Your Directors have pleasure in presenting the 12th Annual Report
 together with Audited Statements of Accounts of the Company for the
 year ended March 31, 2004.
 
 FINANCIAL RESULTS:
 
                                                     (Rs. in Lakhs)
                                             31/03/2004       31/03/2003
 
 Sales & Other Income                          13803.22          4677.26
 
 Total Expenditure                             13056.30          4140.10
 
 Profit before Depreciation & Tax                746.92           537.17
 
 Interest                                        172.51             7054
 
 Depreciation                                    177.77           170.62
 
 Profit before Tax                               396.64           296.01
 
 Profit after Tax                                305.49           272.69
 
 Operations
 
 Strong economic growth and continued focus on several measures,
 aggressive marketing efforts, cost cutting and quality process
 improvement have all helped the Company in achieving its best
 performance yet, with sales volume in both domestic and international
 markets and profits touching new peaks.
 
 Historic Event
 
 Your Company has acquired Cimmco Spinners a yarn manufacturing unit
 situated at Solapur, Maharashtra from Xpro India Limited (a S K Birla
 Group Concern) on 21-10-2003. Acquisition of Cimmco Spinners is a
 significant landmark in the history of the Company.
 
 Cimmco Spinners has a capacity of 26,208 Ring Spindles & 9 TFOs to
 produce 100% Cotton single and double, electronically cleared, high
 quality spliced, siro cleaned Yarns.
 
 Markets Yarn
 
 The Yarn prices continued to be subdued in the International markets,
 but prices in the domestic market were significantly better in the
 later part of the year. Quota restrictions on volume of textile
 exports being removed from 1st January, 2005. The problems of market
 access would be in the form of tariff and tariff barriers. Under these
 circumstances pure economic performance and well-managed competitive
 advantages will count more than ever. CLC has already started taking
 initial steps in this direction. It has also started making its
 presence felt in newer market round the globe and has been meeting
 potential customers to take advantage of the market post quota market
 situation.
 
 Textile
 
 Compared to previous year the trading of fabric is better inspite of
 uncertainty of market. During the year the direct sales of textile
 fabric amounted to Rs. 3701 lakhs.
 
 The Indian textile industry is facing serious challenges from cheaper
 products which are supplied by the neighboring countries and there is a
 lot of uncertainty about post quota situation in the industry, the
 expectations are positive, exports from India are expected to increase
 in the free trade era due to availability of skilled and cheap labour
 force in India and locally produced raw materials.
 
 Steel & Ferro Alloys
 
 During the year the Steel & Ferro Alloys Industry faced several
 problems like increase in the power and raw material cost, beside non
 availability of essential raw material. Inspite of all this the Company
 has achieved good results and registered a sale of Rs.7222/- lakhs
 during the year.
 
 Increase in Excise duty and freight rates are major threats to the
 industry. It is believed that the domestic Steel & Ferro Alloys selling
 price would be stabilized with cut in excise duty, freight rates and
 other benefits provided by the Government to the manufacturers.
 
 With sharp increase in global steel prices and further increase in
 steel prices consistent with opening of Duty Entitlement Pass Book
 Scheme (DEPB) the Indian steel & Ferro Alloys
 traders/exporters/manufacturers will play major role in the coming days
 by becoming more competitive.
 
 Future Outlook
 
 Your Company is planning a major expansion in the manufacturing of
 cotton yarn by setting up cotton spinning unit to utiize the surplus
 land approximately 1,43,000 sq. mtr lying at Cimmco Spinners B-1, MIDC,
 Chincholi - Kondi, Solapur 413 255, Maharashtra.
 
 Your Directors also making efforts to reduce cost at all levels of
 activity including reduction in borrowing costs and aggressive
 marketing efforts so as to achieve reasonable levels of profitability.
 
 Dividend
 
 As already informed that Company is planning major expension, to
 conserve the Companys resources for its future activities, your
 Directors have not recommended any dividend for the year under review.
 
 Fixed Deposits
 
 The Company has not invited or accepted any deposits from the public
 pursuant to Section 58A of the Companies Act, 1956 during the year
 under review. However the deposits are accepted from promoters and
 their friends/ relatives.
 
 Directors
 
 Mr. Mukund Choudhary and Mr. S. C. Grover retire by rotation and are
 eligible for re-appointment.
 
 Auditors
 
 The Auditors of the Company M/s. Sunil Jain & Co., Chartered
 Accountants retires at the ensuing Annual General Meeting and being
 eligible offer themselves for re-appointment.
 
 Listing and De-listing of Shares
 
 The Company Shares are listed and traded at The Stock Exchange, Mumbai,
 The Delhi Stock Exchange Association Ltd., New Delhi and The Stock
 Exchange, Ahmedabad and the Listing Fee has been paid till 31st March,
 2005.
 
 Consequent to the technological developments, the shares of the Company
 are traded all over India through on-line terminals provided by the
 Stock Exchange, Mumbai. In view of this, it is proposed to de-list the
 Companys Shares from the Stock Exchanges, Delhi and Ahmedabad as
 stated in the resolution. No inconvenience will be caused to those
 shareholders residing in the respective regions, since on- line
 terminals are provided by BSE at these regions. Further, listing of the
 Companys shares in many Stock Exchanges, apart from not adding any
 value to the Shareholders, results in avoidable cost, administrative
 work, delay and inconvenience.
 
 Particulars of Employees
 
 The Company has no employees whose salary exceeds the limits prescribed
 under Section 217(2A) of the Companies Act, 1956. Hence information
 required to be given under the said Section read with Companies
 (Particulars of Employees) Rules, 1975 as amended, w.e.f. 17-4-2002,
 has not been provided in this report.
 
 Corporate Governance
 
 Pursuant to Clause 49 of the Listing Agreement, (a) Report of the
 Directors on the Practices prevalent on Corporate Governance in the
 Company, (b) Management Discussion and Analysis Report and (c)
 Auditors Certificate on compliance of mandatory requirements of
 Corporate Governance are given in the annexure to this report.
 
 Directors Responsibility Statement
 
 The Directors confirms :
 
 a). in the preparation of the Annual Accounts, the applicable
 accounting standards have been followed:
 
 b). Your Directors have selected such accounting policies and applied
 them consistently and made judgment 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;
 
 c). Your 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 your Company and
 for preventing and detecting fraud and other irregularities:
 
 d). Your Directors have prepared the annual accounts on a going concern
 basis.
 
 Share Transfers & Dematerialization
 
 As the members are aware, your Companys shares are tradable
 compulsorily in electronic form and your Company has established
 connectivity with both depositories, i.e. National Securities
 Depository Limited (NSDL) and Central Depository Services (India) Ltd.
 (CDSL). In view of the numerous advantages offered by the Depository
 system, members are requested to avail the facility of
 dematerialization of the Companys shares on either of the Depositories
 as aforesaid.
 
 Acknowledgements
 
 The Directors take this opportunity to express their grateful
 appreciation for the whole hearted and sincere cooperation the Company
 had received from the various departments of Central and State
 Government, Bankers/Financial Institutions, Customers, Suppliers and
 Contractors as well as Members of the Company during the year under
 review of the Company. The Directors also wish to place on record the
 appreciation for the contribution made by all the employees of all
 levels and hope that with their continued commitment and dedication the
 Company could look forward to more profitable operations ahead.
 
                             for and on behalf of the Board of Directors
 Place : New Delhi                                      Mukund Choudhary
 Date : 28-08-2004                                     Managing Director
 
 ANNEXURE-I
 
 To the Directors Report
 
 Information under Section 217(1) (e) of the Companies (Disclosure of
 Particulars in the Report of Board of Directors) Rules, 1988 and
 forming part of the Directors Report for the year ended March 31,
 2004.
 
 A. Conservation of Energy:
 
 During the year under review continuous efforts were made to ensure
 optimum utilization of fuel and electricity and reduction of energy
 costs.
 
 a. Energy conservation measures taken :
 
 The Company is continuing to take efforts in energy conservation,
 energy saving conventional chokes, capacitors have been added and
 replaced to maintain optimum level of power factor and motors drawing
 high current have been replaced or modified the winding.
 
 b. Relevant data is respect of energy consumption is as below:
 
                                              Current Year Previous Year
                                                 2003-2004     2002-2003
 
 i. Power and Fuel Consumption
 
 a) Electricity purchased
 
 - Units (KWH)                                     7447876          N.A.
 
 - Total Amount                                     247.35          N.A.
 (Rs. in Lacs)
 
 - Rate/Unit (Rs.)                                    3.32          N.A.
 
 b) Own Generation
 (Through Genset)
 
 - Units (KWH)                                      114617          N.A.
 
 - Units per liter of Diesel/L.D.O.                   3.45          N.A.
 
 - Cost/Unit (Rs.)                                    4.47          N.A.
 
 ii. Electricity Consumption                          6.04          N.A.
 (Units) Per Kg. of Production
 of yarn (on 40s Conversion)
 
 B. Technology Absorption :
 
 Research & Development(R&D) :
 
 1. Specific areas in which R&D has been carried out by the Company:
 
 - Continuing to identify improvements to processes through properly
 documented systems to strengthen yarn quality, improve productivity and
 effective maintenance.
 
 - Drafting system modified in Speed Frame & Ring Frame to get constant
 pressure mechanically.
 
 - Defective spindles of Ring frame & Speed frame identified and
 corrected
 
 2. Benefits derived as result of the above R&D:
 
 Meeting customer requirements by consistent and improvement in quality
 of yarn along with effective utilisation of resources.
 
 3. Future plan of action:
 
 Identifying measures to further improve productivity and there by
 improving the contribution per unit of production.
 
 4. Expenditure on R & D. :
 
 a) Capital                                                      Rs. Nil
 
 b) Revenue                                                    Rs. 85536
 
 c) Total                                                      Rs. 85536
 
 d) Total R&D Expenditure as percentage of total turnover            Nil
 
 Technology Absorption, Adaptation & Innovation :
 
 a) Efforts : Upgrading machines with technologically advanced
 accessories and spares.
 
 b) Benefits : Higher output and improved quality of product
 
 c) Technology imported during the last 5 years : None
 
 C. Foreign Exchange Earnings & Outgo :
 
 1. Efforts : Continuing to put efforts to fulfill the obligations of a
 100% Export Oriented Unit in spite of domestic yarn prices being higher
 than export realization there by contributing foreign exchange to the
 National Ex-chequer.
 
 2. Earnings and Outgo : Particulars with regard to foreign exchange
 earnings and outgo appear in Schedule 18 of the accounts
 
                             for and on behalf of the Board of Directors
 Place : New Delhi                                      Mukund Choudhary
 Date : 28-08-2004                                     Managing Director