Aarvee Denim and Exports

The Directors have pleasure in presenting the 19th Annual Report along
 with the Audited Statement of Accounts for the year ended March 31,
 2008.
 
 FINANCIAL RESULTS
 
 The highlights of the Financial Results are given below:
 
                                              ( Rs.in Lacs)
                                              Year ended    Year ended
                                              31.03.2008    31.03.2007
 
 Total Revenues 
 (including non recurring income)               25209.41     25212.73
 
 Profit Before Depreciation, interest 
 and taxation                                    3890.90      5721.60
 
 Less: Interest                                  1221.02       529.54
 
 Profit after interest but before 
 Depreciation and Taxation                       2669.88      5192.06
 
 Less : Depreciation                             2085.07      1624.65
 
 Add: exceptional income on sale of land               0       142.78
 
 Add: Prior Period Adjustments                     31.76        -0.70
 
 Profit After Depreciation                        616.57      3709.49
 
 Less : Provision For Taxation                     81.45       462.88
 
 Less : Provision For Deferred Tax                     0       203.58
 
 Profit After Taxation                            535.12      3043.03 
 
 Appropriations / Adjustments
 
 Less: short provision for taxation for 
 earlier years                                      1.23        8.02
 
 PROFIT FOR THE YEAR                              533.89     3035.01
 
 Balance of profit / (loss) brought forward      8359.13     6193.57
 
 Preference Dividend                                   0      194.89
 
 Equity Dividend                                       0      229.74
 
 Corporate Dividend Tax (including 
 Edu. cess and surcharge)                              0       68.82
 
 Capital Redemption Reserve                       300.00      300.00
 
 General Reserves                                      0       76.00
 
 Profit carried to Balance Sheet                 8593.02     8359.13
 
 PERFORMANCE DURING THE YEAR:
 
 The year 2007-2008 was yet another challenging year for the Denim
 Industry. Turnover/ Income of the Company for the year remain same at
 Rs. 25209.41 Lacs compared to previous year at Rs. 25212.73 Lacs.
 Operating profit for the year is Rs. 3890.90 Lacs compared to 5721.60
 Lacs which shows decrease by 32% due to lower sales realization and
 increase in Raw material cost by 14%, Employment cost by 15% and
 Depreciation charge by 28%.
 
 Profit after tax for the year is 535.12 Lacs compared to Rs. 3043.03
 Lacs in previous year.
 
 DIVIDEND
 
 In order to inadequate profit and to conserve resources for on going
 future expansion and growth, your Directors do not recommend any
 dividend for the year.
 
 BUSINESS OVERVIEW:
 
 The year 2007-08 shows down turn as compared to 2006-07 in the denim
 market. The slowdown can be attributed to recessionary tendencies,
 excess capacity, and appreciation in Indian Rupees. Domestic sales
 slipped in volume as well as realization. However, exports turned up by
 43%. As part of continuing cost reduction strategy, the company has
 installed another 8 windmills making the total capacity from 8.5MW to
 20.5MW. This has resulted substantial savings of power and fuel cost.
 As the Denim sector is plunged into excess capacity, the Company has
 utilised some of the production capacity for non denim fabric and
 Garments. Moreover, as a de-risking strategy your company started
 producing and selling of value added products through Exclusive Brand
 Outlet (EBOs) with brand name DE EXTASE. As on 31st March 2008, eight
 EBOs have been commenced. And till the end of March 2009, company
 expects to open 100 EBOs.
 
 CORPORATE GOVERNANCE
 
 Pursuant to the requirements of Clause 49 of the Listing Agreement with
 the Stock Exchanges, a report on Corporate Governance and a Certificate
 from the Auditors of the Company regarding compliance with Corporate
 Governance guidelines as stipulated and Management Discussion &
 Analysis report have been attached by way of separate Section as part
 of this Annual Report.
 
 DIRECTORS
 
 Shri Rajesh P. Arora and Shri Sanjay Majmudar retire by rotation as per
 the provisions of Articles of Association of the Company. Your
 Directors recommend their reappointment.
 
 AUDITORS
 
 Auditors of the Company M/s. N.C. Shah & Associates, Chartered
 Accountants and M/s Deloitte Haskins & Sells, Chartered Accountants,
 will retire at the conclusion of the ensuing 19th Annual General
 Meeting from the office of the Auditors and being eligible offer
 themselves for re-appointment from the end of the ensuing Annual
 General Meeting till the conclusion of the next Annual General Meeting.
 
 The notes to the accounts referred to in the Auditors Report are
 Self-explanatory and therefore do not call for any further comments.
 The Company has adequate system of internal control procedures
 commensurate with the size of the Company and the nature of its
 business to keep check on the activities of the various departments.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to sub-section (2AA) of Section 217 of the Companies Act,
 1956, the Board of Directors of the Company hereby state and confirm
 that:
 
 (i) in the preparation of the Annual Accounts, the applicable
 accounting standards have been followed;
 
 (ii) 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 of
 the Company for that period.
 
 (iii) the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and or preventing and detecting fraud and other
 irregularities;
 
 (iv) the Directors had prepared the annual accounts on a going concern
 basis.
 
 DEPOSITS
 
 For the Financial year ending March 31, 2008 the company has accepted
 fixed deposits to the tune of Rs. 477.74 lacs.  The Company repaid the
 deposits amounting to Rs. 244.88 lacs and the outstanding deposits at
 the end of the year were amounting to Rs. 232.86 lacs.
 
 INSURANCE
 
 All properties and insurable interests of the company including
 building, plant and machinery and stocks wherever necessary and to the
 extent required have been adequately insured.
 
 PARTICULARS OF EMPLOYEES
 
 Particulars required by the provisions of Section 217 (2A) of the
 Companies Act, 1956 read with the Companies (particulars of Employees)
 Rules, 1975 as amended have not been provided since no employee is
 drawing remuneration in excess of prescribed limits as per above
 provisions.
 
 CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY BY
 ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 Details required to be disclosed under section 217 (1) (e) of the
 Companies Act, 1956 read with Companies ( Disclosure of particulars in
 the Report of the Board of Directors) Rules, 1988 are set out in
 Annexure of this Report.
 
 APPRECIATION
 
 Your Directors place on record their appreciation of the contribution
 made by employees at all levels. Your Companys growth was made
 possible by employees support, co-operation, commitment, solidarity
 and hard work.
 
 Your Directors wish to take this opportunity to express their deep
 sense of gratitude to the Central and State Governments, banks,
 financial institutions, shareholders and customers for their
 co-operation and support and look forward to their continued support in
 future.
 
 
                            By order of the Board
 
 Place : Ahmedabad          Vinod P. Arora
 Date  : 30th June, 2008    Chairman