ANNUAL REPORT 2005-2006
 
 DIRECTORS' REPORT
 
 To the Members,
 
 Your  Directors  have  pleasure  in submitting  their  12th  Annual  Report 
 alongwith  the  audited accounts for the year ended 31st  March,  2006  and 
 Auditors Report thereon.
 
 FINANCIAL RESULTS
 
                                              Year ended     Year ended
                                              31.03.2006     31.03.2005
 
 Gross Profit	                                 995.11       1,076.34
 Financial Expenses/Lease Rent	                 526.00 	601.56
 Profit before Depreciation	                 469.11 	474.78
 Less: Depreciation & Amortization	         374.10 	354.90
 Profit for the year	                          95.01 	119.88
 
 RESPONSIBILITY STATEMENT
 
 Your Directors confirm that:
 
 (i)  in  the preparation of the annual accounts the  applicable  accounting 
 standards have been followed;
 
 (ii) the Directors have 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 under review and of the profit  of 
 the Company for the year;
 
 (iii)  the  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 the Company and  for 
 preventing and detecting fraud and other irregularities; and
 
 (iv)  the  Directors have prepared the annual accounts on a  going  concern 
 basis.
 
 OPERATIONS
 
 The  Company produced 10,505 tonnes of yarn valuing Rs. 11,132 Lacs  during 
 the period under review as against 10,191 tonnes of yarn valuing Rs. 11,487 
 Lacs produced during last year.
 
 Severe  competition and increase in raw material cost during year  resulted 
 in  severe pressure on sales realizations and margins. Inspite of  all  the 
 adverse conditions your Company hits earned cash profit of Rs. 469.11  Lacs 
 during the year under review. This has been possible due to strict  control 
 over costs through various means.
 
 Your  Company's  product  is being increasingly  recognised  as  a  quality 
 product both in the national as well as international markets.
 
 DIVERSIFICATION & MODERNISATION
 
 During  the  year the Company has undertaken modernization of  Unit  No.  1 
 where  LR6  Ring  Frames have been installed  replacing  old  Texmaco  Ring 
 Frames. The Company has installed two new Autoconers of Savio make. To give 
 better quality of yarn, yarn conditioning machine has been installed.
 
 EXPORTS
 
 During the year your Company exported 4,116 MTs yarn valuing Rs. 4,018 Lacs 
 against  exports of 4,036 MTs valuing Rs. 4,140 Lacs, last  year  including 
 merchant  exports of 2,904 MTs valuing Rs. 2,782 Lacs. Existing markets  in 
 Belgium,  Turkey, Germany, Italy, Kenya, and Egypt have been  consolidated. 
 Company  plans to further increase its exports to the existing markets  and 
 also tap new markets.
 
 PROSPECTS IN THE CURRENT YEAR
 
 The  market  of textile industry is improving and there is good  demand  of 
 products,  produced by the Company. However, because of increase  in  crude 
 oil  prices, there is a pressure on increase in prices of raw material  and 
 other inputs.
 
 In  the financial year budget 2006-07, the Government of India has  reduced 
 duty  on polyester fibre, viscose fibre and other man made fibres from  16% 
 to  8%.  The Company shall be benefited because of this change  in  Central 
 Excise Duty.
 
 CAPITAL
 
 There was no change in the authorised share capital of the Company.
 
 LISTING ARRANGEMENTS
 
 The  Company's shares are presently listed with Mumbai Stock  Exchange  and 
 listing fees to them stands duly paid.
 
 ENERGY  CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN  EXCHANGE  EARNINGS 
 AND OUTGO
 
 Pursuant  to  Companies (Disclosures of particulars in the  report  of  the 
 Board  of  Directors)  Rules, 1988, relevant details in forms  A  &  B  are 
 annexed and form part of this report.
 
 PERSONNEL
 
 During  the  year under Report, the relations between  the  Management  and 
 Staff/Workers remained harmonious.
 
 During  the  year no employee has drawn remuneration beyond the  limits  as 
 prescribed under Section 217(2A) of the Companies Act, 1956.
 
 DIRECTORS
 
 Shri V K.Ladia and Shri S.C. Kuchhal, Directors would retire by rotation at 
 AGM and being eligible they offer themselves for reappointment.
 
 CORPORATE GOVERNANCE
 
 The  Corporate  Governance Code introduced by the Securities  and  Exchange 
 Board  of  India  (SEBI), is being followed by your  Company  in  terms  of 
 Listing Agreement with the Stock Exchange. Report on the implementation  of 
 the Code is annexed and forms part of this report.
 
 DEMATERIALISATION OF SHARES
 
 In  pursuance of SEBI/Stock Exchange directions, your Company  has  already 
 offered the option of demat to the esteemed shareholders. Connectivity with 
 National  Securities  Depository  Limited  (NSDL)  and  Central  Depository 
 Services  (India) Limited (CDSL) has been obtained. As on 31 March,  2006, 
 48,22,500 equity shares representing 32.15% of total paid up share  capital 
 have already been demated.
 
 AUDITORS
 
 M/s.  M.C. Bhandari & Co., Chartered Accountants, Jaipur, Auditors  of  the 
 Company  will  cease to hold office as Auditors at the  conclusion  of  the 
 ensuing  Annual  General Meeting, but are eligible for  reappointment.  The 
 observations made by the Auditors are self-explanatory and have been  dealt 
 with  in  Schedule  No. 14 forming part of the accounts and  hence  do  not 
 require any further clarification.
 
 ACKNOWLEDGMENTS
 
 Your  Directors take this opportunity to express their sincere  thanks  for 
 the continued support and valuable guidance and assistance provided by  the 
 various   departments   of  Central  and   State   Governments,   Financial 
 Institutions,  Bankers and Business Constituents. The Board also wishes  to 
 place  on record its warm appreciation for the dedicated services  rendered 
 by  the employees of the Company. Your Directors are also grateful  to  the 
 investing  public  for  the  confidence reposed  in  the  Company  and  are 
 confident that your Company will continue to receive such cooperation  from 
 all in future.
 
 	                           For and on Behalf of the Board
 
 	                           sd/-
 Place : Udaipur	                   V. K. Ladia
 Date  : 21st June, 2006	           Chairman
 
 ANNEXURE TO THE DIRECTORS' REPORT
 
 FORM-A
 
 I. CONSERVATION OF ENERGY
 
 In order to stop wastage of energy, the company has taken various steps  to 
 reduce  consumption  of  energy like use of synthetic  tapes,use  of  light 
 weight bobbins etc. Studies are also being conducted for more efficient use 
 of  other  utilities  like steam and water. The Company  has  installed  at 
 Dungarpur Heat Recovery Unit at its Power Plant to supply steam to the main 
 plant.
 
 Figures  given  hereunder  are self explanatory that  steps  taken  by  the 
 Company to conserve energy are giving positive response :-
 
 A Power & Fuel Consumption
 
 		                              Current Year    Previous Year
 1 Electricity
 (a) Units Purchased		
 Total Amount ( in Rs.)		                         -                -
 Rate / Unit / Rs.		                         -                -
 (b) Own Generation
 (i) Through Diesel Generator
 Units		                                  2,13,571	  16,09,080
 LDO, SKO & HSD Consumed ( Kgs.)		            51,286	   3,78,909
 Unit per Kg. Of LDO/HSD		                      4.16	       4.25
 LDO, SKO & Diesel Value ( in Rs. )	         13,22,398	  89,60,354
 Including Electricity Duty
 Cost / Unit		                              6.19	       5.57
 (ii) Through Furnance Oil Generator
 Units	                                       3,28,27,510	3,15,79,697
 F.O. Consumed ( Kgs.)	                         73,42,330	  74,36,803
 Unit per Kg. Of F .O.	                              4.47	       4.25
 FO Value ( in Rs.) including 
 Electricity Duty	                      12,04,15,500	8,79,86,512
 Cost / Unit	                                      3.67	       2.79
 
 2. Coal ( Steam used for Generation 
 of Steam in boiler )		                         -                -
 Quantity ( in tonnes )
 Total Cost ( in Rs.)
 Average Rate
 
 3. Furnance Oil
 Furnance Oil Quantity ( in Kgs.)		         -                -
 Total Amount
 Average Rate
 
 4. Other/Internal Generation 
 Quantity	                                        -		  -
 Total Cost
 Rate/Unit
 
 B Consumption per Unit of Production
 	
 Production in Kgs.	                      1,05,05,049	1,01,91,025
 Electricity Unit Purchased
 RSEB	                                                -		  -
 DG Set	                                      3,30,41,081	3,31,88,777
 TOTAL	                                      3,30,41,081	3,31,88,777
 Electricity per Kg. of Yarn (Unit)	             3.15	       3.26
 Coal per Kg. of Yarn (Kg.)	                        -		  -
 
 FORM B
 
 II. TECHNOLOGY ABSORPTION
 
 Efforts made in technology absorption as per Form B of the Annexure to  the 
 Rules.
 
 1. Research & Development (R & D)
 
 a) Specific areas in which R & D carried out by the Company.
 
 b) Benefit derived as a result of the above R & D
 
 c) Future Plan of Action
 
 d) Expenditure on R & D :	( Rs. In Lacs )
 
 i) Capital	                            0
 ii) Recurring	                        10.39
 iii) Total	                        10.39
 iv) Total R & D Expenditure as 
 a % of total turnover	                 0.09
 
 2. Technology Absorption, Adaptation and Innovation:
 
 i)  Efforts, in brief, made towards technology absorption,  adaptation  and 
 innovation.
 
 ii)  Benefit  derived as as result of the above i.e.  product  improvement, 
 cost Reduction, product development, import substitution etc.
 
 iii) In case of imported technology (imported during last 5 years  reckoned 
 from the beginning of the financial year).
 
 a) Technology imported 
 b) Year of Import
 c) Has technology been fully absorbed
 d) If not fully absorbed, areas where this has not taken
 place, reasons thereof and the future plans of action.
 
 III. FOREIGN EXCHANGE EARNINGS & OUTGO
 
 During the year your Company exported 4,116 MTs yarn valuing Rs. 4,018 Lacs 
 against  exports  of  4,036 MTs valuing Rs. 4,140  Lacs,  last  year  which 
 included  merchant  exports of 2,904 MTs valuing Rs. 2,782  Lacs.  Existing 
 markets  in  Belgium, Turkey, Germany, Italy, Kenya, and  Egypt  have  been 
 consolidated. Company plans to further increase its exports to the existing 
 markets and also tap new markets.
 
                                                   2005-2006 	  2004-2005 
 
 i) Total Foreign Exchange Used                  3,54,41,617     2,95,37,940
 ii) Total Foreign Exchange Earned              30,89,07,701    38,77,95,705
 
 For and on behalf of the Board
 
                                              sd/-
 Place : Udaipur	                             (V K. Ladia)
 Date : 21st June, 2006	                     Director.