The Directors are pleased to present the Eighteenth Annual Report on the business and operations of the Company and the audited statement of accounts for the year ended 31st March, 2011.

Business Scenario and Performance

The World Economy during the year ended with shades of recession in USA, but the slowdown of economy as a result of European debt concerns further aggravated the business sluggishness particularly in the home furnishing area due to cut back in the big tickets pending.

The Overseas silk yarn supplies have seen unprecedented cost escalation by almost 100-150%. Your Directors have initiated various aggressive marketing steps like additional products in different blends, domestic sales which is getting positive response and are also hopeful of improving the performance during the coming year.

During the year under review due to steep increase in raw material cost, higher interest rates & volatile foreign currency fluctuations the Company has reported a loss of Rs. 479.06 Lacs compared to loss of Rs. 53.61 in the previous year.

Financial Results and Appropriations 
                                           (Rs. in Lacs)

Particulars                       2010-11        2009-10
 
Operating Profit                  (105.09)        303.58

Profit before tax                 (479.06)        (53.61)

Provision for taxation                  -           3.36

Provision for deferred tax        (180.46)         (7.65)

Profit after tax                  (298.60)        (49.32)

Profit brought forward 
from previous year                 916.70         966.02

Profit available for               618.09         916.70
appropriation 

During the year ended 31st March, 2011 , the Board has not recommended any dividend for the year under review.

Directors

In terms of provisions of the Companies Act, 1956 and Articles of Association of the Company, Sri Sandeep Kumar Churiwala and Sri Saket Kumar Churiwala retire by rotation and being eligible, offer themselves for re-appointment.

Directors' responsibility statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors confirms that:

(a) In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

(b) Appropriate accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of the affairs of the Company at the end of the Financial Year and of the Profit of the Company for that period.

(c) Proper and sufficient care has been 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 annual accounts have been prepared on a going concern basis.

Corporate Governance

Your Company has consistently been complying with the Corporate Governance Code prescribed by SEBI and a detailed report on Corporate Governance together with a Certificate of Compliance from the statutory auditors, as required by Clause 49 of the Listing Agreement, forms a part of this Annual Report.

Conservation of energy, Technology absorption and Foreign exchange earnings and outgo

Information under Section 2l7(l)(e) read with Companies (Disclosure of particulars in the report of Directors) Rules, 1988 is set out in Annexure - A, forming part of this report.

Management Discussion & Analysis Report

Management Discussion & Analysis Report is enclosed at Annexure - B to this report.

Particulars of employees

There are no employees employed during the year or part of the year who were in receipt of remuneration in excess of the limits prescribed under Section 2I7(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

Auditors

M/s. G. Bagrodia & Co, Chartered Accountants, Bangalore bearing Firm Registration No.: 000312S, retires at the conclusion of ensuing Annual General Meeting and are eligible for re-appointment. Directors recommend the appointment of the retiring Auditors.

Auditor's Report

Regarding Point No.4 (a)

Tho Company has initiated necessary efforts with the concerned to realize / recover the advances. Management considers all advances as good and realizable though slowly in view of present recession.

Point No. 4 (b)

The Company maintains cost records as prescribed by the central government under Section 209(l)(d) of Companies Act, 1956 and the valuation for the finished and semi finished goods are taken at the cost as certified by a Cost Accountant and others at cost of procurement or realizable value whichever is less as per the normal industrial standards.

Acknowledgements

Your Directors wish to place on record their appreciation for the excellent co-operation and assistance received from Bankers, Financial Institutions, Central and State Government. We express our wholehearted thanks to the customers and suppliers for their valued patronage and the shareholders for the continued confidence reposed in the Company and its Management.

Your Directors also wish to place on record their appreciation for the total dedication and wholehearted efforts made by employees of the Company.

                                    For and on behalf of the Board

                                            Sushil Kumar Churiwala
                                    Chairman and Managing Director