The Directors have pleasure in presenting Annual Report and audited
 accounts for the financial year ended on March 31, 2012.
 
 1.  FINANCIAL RESULTS
 
                                             (Rs. In crores)
 
                                       2011-12    2010-11
 
 Net Profit for the year before 
 exceptional items                        1.29       3.08
 
 Exceptional items                           -      69.94
 
 Net profit after exceptional items       1.29      73.02
 
 2.  OPERATIONS
 
 During the financial year, the Company has achieved a turnover of about
 Rs. 167 crores as against Rs. 143 crores during the previous financial
 year. With the entry of new manufacturers and additions to the
 capacities by all the major producers of denim in the country, there
 has been surplus in the market with the average realizations declined
 during the year under review. Company is facing acute shortage of
 working capital which has impacted profitability of the Company for the
 year. Production cost pushed up due to exorbitant increase in power and
 other input cost. Inspite of difficult business conditions prevailing
 in the domestic textile market and continued recessionary trend
 prevailing in global textile markets, your Company has been able to
 generate net profit of about Rs. 1.29 crores as against net profit of
 Rs. 3.08 crores in previous year. The exports of Denim are not
 remunerative due to world wide competition in the global market of
 Denim Industry, flooding of cheaper denim fabric by China, East Asian
 Countries & Pakistan. However, the Company is continuing its efforts to
 explore opportunities for its products in overseas markets and could
 export the Denim Fabrics of about Rs. 2 crores during the year under
 review. Your Company has also taken several remedial steps to meet the
 challenges viz. measures of saving in cost at all fronts of operation,
 optimize use of available resource etc. Your Directors regret their
 inability to recommend any dividend for year under review in absence of
 net profits.
 
 3.  FUTURE PROSPECTS
 
 Since last few years the Denim Industry is passing through difficult
 business conditions. Due to change in fashion the demand of denim
 fabric has declined world over resulting into over supply situation.
 Over supply situation coupled with lower demand have squeezed the
 margins not only of your Company but almost of every leading houses in
 denim segment of textiles. The substantial increase in the number of
 players in denim sector is a cause of worry and may lead to further
 glut in the market. Domestic demand is expected to grow at 20-25%
 whereas supply growth is expected to be in excess of 50%. The long term
 success is possible only when the product mix is diversified. However
 such diversification will need large investment which is not possible
 for your Company as we have shortage of funds. Thus prospects of Denim
 industry remains uncertain.
 
 4. RESTRUCTURING OF DEBTS & REFERENCE TO BIFR
 
 The company is making continuous efforts for settlement of dues of the
 secured lenders. Once settlement with the remaining secured lenders are
 completed, company will file fully tied up Draft Rehabilitation Scheme
 with Operating Agency & Hon''ble BIFR.
 
 5. PUBLIC FIXED DEPOSIT
 
 In view of petition filed by the Company, the Hon''ble Company Law Board
 has passed an order on 21/12/2001 that The repayment of fixed deposits
 shall be made by the Company in accordance with revival scheme as and
 when approved by BIFR under the provision of SICA. However payments on
 compassionate ground are continued to be made as per the decision of
 the committee formed by Hon''ble Company Law Board for this purpose.
 
 6.  DIRECTORS
 
 Shri RR. Maheshwari is liable to retire by rotation and being eligible,
 offers himself for re-appointment. Appropriate resolution for the
 re-appointment of the aforesaid Director is being moved at the ensuing
 Annual General Meeting, which the Board recommends for your approval.
 
 7.  AUDITORS
 
 M/s. J. T. Shah & Co., Chartered Accountants, Ahmedabad retires at the
 forthcoming Annual General Meeting. Your Directors recommend their
 re-appointment as Auditor of the Company for the year 2012-13. The
 observations made by the Auditors are self explanatory and have been
 dealt with in the notes forming part of the financial statements and
 hence need no further clarifications.
 
 8.  INDUSTRIAL RELATIONS & PARTICULARS OF EMPLOYEES
 
 Your Directors sincerely appreciate the workers, staff and officers for
 putting in their best efforts. The Company has enjoyed healthy and
 cordial industrial relations throughout the year under review. There is
 no employee getting remuneration as prescribed under Section 217 (2A)
 of the Companies Act, 1956 read with Companies (Particulars of
 Employees) Rules, 1975 as amended.
 
 9.  DIRECTOR''S 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 along with proper explanation relating to
 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 the year under review; 
 
 iii) the Directors have 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 for preventing and detecting fraud and other
 irregularities;
 
 iv) the Directors have prepared the annual accounts on a going concern
 basis.
 
 10.  PARTICULARS OF ENERGY CONSERVATION. TECHNOLOGY ABSORPTION AND
 FOREIGN EXCHANGE OUTGO
 
 The statement of particulars relating to energy conservation,
 technology absorption and foreign exchange earnings and outgo as
 required in accordance with Section 217 (1) (e) of the Companies Act,
 1956 read with Rule 2 (A), 2(B) and 2 (C) of the Companies (Disclosures
 of particulars in the report of Board of Directors) Rules, 1988 is
 annexed hereto and forms part of this report.
 
 11.  CONSTITUTION OF AUDIT COMMITTEE
 
 The Board of Directors has constituted the Audit Committee of Directors
 to exercise powers and discharge functions as stipulated in section
 292A of the Companies Act, 1956. The present Audit Committee consists
 of member directors as follows:-
 
 Shri H. L. Sharma, Chairman
 
 Shri B. L. Verma
 
 Shri R.R. Maheshwari (From 22nd March, 2012)
 
 12.  ACKNOWLEDGEMENTS
 
 The Board places on record its sincere thanks and gratitude for the
 assistance and continued co-operation that the Company has been
 receiving from the financial institutions, banks, employees,
 shareholders and Central as well as State Government.
 
                                               ON BEHALF OF THE BOARD
 
                                                       (SACHIN RANKA)
                                         Chairman & Managing Director
 
 Place: Mumbai
 Date : 29th June, 2012