The Directors hereby present the 23rd Annual Report along with the
 audited statements of the Company for the year ended 31st March 2012.
 
 Overview
 
 Countries are increasingly eliminating their trade barriers and
 international trade now truly spans the globe. Products and services
 
 come from everywhere and go everywhere. This, as well as the
 liberalization of large financial flows, makes countries very dependent
 on what happens in the international economy. India has some leeway to
 get reforms back on track with its long-term growth prospects firm,
 according to the resources.
 
 India''s textile and apparel exports may have missed the -billion
 target in 2011-12 fiscal despite a weak rupee, as demand from biggest
 market Europe dwindled due to the sovereign debt crisis.
 
 The country''s apparel shipment inched up by just 1.5 per cent to 1.28
 billion in February, the third worst monthly performance this fiscal,
 as the crisis in Europe intensified. Apparel exports between April and
 February, however, rose 19 per cent in dollar terms to .14 billion
 due to an initial pick-up and a 16 per cent depreciation of the rupee
 against the dollar that made overseas dispatches more remunerative.
 Apparel exports account for nearly half of the total shipments by the
 textile and garments industry.
 
 The government expected the exports to rise in 2011-12 as demand seemed
 to have returned after the global financial turmoil in 2008, but the
 debt crisis in Europe erupted, jeopardizing shipment prospects.  EU and
 the US, the worst affected nations in the current debt crisis, together
 account for around 65% of India''s textile exports.
 
 The textile industry accounts for around 14 percent of industrial and
 more than 10 percent of the country''s total exports. It is the largest
 jobs generator after agriculture, employing around 35 million people
 across various segments.
 
 To prop up the cash-strapped textiles sector, the Industry has
 requested for the restructuring of loans as well as interest subsidy to
 the garments and knit-wear sectors grappling with the economic slowdown
 of their biggest export markets that forced a sudden plunge of product
 prices after two successive years of relentless rise in raw material
 costs.
 
 With the Reserve Bank of India rejecting the proposal, the fortune of
 the Exporters is again reserved.
 
 Financial Highlights -                                    Rs. In Crs
 
                                             FY 2011-12    FY 2010-11 
 
 Revenue From operations                         190.38        188.45
 
 Gross Profit / (Loss) before interest             9.85          3.31
 
 and depreciation
 
 Interest                                         16.36         14.06
 
 Profit / (Loss) before depreciation              (6.51)       (10.75)
 
 and tax
 
 Depreciation                                      7.16          8.76
 
 Profit / (Loss) before Extra-Ordinary           (13.67)       (19.51)
 
 Income
 
 Extra-Ordinary Income                              -             -
 
 Profit / (Loss) before tax                      (13.67)       (19.51)
 
 Provision for Taxation
 
 Profit / (Loss) after tax                       (13.67)       (19.51)
 
 Balance brought forward from                    (51.75)      (134.63)
 
 previous year
 
 Less: Accumulated losses                           -          102.39
 
 written off pursuant to Scheme of
 
 Arrangement
 
 Balance carried to Balance Sheet                (65.42)       (51.75)
 
 The Company''s revenues stood at Rs.190 crs as against Rs.188 crs
 previous year. The operational margins have improved drastically
 despite of marginal increase in revenues mainly on account of various
 strategic initiatives undertaken by your company including adding of
 new premium clients, reign of business mix both on geographical as well
 as on product lines, rationalization of capacities, tight cost control
 mechanisms and better deployment of resources.
 
 Finance and Accounts
 
 There is no provision for Income Tax, due to the loss incurred by the
 Company during the year. The Company has recognized Deferred Tax Asset
 in unabsorbed depreciation and accumulated losses to the extent of
 corresponding deferred tax liability on the difference between the book
 balance and written down value of fixed assets under Income Tax.
 
 The Company has not accepted any deposits within the meaning of Section
 58A and 58AA of the Companies Act 1956.
 
 The Company was in receipt of interest subsidy of Rs.2.52 crs under
 Technology Up gradation Fund (TUF) Scheme during the year and the same
 has been deducted from Interest on Term loan in the Financial
 Statements.
 
 The Company''s net worth was eroded as on 31st March 2010 under the
 provisions of Sick Industrial Companies Act (SICA). Accordingly the
 company filed for reference with the Board for Industrial and Financial
 Reconstruction (BIFR) under section 15(1) of SICA. The reference was
 considered by BIFR and upon submissions made and material on record,
 BIFR has declared the Company as Sick Industrial Company u/s 3(1)(o) of
 SICA vide its order dated 19th April 2011. BIFR issued directions to
 the lenders and to the Company to submit a Rehabilitation Scheme as per
 section 18 of SICA.
 
 The Term loan obligations and Interest Commitments have been met in
 full with respect to the State Bank of India in accordance with the
 Terms and Conditions of the Sanction letter. However the Company has
 defaulted in repayments of Term loans amounting to Rs.0.22 crs and
 Interest Commitments amounting to Rs.1.55 crs with respect to HDFC
 Bank''s Borrowings. The Term loan repayment is pending since February
 2012 while the interest commitment remains unpaid since January 2011.
 
 The Company submitted its Draft Rehabilitation Proposal (DRS) to the
 Operating Agency, State Bank of India and is awaiting the sanction of
 the Second Re-structuring Package.
 
 The Cut-off Date for the DRS is 31st March 2011 as per the Orders of
 BIFR and the Company has sought certain reliefs / concessions in Term
 loans / interest rates with the lenders.
 
 The Accounts of the Company have been prepared on the basis of ''going
 concern concept'' despite negative net worth as on 31st March 2012 in
 view of the various strategic initiatives that the Company is exploring
 and also considering the Rehabilitation Scheme submitted to Banks /
 BIFR. The Management is confident of being able to continue and operate
 the business and bring positive results in future.
 
 Share Capital
 
 There is no addition to the share capital during the year.
 
 Dividend
 
 In view of the business loss for the year, no dividend is being
 recommended.
 
 Personnel
 
 The Board wishes to place on record its appreciation to all the
 employees in the Company for their sustained efforts and contributions
 during these tough times.
 
 Directors
 
 Pursuant to Section 255 of the Companies Act 1956, Mr. N.K. Ranganath
 and Mrs. Nidhi Reddy retire by rotation at the ensuing Annual General
 Meeting and being eligible, offer themselves for reappointment.
 
 Auditors
 
 M/s Anil Nair & Associates, Chartered Accountants, Chennai and M/s
 CNGSN & Associates, Chartered Accountants, Chennai, the Joint Auditors
 of the Company, retire at the ensuing Annual General Meeting and are
 eligible for reappointment.
 
 Corporate Governance Report and Management Discussion and Analysis
 Statement
 
 A report on Corporate Governance is attached to this Report as also a
 Management Discussion and Analysis statement.
 
 Particulars as per Section 217 of the Companies Act, 1956
 
 A) Pursuant to the requirement of Section 217 (2AA) of the Companies
 
 Act, 1956 and based on the representations received, your Directors
 hereby confirm that:
 
 i.  In the preparation of the Annual Accounts for the year ended 31st
 March 2012, the applicable Accounting Standards have been followed and
 there are no material departures;
 
 ii.  The Directors have 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 or
 loss of the Company for that period;
 
 iii. The Directors have taken proper and sufficient care for
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities;
 
 iv.  The Directors have prepared the Annual Accounts on a going concern
 basis.
 
 B) During the year under review, there were no employees covered under
 the provisions of Section 217(2A) of the Companies Act, 1956 read with
 Companies (Particulars of Employees) Amendment Rules, 2011.
 
 C) The information pursuant to 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 is given below:
 
 i.  Conservation of Energy:
 
 The operations of the Company are not energy-intensive.  However,
 wherever possible, the Company strives to curtail the consumption of
 energy on a continuing basis.
 
 ii.  Technology absorption:
 
 Not applicable.
 
 iii. Foreign Exchange Earning and Outgo:
 
 Total Foreign exchange earned (FOB Value) Rs.181.35 crs Total Foreign
 exchange outgo Rs. 66.44 crs
 
 Appreciation
 
 The Directors are sincerely thankful to you - the esteemed
 shareholders, customers, business partners, financial / investment
 institutions and commercial banks for the faith reposed and valuable
 support provided by them in the Company and its Management. The
 Directors wish to place on record the co-operation extended and the
 solidarity shown by the employees in assisting the organization to
 control its losses and contributing for a good turnaround. The
 Directors thank the Banks, particularly State Bank of India for all
 their sustained support throughout the journey of the Company.
 
                                      For and on Behalf of the Board
 
                                                        V. Rajagopal
 
 Chennai, 15th May 2012                                     Chairman