Our Directors have great pleasure in presenting the 28th Annual Report
 of your Company alongwith the Audited Statements of Accounts for the
 year ended on 31th March, 2004 and Auditors Report thereon.
 
 FINANCIAL RESULTS
 
                                                31.03.2004    31.03.2003
                                             (Rs. in Lacs) (Rs. in Lacs)
 
 Sales & Other Income                              1414.30       1095.24
 
 Profit/(Loss) before Financial Charges           (337.07)      (856.65)
 & Depreciation
 
 Finance Charges                                   1143.89       1010.39
 
 Depreciation                                       253.47        243.72
 
 Pre-Tax Profit (Loss)                           (1734.43)     (2110.76)
 
 Balance Brought Forward                         (6590.52)     (4479.71)
 
 Previous Year Expenses                            (51.54)        (0.05)
 
 Balance Carried to Balance Sheet                (8376.49)     (6590.52)
 
 DIVIDEND
 
 Your Directors regret their inability to recommend any dividend due to
 non-availability of profits.
 
 OPERATING RESULTS
 
 During the year the total income of the company has increased due to
 better market conditions but due tc shortage of working capital, units
 are still operating on job work basis. During the year companys total
 turnover and other income has increased from Rs. 1095.24 lacs in
 previous year to Rs. 1414.30 lacs in current year which showed 29%
 growth as compared to previous year. The job charges for the year
 2003-2004 were Rs. 148.17 lacs as against the previous year job charges
 of Rs. 228.25 lacs. Loss before financial charges and depreciation has
 reduced from Rs. 856.65 lacs in 2002-2003 to Rs. 337.07 lacs in
 2003-2004.
 
 The Company is making its best efforts to reduce its cash losses by
 increasing its own production & discouraging the job work, which will
 reflect the better financial results during the current year.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217 (2AA) as inserted by Companies Amendment Act,
 2000 your Directors hereby confirm.
 
 (i) that in the preparation of the annual accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material departures except as mentioned in Auditors
 Report;
 
 (ii) that the Company had selected such accounting policies and applied
 them consistently and made judgements 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 year.
 
 (iii) that the Company had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with he
 provisions of this Act of safeguarding the assets of the company and
 for preventing and detecting fraud and other irregularities;
 
 (iv) that the Company had prepared the annual accounts on a going
 concern basis.
 
 FIXED DEPOSITS:
 
 During the year the Company has neither accepted nor renewed Fixed
 Deposits U/s 58A of the Companies Act, 1956. The Company has no overdue
 deposits outstanding other than those unclaimed as on 31st March, 2004.
 
 AUDITORS REPORT
 
 The Auditors Report and Notes on Accounts are self explanatory and
 therefore, do not call for any comments.
 
 AUDITORS
 
 M/s S Tandon & Associates, Chartered Accountants, Chandigarh are
 retiring at the forthcoming Annual General Meeting and being eligible,
 offer themselves for re-appointment.
 
 The Company has received a consent letter Under Section 224 (1) (B)
 from M/s S. Tandon & Associates, Chartered Accountants, Chandigarh to
 act as Statutory Auditors of the Company for the year 2004-2005. Your
 Directors recommend the appointment of M/s S. Tandon & Associates,
 Chartered Accountats as Statutory Auditors of your Company for your
 approval for the current financial year.
 
 COSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 The information relating to conservation of energy, absorption and
 foreign exchange earnings and outgo as required under section 217(1)(e)
 of the Companies Act, 1956 read with Companies (Disclosure of
 Particulars in the Report of Board of Directors) Rules, 1988 is given
 in Annexure which forms part of this Report.
 
 DIRECTORS
 
 Sh. Anil Jain, director who is retiring at this meeting offers himself
 for reappointment. Sh. M.K. Katara have resigned from the directorship
 of the company. Sh. Mahinder Jain appointed as an additional director
 of the company, who will hold office till this Annual General Meeting
 unless appointed as director of the company in this Annual General
 Meeting by the members of the Company.
 
 Directors place on record their gratitude for the services rendered by
 Sh. M.K. Katara during his tenure as director of the company and
 welcome Sh. Mahinder Jain on the Board of the company.
 
 COST AUDITORS
 
 M/s. Khushwinder Kumar & Associates, Chartered Accountants, Jalandhar
 has been appointed as the Cost Auditors of the Company for the year
 2003-2004 and their Report will be submitted to the Deptt. Of Companies
 Affairs, Govt. of India in accordance with the requirement of Law.
 
 REFERENCE TO THE BOARD FOR INDUSTRIAL & FINANCIAL RECONSTRUCTION UNDER
 SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT,1985
 
 Since the net-worth of the company was completely eroded as per the
 Balance Sheet for the year ended 31.03.2001, the reference was made to
 the Board for Industrial & Financial Reconstruction under the Sick
 Industrial Companies (Special Provisions) Act, 1985, which was rejected
 by the BIFR. The Company made an appeal (Appeal No. 259 of 2001 against
 the said order before AAIFR.
 
 The AAIFR had disposed off the appeal vide their order dated
 27.11.2001. Fresh reference on the basis of Balance Sheet as on
 31.03.2001 was filed which was registered with BIFR as Case No.
 341/2001. The case was heard by BIFRs Bench-l on 2.9.2003 and the
 Bench has reserved its orders Honble BIFR vide its order dated
 16.12.2003 appointed PNB as operating agency to conduct a special
 investigative audit (SIA) in the accounts of the Company and to
 restructure the Balance Sheet of the Company as on 31.03.2001 as per
 the direction of AAIFR. M/s M. Verma & Associates a firm of Chartered
 Accountants conducted SIA into the accounts of the company and
 submitted its report to PNB which was sent to BIFR and other secured
 creditors for their comments. SIAs conclusion is that from the
 restructured Balance Sheet as at 31.03.2001, it may be observed that
 accumulated losses of the company were Rs. 2302.79 lac which still
 exceeds the networth of the Company (Rs.1338.06 lacs), meaning thereby
 that the company is sick as per provisions of SICA. The operating
 agency has concurred with SIA conclusions.
 
 A reference on the basis of the Balance Sheet for the year ended at
 31.03.2002 has also been made before the BIFR which has been registered
 as Case No. 64/2003 and is pending for hearing.
 
 PARTICULARS OF EMPLOYEES U/S 217(2A)
 
 The Particulars of employees as per Section 217(2A) of the Companies
 Act, 1956 read with Companies (Particulars of Employees) Rules, 1975
 are NIL. No employee is being paid salary more than the limits given
 u/s 217(2A) of the Companies Act, 1956, read with Companies
 (Particulars of Employees) Rules 1975, as amended.
 
 ADDITIONAL INFORMATION-BALANCE SHEET ABSTRACT AND COMPANYS GENERAL
 BUSINESS PROFILE
 
 Information pursuant to Department of Company Affairs Notification
 dated 15th May, 1995 relating to the Balance Sheet Abstract and
 Companys General Business Profile are given in the Annual Report for
 your information.
 
 INDUSTRIAL RELATIONS
 
 Industral relations though remained harmonious in all the Units of the
 Company during the year, yet the number of workers reduced
 substantially due to less capacity utilization.
 
 COMPLIANCE OF CLAUSE 47 & 49 OF LISTING AGREEMENT:
 
 The equity shares of the Company are listed at Ludhiana, Delhi and
 Mumbai Stock Exchanges. Annual Listing Fees for the last four years
 has not paid to all these Stock Exchanges due to financial constraints
 being faced by the Company. Seperate Report on Corporate Governance is
 annexed herewith as a part of this Report as Annexure II.
 
 ACKNOWLEDGEMENT
 
 Your Directors place on record their appreciation for the continuous
 cooperation of the workers, the members of the staff and the executives
 of the Company. Your Directors also place on record appreciation of the
 assistance and co-operation extended by all India Financial
 Institutions/Investment Institutions and Banks.
 
                                          For and on behalf of the Board
                                                                    Sd/-
 Place: LUDHIANA                                             (N.K.OSWAL)
 Date 31.08.2004                          CHAIRMAN-CUM MANAGING DIRECTOR
 
 ANNEXURE I
 
 INFORMATION AS PER SECTION 217(1) (e) READ WITH COMPANIES (DISCLOSURE
 OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND
 FORMING PART OF THE DIRECTORS `REPORT FOR THE YEAR ENDED 31 MARCH,
 2004.
 
 A. CONSERVATION ENERGY:
 
 a) The Company is aware of the importance of conservation of energy and
 continuous efforts are being made to reduce energy cost at all levels.
 Special attention is being given for the use of energy efficiency
 equipments. During the year company reviewed and continued to pursue
 the energy conservation measures taken in the previous year with a view
 to further reduce the cost of energy and consequently the cost of
 production.
 
 b) The Management is committed to further identify new areas where the
 convention equipments can be replaced by latest equipments so as to
 reduce the consumption of various sources of energy.
 
 B. TECHNOLOGY ABSORPTION
 
 1. RESEARCH & DEVELOPMENT
 
 R & d department of the Company continued to support the Companys
 business by providing improved as well as new products and process to
 establish market leadership.
 
 a) Proper product development through extensive analysis of the
 existing qualities of yarns have resulted in encouraging results and
 are expected to yield nore benefits in future.
 
 b) The Company will continue to given emphasis on product development
 in process, product quality, cost reduction, improvement in process,
 productivity, safety and pollution control
 
 c) FUTURE PLAN OF ACTION
 
 The Company is planning to introduce various qualities of yarns, like
 blended yams to increase its overall market share, Various new and
 unique coloured yams will also be launched shortly for the benefit of
 the costomers at an affordable cost.
 
 d) EXPENDITURE ON RESEARCH & DEVELOPMENT
 
 Specific areas in which R & D activities carried out by the Company has
 resulted in encouraging results and the benefits are expected in
 future:
 
 New Product/Process Development
 
 - Technology Enhancement to active standards.
 
 - Technology upgradation
 
 Expenditure on Research & Development are very difficult to ascertain
 as the same staff and equipments are used for production and quality
 control.
 
 2. Fechnology absorprion, adaptation and innovation :
 
 The Company is continuing its efforts to improve the quality of its
 products thereby strengthening its market share.
 
 3. imported Technology (Imported during last 5 years) - Nil
 
 C. FOREIGN EXCHANGE EARNINGS AND DUTGO
 
 a) Company has successfully entered into export market by making
 exports during the year. The response to its products in the
 international market is encouraging and repeated export orders are
 being received by the company :
 
 b) Total Foreign Exchange used and earned:
 
                                                         (Rs. lacs)
                                                   2003-04       2002-03
 
 Used                                                45.08         35.32
 
 Earned                                             325.87        288.87
 
                                          for and on behalf of the Board
                                                                    Sd/-
 PLACE: LUDHIANA                                            (N.K. OSWAL)
 DATE: 31.08.2004                         CHAIRMAN-CUM MANAGING DIRECTOR