.86 crores).

Listing Agreements

Your Company has entered into agreements with Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE), in compliance with Regulation 109 of the Listing Regulations.

Particulars Of Employees

The information 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 provided in Annexure-F to the Boardâs Report.

Managementâs Discussion And Analysis

In terms of provisions of Regulation 34 of the Listing Regulations, the Managementâs discussion and analysis is set out in this Annual Report.

Public 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.

Extract Of Annual Return

Extract of Annual Return as provided under Sub Section 3 of Section 92 is annexed as Annexure-G.

Significant And Material Orders

There are no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Companyâs operations in future.

Board Evaluation Mechanism

The performance of individual directors was evaluated on parameters, such as, number of meetings attended, contribution in the growth and formulating the strategy of the Company, independence of judgement, safeguarding the interest of the Company and minority shareholders, time devoted apart from attending the meetings of the Company, active participation in long term strategic planning, ability to contribute by introducing best practices to address business challenges and risk etc. The directors expressed their satisfaction with the evaluation process.

Business Responsibility Report

Business Responsibility Report is annexed as Annexure-H.

Dividend Distribution Policy

The company has adopted Dividend Distribution Policy and there is no change in policy during the year. As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the policy is hosted at our web site at www.sheelafoam.com and is also attached as Annexure-I.

Acknowledgement

Your Directors wish to express and place on record their thanks to the Companyâs Distributors, Dealers and Business Associates for their excellent effort and the customers for their continued patronage of the Companyâs products. Your Directors also wish to place on record their appreciation for the devoted services of the Executive, Staff and workers of the Company at all levels enabling the Company to achieve the excellent performance during the year.

Your Directors also appreciate the valuable cooperation and continued support received from Companyâs bankers and all the government agencies and departments.

The Directors also express their sincere thanks to all the Shareholders for the continued support and trust they have reposed in the Management.

By Order and on behalf of the

Board of Sheela Foam Limited

Place: Noida (Rahul Gautam)

Date : 4th May, 2019 Chairman and Managing Director

Mar 31, 2018

Dear Members,

The Directors have pleasure in presenting the 46^th Annual Report on the business, operations and financial performance of the Company along with the Consolidated Audited Balance Sheet and Statement of Profit & Loss for the year ended 31 March, 2018.

Financial Information

(Rs. in Crores)

	Consolidated		Standalone
Particulars	2017-18	2016-17	2017-18	2016-17
Revenue from operations	2,004.45	1,894.50	1,695.66	1,590.36
Profit before Financial Charges, Depreciation & Tax	237.40	219.24	216.03	188.26
Less : Financial Charges	8.67	10.97	5.75	7.40
Cash Profit	228.73	208.28	210.28	180.86
Less : Depreciation	35.24	30.39	27.78	23.58
Profit before Tax	193.49	177.89	182.50	157.28
Add/(Less) : Income Tax	(58.93)	(52.79)	(55.93)	(46.87)
Add/(Less) : Deferred Tax	(0.85)	0.46	(0.63)	0.79
Profit after Tax	133.71	125.55	125.93	111.20
Other Comprehensive Income	(0.57)	(0.46)	(0.88)	(0.59)
Total Comprehensive Income for the year	133.14	125.09	125.05	110.61

During the current year Excise duty till 30 June, 2017 is included in Revenue, whereas in previous year the Excise duty for full year is included in the Revenue. Further after implementation of GST the Revenue excludes GST but includes outward freight. For proper Comparison of Growth & Profitability Ratios, the comparable Revenue figures are given hereunder:

Particulars	Consolidated		Standalone
Revenue from operations	2,004.45	1,894.50	1,695.66	1,590.36
Less: Excise Duty	39.13	161.65	39.13	161.65
Add: Freight	10.29	43.16	10.29	43.16
Net Revenue from operations	1,975.61	1776.01	1,666.82	1,471.87

During the current year, Net Revenue of the Company, on standalone basis, increased from Rs.1,471.87 Crores to Rs.1,666.82 Crores registering a growth of 13.24% over last year. The Profit After Tax for the current year also increased by 13.24% to Rs.125.93 Crores as against the Profit After Tax of Rs.111.20 Crores of last year.

First-time adoption of Ind AS

The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from 1 April, 2017, with a transition date of 1 April, 2016. These financial statements for the year ended 31 March 2018 are the first financial statements the Company has prepared under Ind AS. For all periods up to and including the year ended 31 March, 2017, the Company prepared its financial statements in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (âPrevious GAAPâ).

The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements be applied retrospectively and consistently for all financial years presented. Accordingly, the Company has prepared financial statements which comply with Ind AS for year ended 31 March, 2018, together with the comparative information as at and for the year ended 31 March, 2017and the opening Ind AS Balance Sheet as at 1 April, 2016, the date of transition to Ind AS.

Present Status & Future Outlook

Your Company retains the leadership position in Mattresses and Foam Products. Its share in the organised Mattress Market is more than 23%. The Foam production continues to be more than double of its nearest competitor.

The Company registered a growth of more than 13% in turnover and in profits despite GST hurdles and continued increase in the price of major raw material (TDI).

As large part of Mattress industry is unorganised and around 70% of the population still does not use modern mattresses, the growth potential for your company is immense. The share of organised market, as well as of your Company is expected to increase with the full implementation of GST. Various other factors like awareness about good sleep for health, increase in disposable income, ever increasing demand for housing due to nuclear families and rapid Urbanisation, will propel the demand of modern mattresses.

Similarly the potential for Foam Consumption continues to remain high. India has one of the lowest per capita foam consumption and with the development of Economy, the demand of Foam is bound to increase. Company expects to increase its Market Share on the strength of 45 years of expertise and continuous Research & Development leading to sustained good quality.

Dividend

Board of Directors do not recommended any dividend for the year FY 2016-17. The entire profit being ploughed back in the business.

Subsidiaries

As on 31 March, 2018 the Company has three subsidiaries and one step down subsidiary. As required under the provisions of Section 129 of the Companies Act, 2013, read with Companies (Accounts) Rule, 2013, a statement containing salient features of the financial statements of subsidiaries is provided in the prescribed format AOC-1 as Annexure-A of the Board Report.

The Company has one 100% subsidiary in Australia, Joyce Foam Pty. Ltd (Joyce Foam). Joyce Foam is the largest producer of Foam in Australia and supplies its high quality Foam to Global Mattresses and Furnishing Companies. Joyce recorded a turnover of 63.28 Million Australian Dollars (AUD) in FY 2017-18, as compared with 61.76 Million AUD in FY 2016-17, recording a growth of more than 2% and has posted pretax profit of 2.28 Million AUD in 2017-18, as against 4.27 Million AUD in FY 2016-17. Joyce Foam passed on around 50% increase in TDI prices to its customers and retained its customer base, sacrificing some margins. Joyce Foam deploys most modern technology - Variable Pressure Foaming (VPF), for producing best quality of Foam. Since full scale introduction of VPF technology, the revenues and profitability of company have improved.

Joyce Foam Pty. Ltd has one wholly own subsidiary Joyce W C NSW Pty Ltd.

Your Company has two other wholly owned subsidiaries as under:

1) Divya Software Solutions Private Limited

2) Sleepwell Enterprises Private Limited.

Material Subsidiaries

Consolidated Financial Statements

The financial statements including consolidated financial statements and the audited accounts of each of the subsidiary are available on the Companyâs website www.sheelafoam.com

Directorsâ Responsibility Statement

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed.

d) The directors have prepared the annual accounts on a going concern basis.

e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

Corporate Governance

Related Parties Transactions

The particulars of Contracts or arrangements with related parties, in the prescribed form, are attached as Annexure-C.

Risk Management

Internal Financial Controls

The Company has in place adequate Internal Financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The report on the Internal Financial Control issued by M/s. S.P. Chopra & Co., Chartered Accountants, Statutory Auditors of the Company in view of the provisions under the Companies Act, 2013 is given elsewhere in this report.

Directors and Key Managerial Personnel (KMP)

As per the provisions of the Companies Act, 2013, Mr. Rakesh Chahar will retire by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, seek re-appointment. The Board has recommends his re-appointment.

The Board also recommends the appointment of Lt. Gen(Dr.) V. K. Ahluwalia as an Independent Director, who was appointed as Additional Director by the Board of Directors and whose term shall be expiring at the ensuing Annual General Meeting:

As required under the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel namely, Chairman and Managing Director, Executive Directors, Chief Financial Officer and Company Secretary continue to hold that office as on the date of this report.

Auditors

The Board recommends the ratification of the appointment M/s. S.P. Chopra & Co., as Statutory Auditors for FY 2018-19 for the audit of the Company.

Auditorsâ Report

Cost Auditor

As per section 148 read with Companies (Audit and Auditors) Rule, 2014 M/s Mahesh Singh & Co, Cost Accountants are appointed, to conduct the cost records of the Company for the FY 2018-19, by the Board of Directors and it seeks ratification of remuneration from the members of company at ensuing Annual General Meeting.

Internal Auditor

The company has engaged M/s S. S. Kothari Mehta & Co., Chartered Accountants as Internal Auditor to conduct internal audit for the year 2018-19. The Internal Auditor will report to Board of Directors. The internal audit will help company to review the operational efficiency and assessing the internal controls. It also reviews the safeguarding of assets of the Company.

Secretarial Auditor

The company has engaged M/s AVA Associates, Company Secretaries as Secretarial Auditor to conduct Secretarial audit for the year 2017-18. The report on secretarial audit is annexed as Annexure-D to the Boardâs Report. The report does not contain any qualification, reservation or adverse remark.

Corporate Social Responsibility (CSR)

Audit Committee

The composition of Audit Committee is provided in the Corporate Governance Report that forms part of this Annual Report.

Vigil Mechanism

The Company has established a vigil mechanism through a Whistle Blower Policy. Tthe Company can oversees the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who may express their concerns pursuant to this policy. The policy is uploaded on the website of the Company at http://www.sheelafoam.com.

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 sexual harassment of women at Work place (Prevention, Prohibition and Redressal), Act 2013. The Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. During the period under review, no complaint was received by the ICC.

Meetings of the Board

During the year, 5 meetings of the Board of Directors were held.

Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 forms part of the Financial Statements.

Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo

A. Following measures were taken by company for energy conservation in the year:

1) Completed replacement of conventional lights with Energy efficient LED lights.

2) Sky light is now being used in Production shed in Rajpura Plant.

3) Significant saving of energy due to much less pumping of water as the water is now reused in Fire Hydrants.

4) Second Looper machine at Talwara modified to dispense the peeled rolls without stopping it, hence reduction in energy lost during start/ stop of machine.

5) Other measures introduced to save the energy viz. increase in standard AC Temperature to 25.5 degree, Auto switch on/switch off the lights through sensors, installation of sensor monitored curtains to use natural light etc.

B. The expenses incurred on Research and Development have been included in respective expense heads.

C. The Company has perfected the technology of producing foam and is continuously innovating new products/techniques to improve the quality of its product. It had also started compression of some grades of foam resulting in savings on freight. Further it has commissioned Vertivac Variable Pressure Foaming Machine for better grade foam at reduced cost. It has also started Comfort Cell Mattresses, to provide extra comfort to its consumers.

D. The earnings from exports were Rs.20.43 Crores (Previous Year Rs.20.28 Crores) and payments in foreign exchange were Rs.274.86 Crores (Previous Year - Rs.304.76 Crores).

Listing Agreements

Your Company has entered into Agreements with BSE Limited and NSE Limited, in compliance with Regulation 109 of the Listing Regulations.

Particulars of Employees

The information 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 provided in Annexure-F to the Boardâs Report.

Managementâs Discussion and Analysis

In terms of provisions of Regulation 34 of the Listing Regulations, the Managementâs discussion and analysis is set out in this Annual Report.

Public 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.

Extract of Annual Return

Extract of Annual Return as provided under Sub Section 3 of Section 92 is annexed as Annexure-G.

Significant and Material Orders

There are no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Companyâs operations in future.

Board Evaluation Mechanism

The performance of individual directors was evaluated on parameters, such as, number of meetings attended, contribution in the growth and formulating the strategy of the Company, independence of judgement, safeguarding the interest of the Company and minority shareholders, time devoted apart from attending the meetings of the Company, active participation in long term strategic planning, ability to contribute by introducing best practices to address business challenges and risk etc. The directors expressed their satisfaction with the evaluation process.

Business Responsibility Report

Business Responsibility Report is annexed as Annexure-H.

Acknowledgement

Your Directors wish to express and place on record their thanks to the Companyâs Distributors, Dealers and Business Associates for their excellent effort and the customers for their continued patronage of the Companyâs products. Your Directors also wish to place on record their appreciation for the devoted services of the Executive, Staff and Workers of the Company at all levels enabling the Company to achieve the excellent performance during the year.

Your Directors also appreciate the valuable co-operation and continued support received from Companyâs bankers and all the government agencies and departments.

The Directors also express their sincere thanks to all the Shareholders for the continued support and trust they have reposed in the Management.

By Order and on behalf of the Board

of Sheela Foam Limited

Place: Noida (Rahul Gautam)

Date : 18 May, 2018 Chairman and Managing Director

Mar 31, 2017

Dear Members,

The Directors have pleasure in presenting the 45^th Annual Report on the business, operations and financial performance of the Company along with the Consolidated Audited Balance Sheet and Statement of Profit & Loss for the year ended 31 March, 2017.

FINANCIAL INFORMATION

(Rs. in Crores)

Particulars	Consolidated		Standalone
	2016-17	2015-16	2016-17	2015-16
Total Revenue-Net	1,750.00	1,550.00	1,445.86	1,265.05
Profit before Financial Charges, Depreciation & Tax	217.12	192.85	186.14	161.80
Less : Financial Charges	9.87	11.67	6.31	6.77
Cash Profit	207.25	181.18	179.84	155.03
Less : Depreciation	30.39	29.27	23.58	22.77
Profit before Tax	176.86	151.91	156.25	132.26
Add/(Less) : Income Tax-current year	(52.48)	(47.45)	(46.56)	(41.15)
Add/(Less): Deferred Tax - current year	0.46	0.25	0.79	(0.96)
Profit after Tax	124.84	104.71	110.48	90.15
Balance Surplus carried to Balance Sheet	124.84	104.71	110.48	90.15

During the current year, Net Revenue of the Company on standalone basis ,increased fromRs.1,265 Crores toRs.1,446 Crores registering a growth of 14.3% over last year. The Profit after tax for the current year increased by 22.6% toRs.110 Crores as against the profit after tax ofRs.90 Crores of last year.

PRESENT STATUS & FUTURE OUTLOOK

Your Company is the largest manufacturer of Mattresses and has a market shares of 23% of total organized market. It is also the largest Foam manufacturing Company of the Country, producing more than two times of its nearest competitor. The market share of the Company is increasing every year.

The Company registered a growth of more than 14% in turnover and more than 22% in profits despite demonetization and unusual spurt in major raw material(TDI) prices.

70% of the Indian Mattress market is unaddressable, as the usage in this segment is of Cotton, Rugs etc. as sleeping surface. Of the balance 30% the organized market is 10% and unorganized market is 20%. The

Mattress Market is growing by around 10%. With the introduction of GST, increase in disposable income, increasing awareness about quality sleep and rapid improvement in infrastructure, the share of organized market is expected to increase at a faster rate.

The Per Capita Foam Consumption in India is less than 150 grams, whereas in Australia, where the subsidiary of the company has the largest market share, the per capita Foam Consumption is more than 6 times. This provides great opportunity to the company to increase its Foam production, as the consumption rate improves.

The Company is also expanding its distributor and dealer network to increase the penetration. The focus is on increasing Exclusive Brand Outlets (EBO) as well as Multi Brand Outlets (MBO) in new territories.

DIVIDEND

Board of Directors do not recommend any dividend for the year 2016-17. The entire profits are being ploughed back in the business.

SUBSIDIARIES

As on 31 March, 2017 the Company has three subsidiaries and one step down subsidiary. As required under the provisions of Section 129 of the Companies Act, 2013, read with Companies (Accounts) Rule, 2013, a statement containing salient features of the financial statements of subsidiaries is provided in the prescribed format AOC-1 as Annexure-A of the Board Report.

The Company has one 100% subsidiary in Australia, Joyce Foam Pty. Limited Joyce Foam is the largest producer of Foam in Australia and supplies its high quality Foam to Global Mattresses and Furnishing Companies. Joyce recorded a turnover of 61.76 Million Australian Dollars (AUD) in 2016-17, as compared with 58.60 Million AUD in 2015-16, recording a growth of more than 5% and has posted healthy pretax profit of 4.3 Million AUD in 2016-17, as against 3.8 Million AUD in 2015-16, an increase of around 13%. Joyce Foam deploys most modern technology -Variable Pressure Foaming (VPF), for producing best quality of Foam. Since full scale introduction of VPF technology, the revenues and profitability of company have improved.

Joyce Foam Pty Ltd has one wholly own subsidiary Joyce W C NSW Pty Limited

The Company has two other wholly owned subsidiaries as under:

1) Divya Software Solutions Private Limited since 2014-15 and

2) Sleepwell Enterprises Private Limited since this year.

MATERIAL SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Section 136 of the Companies Act, 2013 and the Accounting Standard 21 on the Consolidated Financial Statements, your Directors have attached the consolidated financial statements of the Company which form a part of the Annual Report.

The financial statements including consolidated financial statements and the audited accounts of each of the subsidiary are available on the Company''s website www.sheelafoam.com

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed.

b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review.

d) The directors have prepared the annual accounts on a going concern basis.

e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

CORPORATE GOVERNANCE

In accordance with SEBI Regulations, a separate report on Corporate Governance is given in Annexure-B along with the Auditors'' Certificate on its compliance in Annexure-B to the Board''s Report. The Auditors'' Certificate does not contain any qualification, reservation and adverse remark.

RELATED PARTIES TRANSACTIONS

The particulars of Contracts or arrangements with related parties, in the prescribed form, are annexed as Annexure-C

RISK MANAGEMENT

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate Internal Financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The report on the Internal Financial Control issued by M/s. S.P. Chopra & Co., Chartered Accountants, Statutory Auditors of the Company in view of the provisions under the Companies Act, 2013 is given elsewhere in this report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

During the year, Mrs. Sheela Gautam, Director (Chairperson) resigned from the directorship.

As per the provisions of the Companies Act, 2013, Ms. Namita Gautam will retire by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, seek re-appointment. The Board has recommended her reappointment.

The Board has, subject to the approval of the Shareholders, re-appointed Mr. Rahul Gautam, Managing Director, Ms. Namita Gautam, Mr. Rakesh Chahar, Mr. Tushaar Gautam, Whole-time Directors of the Company for a period of 5 years effective from April 1, 2017.

The Board also recommended the appointment of following independent Directors who were appointed as Additional Director by the Board of Directors and whose term shall be expire at the ensuing Annual General Meeting:

1) Mr. Vijay Kumar Chopra

2) Mr. Som Mittal

3) Mr. Ravindra Dhariwal

4) Mr. Anil Tandon

As required under the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel namely, Chairman and Managing Director, Executive Director, Chief Financial Officer and Company Secretary continue to hold that office as on the date of this report.

AUDITORS

The Board recommends the ratification of the appointment M/s. S.P. Chopra & Co as Statutory Auditors for Financial Year 2017-18 for the audit of the Company.

AUDITORS'' REPORT

COST AUDITOR

As per section 148 read with Companies (Audit and Auditors) Rule, 2014 M/s Mahesh Singh & Co, Cost Accountants are appointed, to conduct the cost records of the Company for the Financial Year 2017-18, by the Board of Directors and seeking ratification of remuneration from the members of company at ensuing Annual General Meeting.

INTERNAL AUDITOR

The company has engaged M/s S. S. Kothari Mehta & Co., Chartered Accountants as Internal Auditor to conduct internal audit for the year 2017-18. The Internal Auditor will report to Board of Directors. The internal audit will help company to review the operational efficiency and assessing the internal controls. It also reviews the safeguarding of assets of the Company.

SECRETARIAL AUDITOR

The company has engaged M/s AVA Associates, Company Secretaries as Secretarial Auditor to conduct Secretarial audit for the year 2016-17. The report on secretarial audit is annexed as Annexure D to the Board''s Report. The report does not contain any qualification, reservation or adverse remark.

CORPORATE SOCIAL RESPONSIBILITY(CSR)

AUDIT COMMITTEE

The composition of Audit Committee is provided in the Corporate Governance Report that forms part of this Annual Report.

VIGIL MECHANISM

The Company has established a vigil mechanism through a Whistle Blower policy and the Audit Committee oversees the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who may express their concerns pursuant to this policy. The policy is uploaded on the website of the Company at http://www.sheelafoam.com.

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 sexual harassment of women at Work place (Prevention, Prohibition and Redressal) Act 2013. The Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. During the period under review, no complaint was received by the ICC.

MEETINGS OF THE BOARD

During the year, 9 meetings of the Board of Directors were held.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 forms part of the Financial Statements.

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

A. Following measures were taken by company for energy conservation in the year:

1) Used LED light in all new areas covered in Greater Noida for VertiVac Machine and in Hyderabad for New Foaming Machine. Further started systematic replacement of conventional light fixtures with energy efficient LED lights in all existing plants.

2) Introduced sky light which provides natural cool light inside the building.

3) Application of heat resistive paint on roof sheeting, which help reducing the inside temperature, hence reduction in cooling requirement.

4) I n steam boiler at Saily plant, Optimized the steam pressure and reduced it by 1.5 bar which helped reducing the diesel consumption by approximately 20%.

5) One Looper machine at Talwara modified to dispense the peeled rolls without stopping it, hence reduction in energy lost during start/ stop of machine.

B. The expenses incurred on Research and Development have been included in respective expense heads.

D. The details of earnings from exports and payments in foreign exchange are given in the Notes to the Accounts of the Company.

LISTING AGREEMENTS

Your Company has entered into Listing Agreements with BSE Limited and National Stock Exchange of India Limited, in compliance with Regulation 109 of the Listing Regulations.

PARTICULARS OF EMPLOYEES

The particulars of employees drawing remuneration in excess of limits set out in the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure-G to the Board''s Report. However, as per the provisions of Section 136 of the Companies Act 2013, the Annual Report is being sent to all the members of the Company excluding the aforesaid information. The said information is available for inspection by the members at the registered office of the Company up to the date of the ensuing Annual General Meeting. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

MANAGEMENT''S DISCUSSION AND ANALYSIS

In terms of provisions of Regulation 34 of the Listing Regulations, the Management''s discussion and analysis is set out in this Annual Report.

PUBLIC 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.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return as provided under Sub Section 3 of Section 92 is annexed as Annexure-H.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

BOARD EVALUATION MECHANISM

The performance of individual directors was evaluated on parameters, such as, number of meetings attended, contribution in the growth and formulating the strategy of the Company, independence of judgment, safeguarding the interest of the Company and minority shareholders, time devoted apart from attending the meetings of the Company, active participation in long term strategic planning, ability to contribute by introducing best practices to address business challenges and risk etc. The directors expressed their satisfaction with the evaluation process.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The policy is unloaded on company site www.sheelafoam.com.

BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report is annexed as Annexure-I.

ACKNOWLEDGEMENT

Your Directors wish to express and place on record their thanks to the Company''s Distributors, Dealers and Business Associates for their excellent effort and the customers for their continued patronage of the Company''s products. Your Directors also wish to place on record their appreciation for the devoted services of the Executive, Staff and workers of the Company at all levels enabling the Company to achieve the excellent performance during the year.

Your Directors also appreciate the valuable co-operation and continued support received from Company''s bankers and all the government agencies and departments.

The Directors also express their sincere thanks to all the Shareholders for the continued support and trust they have reposed in the Management.

By Order and on behalf of the Board

of Sheela Foam Limited

Place: Delhi (Rahul Gautam)

Dated: 10 May, 2017 Chairman and Managing Director

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