DIRECTORS' REPORT

The Members,

SAGAR PRODUCTIONS LIMITED

1. Your Directors are pleased to present their 36th Annual Report together with the Balance Sheet and the Profit and Loss Accounts for the financial year ended 31st March, 2015 and the Auditors Report thereon.

2. STATE OF AFFAIRS:

During the year under review, the Company continued to make losses. As compared to the losses of Rs. 81.17 Lacs in previous year 2013-14, the Company has incurred loss of Rs. 6.14 Lacs.

Even though Company continued to make losses during the year, your Directors are optimistic about the coming year as the Hon'ble High Court of Bombay had vide its order dated 18.04.2015 approved the Scheme of Arrangement of the Company. As envisaged in the Scheme, the Company can now reduce its share capital by writing off its losses after which the Balance Sheet will show the clear state of affairs of the Company. Also Company will be getting fresh funds by way of preferential issue which shall be utilised for accelerating the business of the Company.

3. DIVIDEND

In view of the losses made during the year, the Board of Directors of your Company does not recommend any dividend for the year 2014-15.

4. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The provisions of Section 125(2) of the Companies Act, 2013, do not apply as there was no dividend declared and paid in last 7 years.

5. DIRECTORS

In accordance with the provisions of section 152[6] of the Act and in terms of Articles of Association of the Company, Mr. Deepak Mardhekar [DIN: 06985092] will retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment. The Board recommends his reappointment.

6. DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED OR RESIGNED

During the year under review, Mr. Deepak Mardhekar has been appointed on Board w.e.f. 28th August 2014.

Mrs. Hemlata Chanda was appointed as an Additional Director w.e.f. 26th March, 2015 and holds the said office till the date of the ensuing Annual General Meeting. A notice has been received from a member proposing her candidature for her reappointment being eligible and offering herself for appointment as an Independent (Non-Executive) Director for five consecutive years from the date of ensuing Annual General Meeting to be held on September 29, 2015 upto September 29, 2020 or upto the date of Annual General Meeting to be held in the calendar year 2020, whichever is earlier and shall not be liable to retire by rotation A notice has been received from a member proposing Mrs. Chanda as a candidate for the office of Independent Director of the Company. In the opinion of the Board, Mrs. Chanda fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder for her appointment as an Independent Director of the Company. The Board considers that her continued association would be of immense benefit to the Company.

7. DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

8. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place an established internal control system designed to ensure proper recording of financial and operational information, compliance of various internal controls and other regulatory and statutory compliances. Internal Audit is conducted throughout the organization by qualified independent Internal Auditors. Findings of the Internal Audit Report are reviewed by the

Management and by the Audit Committee of the Board and proper follow up actions are ensured wherever required.

9. CHANGE IN THE NATURE OF BUSINESS

During the period under review, there is no change in the nature of business of the Company. The Company continues to operate in the Media production & distribution.

10. SUBSIDIARIES, TOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

11. DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act, 2013, the Directors state that:

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

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

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

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

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

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

12. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of Annual Return in Form MGT-9 as required under Section 92 of the Companies Act, 2013 (herein after referred to as "the Act") forms an integral part of this Report as "Annexure A".

13. MEETINGS OF THE BOARD

During the year, Seven (7) Board Meetings were held by the Company on 29th May, 2014, 25th July, 2014, 14th August, 2014, 28th August, 2014, 29th September, 2014, 15th November, 2014 and 13th February, 2015.

The intervening gap between the meetings was as prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement entered with the BSE. The details of the Committee Meetings held during the period under review forms part of the Corporate Governance Report.

14. NOMINATION AND REMUNERATION COMMITTEE POLICY

The Board has on the recommendation of the Nomination & Remuneration committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

15. AUDIT COMMITTEE

The Audit Committee of the Board of Directors of the Company, comprises of three (3) Members, namely Mr. Ramavtar Kankani, Mr. Jitendra Keny and Mr. Kalakad Sathi. Two-third of the Members are Independent Directors and one is Executive Director. The Chairman of the Committee is Mr. Ramavtar Kankani who is an Independent Director. The details of terms of reference of Audit Committee, number and dates of meetings held and attendance of the Members therein have been specified separately in the attached Corporate Governance Report. The Board accepted the recommendations of the Audit Committee whenever made by the Committee during the year.

16. AUDITORS & AUDITORS REPORT

M/s. Sudhir M Desai & Co., the Auditors retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment. The Company has received the letter from Auditors to the effect that their appointment if made it would be within the prescribed limits under Section 139 of the Companies Act, 2013.

The Statutory Auditors M/s. Sudhir M Desai & Co., Chartered Accountants have issued their reports on Standalone Financial Statements for the year ended 31st March 2015. There are no adverse remarks or qualifications in the said report. The Notes on Accounts referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

Your Directors recommend reappointment of M/s. Sudhir M Desai & Co. as the Auditors of the Company.

17. INTERNAL AUDITOR

The Company has appointed M/s. RNA & Associates, Chartered Accountants, (Firm Registration No. 136734W) as Internal Auditor of the Company as per Section 138 of the Act.

18. SECRETARIAL AUDIT REPORT

In compliance with the provisions of Sec 204 and other applicable provisions of Companies Act 2013, a secretarial audit was conducted during the year by Secretarial Auditors M/s. Rituraj & Associates, Practicing Company Secretaries. The Secretarial Auditor's Report is attached as Annexure and forms part of this report. There is one qualification/observation/remark made by the Secretarial Auditor in their Audit Report stating the Company has not appointed Company Secretary as per under Section 203 for the Financial Year 2014-15. In this regard, your Directors want to clarify that the Company has seen losses since the whole decade which has wipe all the reserves of the Company. Due to the financial condition of the Company, we are unable to appoint a Company Secretary at such a remuneration which is at par with the market standards. However, your Directors further submits that the Company will soon appoint a Company Secretary as soon as we find suitable financial condition. In absence of a Company Secretary, we have still managed to comply with the provisions of applicable laws and continue to do so. The Secretarial Audit Report forms part of this Notice as "Annexure B".

19. BOARD PROCEDURE

Board members are given appropriate documents and information in advance of each Board and Committee Meeting to enable the Board to discharge its responsibilities effectively by taking well informed decisions. To enable the Board to discharge its responsibilities effectively, the Managing Director reviews Company's overall performance. The functions performed by the Board includes, in addition to the legal matters compulsorily required to be performed by it, review of:

- Strategy and Business Plan;

- Annual operating and capital expenditure budgets;

- Investment and exposure limits;

- Compliance with statutory/regulatory requirements and review of major legal issues;

- Approval of quarterly/annual results and

- Review of the minutes of the Board Meeting, Audit Committee Meeting, Stakeholders Relationship Committee and Nomination & Remuneration Committee.

20. RISK MANAGEMENT

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business riskframework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business divisions. Risk management forms an integral part of the Company's planning cycle.

21. FIXED DEPOSITS

The Company has not accepted any deposit from the general public within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under.

22. RELATED PARTY TRANSACTIONS

All contracts/arrangements/transactions entered by the Company during the year ended 31st March 2015 with related parties were in the ordinary course of business and on an arm's length basis. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of Company at large. Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm's length basis, Form AOC-2 is not applicable to the Company.

The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: <http://www.sagarproductions.com/>images/pdf/Policy%20on%20Related%20Party%20Transaction s.pdf. The Disclosures on related party transactions are set out in Notes to the Financial Statement.

23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY UNDER SECTION 186

Details of Loan, Guarantees and Investments covered under the provisions of the Act, are disclosed in the notes to the Financial Statements.

24. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

During the year ended 31st March 2015, there were no material changes and commitment affecting the financial position of the Company that have occurred between the year ended 31st March 2015 to which financial results relate and the date of the Report.

25. PERFORMANCE EVALUATION OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and other Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

26. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Since the provisions as laid down in the Section 135 of the Companies Act, 2013 are not applicable to the Company; hence no such Committee has been formed. However, Company had always tried in its best possible ways to involve itself in social development activities.

27. SHARES

a. Buy Back of Securities

The Company has not bought back any of its securities during the year under review.

b. Sweat Equity

The Company has not issued any Sweat Equity Shares during the year under review.

c. Bonus Shares

No Bonus Shares were issued during the year under review.

d. Employees Stock Option Plan

The Company has not provided any Stock Option Scheme to the employees.

28. SHARE CAPITAL

The Issued Capital of the Company as on 31st March 2015 stands at Rs. 54,003,000/- divided into 54,003,000 Equity Shares of Re. 1/- each.

The Subscribed & Paid up Capital of the Company as on 31st March 2015 stands at Rs. 53,685,000/- divided into 53,685,000 Equity Shares of Re. 1/- each. During the year, the Company has not issued shares with differential voting rights nor granted any stocks options or sweat equity.

29. DEMATERIALISATION OF SHARES

Your Company has connectivity with the National Securities Depository Limited (NSDL) & Central Depository Services (India) Limited (CDSL) for dematerialization of its Equity Shares. The ISIN No.INE807D01022 has been allotted for the Company Shares. Therefore, the members and/or investors may keep their shareholdings in the electronic mode with their Depository Participant.

30. LISTING OF SHARES

Equity Shares of the Company are listed with the Bombay Stock Exchange Limited. Your Company had duly paid the Annual Listing Fees to the Stock Exchange.

31. INSURANCE

The fixed assets of the Company have been adequately insured.

32. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has formulated a vigil mechanism (whistle blower policy) for its directors and employees of the Company for reporting genuine concerns about unethical practices and suspected or actual fraud or violation of the code of conduct of the Company as prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement. This vigil mechanism shall provide a channel to the employees and Directors to report to the management concerns about unethical behavior, and also provide for adequate safeguards against victimization of persons who use the mechanism and also make provision for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

33. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the year under review, there were no significant and material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations. However, as a matter of good Governance practice we would like to inform our shareholders that the Hon'ble High Court of Bombay vide its order dated 18th April, 2015 had granted its consent in the matter of Scheme of Arrangement between the Company and its Equity Shareholders. This information pertains prior the Boards' Report was finalised and hence been included so that the members are informed on the same.

34. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report is presented in a separate section forming part of this Annual Report.

35. CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement entered with the BSE, a separate Report on Corporate Governance practices followed by the Company, together with a Certificate from the Company's Auditors confirming compliance forms an integral part of this Report.

Further, as per Clause 49 of the Listing Agreement entered with the BSE, CEO/CFO Certification confirming the correctness of the financial statements, adequacy of the internal control measures and reporting of matters to the Audit Committee forms an integral part of this Report.

36. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Compliance Officer in this regard.

37. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

There was no technology absorption and no foreign exchange earnings or outgo, during the year under review. Hence, the information as required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is to be regarded as Nil. The Company has not entered into any technology transfer agreement.

38. ACKNOWLEDGEMENT

Your Directors take the opportunity to express their grateful appreciation for the excellent assistance and co-operation received from their Bankers, Customers etc. Your Directors also thank all the shareholders for their continued support and all the employees of the Company for their valuable services during the year.

Registered Office:

907, Dev Plaza, 9th Floor, Opp. Andheri Fire Station, Andheri (West), Mumbai - 400058

By Order of the Board of Directors

For Sagar Productions Limited

Sd/- Kalakad Sathi Chairman & Whole-Time Director

DIN: 00150876

Place: Mumbai

Date: 13.08.2015