The Members of the Company for the year ended 31st March 2011
 
 The Board of Directors present the Twenty Third Annual Report together
 with the Audited Accounts of the Company for the year ended March 31,
 2011.
 
 1.  FINANCIAL HIGHLIGHTS:
 
 Particulars                                 Year ended    Year ended
 
                                             31.03.2011    31.03.2010
                                           (Rs. in lacs) (Rs. in lacs)
 
 Sales (Net of Excise duty)                           -          0.46
 
 Gross Profit/(loss) before Interest 
 and Depreciation                               (112.15)      (266.10)
 
 Profit/(loss) before tax and exceptional 
 items                                          (927.70)     (1102.70)
 
 Less: Exceptional items                         236.11             -
 
 Add: Deferred Tax Assets                             -       (516.48)
 
 Profit/(Loss)                                 (1163.82)     (1619.38)
 
 Loss brought forward from previous year       (4121.54)     (2502.16)
 
 Balance carried to Balance Sheet              (5285.37)     (4121.54)
 
 
 
 
 2.  OPERATIONS:
 
 During the year under review, the Company did not carry out any
 production activity, the factory being closed with effect from June 26,
 2008.
 
 3.  RESTRUCTURING
 
 Subsequent to the lenders not agreeing to consider the Company''s
 proposal for a reworking of the CDR package, the management is actively
 exploring various other options for restructuring the business and
 financials of the Company, including unlocking asset values and
 entering into other business or product lines. To this end approval of
 shareholders had been obtained in December 2008 as per provisions of
 Sec 293 (1) (a) of The Companies Act, 1956, which will be implemented
 in terms of the directions of Hon''ble Company Law Board in a matter
 pending before it. As part of this ongoing exercise, the Company
 entered into an arrangement for assignment of leasehold rights of land
 during the previous year and advance received has been utilised, inter
 alia, to settle part of the liabilities of the Company. However, the
 global financial crisis and certain impediments having affected its
 implementation, the management is pursuing the matter for an early
 resolution. The option of establishing of manufacturing operations at
 another site offering better competitive advantages in terms of supply
 chain logistics, input availability and costs is being actively pursued
 and a clearer picture on this front is expected to emerge by the end of
 the current fiscal.
 
 4.  NET WORTH STATUS AND IMPLICATIONS
 
 The net worth of the Company has fully eroded during the year ended
 March 31, 2011. However, the management has received legal opinion to
 the effect that no reference need be made to BIFR, as certain
 conditions required for the same as per the Sick Industrial Companies
 (Special Provisions) Act, 1985 are not applicable to the Company under
 the present circumstances.
 
 5.  EMPLOYEE RELATIONS:
 
 Subsequent to closure under the relevant provisions of The Industrial
 Disputes Act, 1947 which was declared with effect from June 26, 2008,
 the employees'' union had preferred to move the Industrial Court in the
 matter. The matter is pending in the Hon''ble Court. The management has
 been advised that the closure is in line with relevant legal
 provisions.
 
 6.  PARTICULARS OF EMPLOYEES:
 
 As per provisions of Section 217(2A) of the Companies Act, 1956, read
 with Companies (particulars of Employees) Rules, 1975, as amended the
 name and other particulars of the employee as on 31.3.2011 is given
 below:-
 
 Sr. Name   Age  Designation   Nature of    Remuneration   Qualification
 No                            duties      (In Rs.)
 
 
 1   Mr.    56   WholeTime     General      1,30,655       B.Tech
 S.P.Gupta       Director      Management                 (Chemical
                                                           Engineering)
                                                           and MBA
 
 
 Sr.  Name   Date of          Experience      Last Employement held
 No.         commencement 
             of employement
 
                                           Organisation   Designation
 1.  Mr.S.P. June 28,2007     32           Consolidated   Executive
     Gupta                                 Fibres &       Director
                                           Chemicals
                                           Limited
 
 
 7.  SAFETY, HEALTH & ENVIRONMENT POLICY:
 
 After the closure of manufacturing operations, the Company continues to
 follow applicable practices relating to safety and health of personnel,
 plant, machinery and the environment, to the extent relevant and
 feasible.
 
 8.  DEMATERIALISATION OF COMPANY''S EQUITY SHARES:
 
 87.97 % of the Company''s equity shares have been dematerialised.
 
 9.  THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
 DIRECTORS) RULES, 1988:
 
 Information required under the Companies Act (Disclosure of Particulars
 in the Report of Board of Directors) Rules, 1988 is set out in Annexure
 A and forms part of this report.
 
 10.  DIRECTORS:
 
 Dr. P. P. Shastri retires by rotation, offers himself for appointment
 as director, You are requested to appoint him.
 
 Mr. R. S. Agarwal retires by rotation, and being eligible, offers
 himself for re-appointment. You are requested to appoint him.
 
 11.  CORPORATE GOVERNANCE:
 
 Pursuant to Clause 49 of the Listing Agreement with the Stock
 Exchanges, a report on Corporate Governance is annexed hereto and forms
 part of this Report.
 
 12.  DIRECTORS'' RESPONSIBILITY STATEMENT:
 
 As required under section 217 (2AA) of the Companies Act, 1956, the
 Directors hereby confirm that:
 
 a) in the preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanations relating to
 major departures;
 
 b) such accounting policies as were reasonable and prudent were
 selected in preparation of the Accounts and applied consistently.
 Further judgments and estimates that were reasonable and prudent were
 also made in the course of preparation of Accounts so as to give a true
 and fair view of the state of affairs of the Company as at the end of
 the financial year and of the profit of the Company for the year ended
 31st March, 2011;
 
 c) proper and sufficient care was taken 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;
 
 d) the Accounts have been prepared on a going concern basis.
 
 13.  AUDITORS:
 
 M/s. Lodha & Co., Chartered Accountants, the Auditors of the Company,
 retire at the ensuing Annual General Meeting. They have expressed their
 willingness to continue in office if appointed.
 
 14.  AUDITORS'' REPORT:
 
 Observations of the Auditors in their Report are largely self
 explanatory. However, for the sake of additional clarity, the relevant
 observations of the Auditors'' at Para No 3 (a), (b), (e) and 4 is
 further explained as follows - Your attention is drawn to Para ''3 and
 ''4'''' of this report as well as Note B.4 of Notes to Accounts. In the
 view of the Board, the ongoing efforts towards restructuring of the
 Company''s business are likely to fructify and hence treatment of
 accounts on a ''going concern'' basis is appropriate.
 
 15.  ACKNOWLEDGEMENT:
 
 The Board of Directors takes this opportunity to thank the Financial
 Institutions, Bankers and other stakeholders for their continued
 support and co-operation.
 
 
                                       For and on behalf of the Board
 
                            S. P. Gupta                  G. P. Goenka
 
                    Whole time Director                      Chairman