DIRECTORS' REPORT

To the Shareholders,

Your Directors have pleasure in presenting the 47th Annual Report with Audited Financial Statements for the financial year ended 31st March, 2014.

CLOSURE OF MANUFACTURING OPERATIONS

As reported earlier, the industrial undertaking of the Company had been permanently closed down after seeking requisite permission from Government of Uttar Pradesh under the provisions of the Uttar Pradesh Industrial Disputes Act, 1947. The Company is now exploring other possibilities so as to have optimal utilization of its real estate and other business activity.

SETTLEMENT WITH BANKS

In its endeavour to arrive at an amicable One Time Settlement of the outstanding dues of the banks, the Company has finalized settlements with Abu Dhabi Commercial Bank, Allahabad Bank, Karnataka Bank and Bank of Baroda whose dues have been duly paid by the assignee of the debts. Recently, Punjab National Bank has also approved One Time Settlement of its dues. The settled dues are being paid by Ashoka Mercantile Limited (AML), a Group MKM Company. Accordingly, instead of the concerned banks, AML is now the secured creditor of the Company. The banks had initiated recovery proceedings under SARFESAI Act, 2002 and have sold the entire movable assets including Plant & Machinery, Stores & Spares and Structures of the Company which had been dismantled and removed. This had enabled the Company to reduce its NPA dues by Rs.33.61 crores. Further, a piece of Land admeasuring 47,815 Sq. Yds. had also been approved to be sold by Debts Recovery Tribunal, New Delhi.

CURRENT STATUS OF OPERATIONS

Since the Company owns substantial real estate, in its endeavour to rehabilitate the Company and to tap its resources to augment finances so as to be able to liquidate its huge liabilities and to utilize the surplus for taking up new business activity in the Company, as authorized by the Memorandum of Association of the Company, the Board of Directors of the Company had approved to commence Real Estate business w.e.f. 1st April, 2014. Accordingly, to facilitate carrying on of the real estate business, the land and buildings owned by the Company are proposed to be

DIVIDEND

In view of the Losses suffered by the Company in the past, your Directors are unable to recommend any Dividend on Equity and Preference Share Capital.

OPERATIONS

During the year under review, the Company registered total revenue of Rs. 42.31 lacs from sale of old stocks etc. and has earned a Profit after tax of Rs. 262.32 lacs after taking into account exceptional income.

EXPORTS

On account of closure of the manufacturing operations of the Company, there has not been any export during the year. The FOB value of exports during the previous financial year was nil.

FIXED DEPOSITS

The Company had stopped accepting deposits from public. During the year under review, no deposit was claimed for payment. At the end of the financial year, the balance on account of Fixed Deposits accepted from the Public and Members stood at Rs. 25.67 lacs which remained unclaimed/ unpaid. There was no deposit liable to be transferred to the credit of Investors' Education and Protection Fund.

Presently the Company is neither accepting fresh deposits nor renewing the existing ones.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

In view of the permanent closure of the Manufacturing Operations, provisions relating to furnishing of the details of (i) Conservation of Energy, (ii) Research & Development and Technology Absorption and (iii) Foreign Exchange Earning and Outgo in accordance with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are not applicable.

DIRECTORS

After the last Annual General Meeting of the Company during the year there has been no change in the Board of Directors. Mr. Gaurav Sekhri, Mr. Vivek Gupta and Mrs. Aditee Modi have been appointed additional directors of the Company on 14.08.2014.

PERSONNEL

Subsequent to the closure of the Manufacturing Operations of the Company, all issues of ex-workmen/employees have been amicably resolved. The total dues of these workmen/ employees (other than 8 workmen who have not yet collected their payment) have been paid. These 8 ex-workmen/ employees had approached DRT-II, New Delhi seeking order for payment of dues in excess of the legal dues as paid to the other workmen/employees. Hon'ble DRT had directed them to approach the Labour Commissioner for adjudication of their dues. None has approached the Labour Commissioner as directed by DRT. However, as directed by DRT, the Company had deposited the amount payable to them with DRT, which in the absence of any chaim by these workmen,has been released by DRT to PNB.

There was no employee, employed for full or part of the year, whose particulars are to be given in terms of Section 217(2A)of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

AUDITORS AND AUDIT REPORT

Messrs P. R. Mehra & Co., Chartered Accountants, New Delhi, have been the statutory auditors of the Company since inception. Considering the provisons of Section 139(2) of the Companies Act, 2013 it has been thought expedient to rotate the statutoy auditors, accordingly M/s. S.R. Dinodia & Co.LLP, Chartered Accountants, New Delhi are proposed to be as appointed as Statutory Auditors of the Company for a term of five years.

With reference to the qualifications contained in the Auditors' Report, the Directors wish to state that the Notes on Accounts and Significant Accounting Policies referred to by the Auditors in their Report are self-explanatory and hence do not call for any further comment.

COST AUDIT

The Central Government had approved the appointment of Messrs N. Dewan & Co., Cost Accountants, New Delhi to conduct the Cost Audit in respect of Nylon & Polyester Filament Yarns for the year ended 31st March, 2007. However, in view of permanent closure of operations, the Company had applied for exemption from the requirement of Cost Audit. Accordingly, their re-appointment is not envisaged.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors of your Company declare as under:

(i) that in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed alongwith proper explanation relating to material departures;

(ii) that the Directors had 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 of the Company for that period;

(iii) that the Directors had 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) that in view of the permanent closure of the Manufacturing Operations of the Company, the Directors had not prepared the Annual Accounts on a going concern basis.

SUBSIDIARY COMPANIES

The Company does not have any Subsidiary Company.

CORPORATE GOVERNANCE

The Report on Corporate Governance together with the Statutory Auditors' Certificate thereon are annexed hereto and forms part of this Report. The Management Discussion and Analysis Report is annexed hereto and forms part of this Report.

ADEQUACY OF INTERNAL CONTROLS

Your Company has in place adequate internal control systems combined with delegation of powers and periodic review of the process. The control system is also supported by internal audits and management reviews with documented policies and procedures.

STATUTORY DISCLOSURES

None of the Directors are disqualified under the provisions of Section 164(2) of the Companies Act, 2013. The Directors have made the requisite disclosures, as required under the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

APPRECIATION

Your Directors would like to express their sincere appreciation to the various Departments of the Central and State Governments, UPSIDC's nominee directors and Investors for their continued valuable support and assistance. Your Directors also wish to thank all the Officers and Staff of the Company at all levels for their contribution, support and continued co-operation throughout the year.

(Manish K. Modi)

Managing Director

(M. K. Modi)

 Chairman

New Delhi

Dated:14th August,2014