Directors Report of Vanasthali Textile Industries Ltd.

Mar 31, 2013

Dear Members,

The Directors are pleased to present the Twenty Second Annual Report along with the Audited statement of Accounts for the financial year ended 31st March, 2013.

1. FINANCIAL RESULTS

Your Company''s financial performance during the financial year 2012-2013 is summarized below :-



(Rs. In Lacs

Particulars For the year For the year ended 31.03.13 ended 31.03.12

Sales (Gross) 1240.35 1469.26

Profit/(loss) before depreciation, Interest & Tax (PBIT) (242.51) 223.17

Less: Interest 1332.35 764.85

Depreciation 531.72 563.33

Profit/(Loss) before Tax (PBT) from Ordinary Activities (2106.58) (1551.35)

Extraordinary Income - 1336.30

Net Profit/(Loss) before Tax (PBT) (2106.58) (2887.66)

Provision for Tax :

Current- -

Previous Year- - -

Deferred- - -

Prof it/(Loss) after Tax (2106.58) (2887.66)

Add: Profit for the earlier years -

Profit/(Loss) available for appropriations (2106.58) (2887.66)

Less: Prior Period Expenses (2106.58) (2887.66)

Less: Depreciation for Prior Period - -

Proposed Dividend - -

Add: Transfer from General Reserve - -

Balance carried to Balance Sheet (2106.58) (2887.66)



2. REVIEW OF OPERATIONS

The year under review (i.e 2012-2013) has not been good like some past years solely due to financial constraints which your company is facing acutely and trying hard to overcome the situation also adding to problems is fluctuation of yarn and cotton prices and as a result highly volatile International Markets due to which profit margins and operating income of the Company continuously suffered a set back. The Management along with M/s. Niki International Inc. strived hard to resolve all the pending issues relating to funding but markets did not improve in last whole year. But in spite of all this facts, the losses of the company decreased to some extent, that can be considered in a positive way.

As of result of above, the Company could not get better realization of its products resulting in a net loss of Rs.2106.58 Lacs as compared to 2887.66 lacs in the previous year though company has made some advancement as compared to last year but due to, falling demand and prices in the international market, global meltdown, and increase in the price of yarn (the Company''s major raw material). The turnover of the Company during the year stands at 1240.35 lacs as compared to 1469.26 lacs in the previous year which is decreased by15.58% approximately.

3. DIVIDEND

Your directors are unable to recommend any dividend for the year ended 31st March, 2013.

4. FUTURE PROSPECTS

The long-term outlook for terry towel market has always been encouraging but the financial pressure and other constraints never allowed company to capitalize it. The Company continued its emphasis on retaining its customers, realizing from debtors, including Product and market development. Its no doubt that your company''s product quality is well established and accepted in the international market despite all these hurdles.

The Management is making all the efforts to eliminate liquidity crunch and sustain the production focusing and in talks with financial institutions so that this situation can be successfully sailed through.

5. SUBSIDIARY OF THE COMPANY

The Company has one wholly owned subsidiary Company called V D R Leasing and Credit Company Private Limited. In compliance with the applicable provisions with the Companies Act, 1956, and Listing Agreement Directors'' Report, Auditors'' Report etc of our subsidiary company along with Consolidated Audited Statements of Accounts is attached with the balance sheet of a holding Company.

6. CONSOLIDATED AUDITED ACCOUNTS

We believe that the Consolidated Audited Statements of Accounts present a more comprehensive picture rather than the standalone Audited Accounts. The Consolidated loss after tax of the Company and is Subsidiary is Rs. 2106.61 Lakhs during the year.

7. INDUSTRIAL RELATIONS

Cordial and harmonious industrial relations prevailed throughout the year.

8. INSURANCE

The properties and insurable interest of the company, like building, plant & machinery, stocks, etc. are properly insured.

9. CORPORATE GOVERNANCE

The Company is strongly committed towards its philosophy of good Corporate Governance. The endeavor of your Company is not only to comply with regulatory requirements but also to practice Corporate Governance principles that lay a strong emphasis on integrity transparency and overall accountability. A separate Section on Management Discussion & Analysis and Corporate Governance along with certificate on its Compliance from Company Secretary in Practice is enclosed with this Annual Report.

10. GREEN INITIATIVE

As pursuant to the circular no. 2/2011 dated 8th February, 2011 of the Ministry of Corporate Affairs, Government of India, we are adopting the green initiative option as being the responsible organization we are committed to reduce harmful impact of using more paper on the environment. Towards this end our management has taken the decision that our printed copy of the Annual Report to shareholders would not contain Balance Sheet, Profit & Loss Account of V D R Leasing and Credit Private Limited.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of board of directors) Rules, 1988, relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed to this report.

12. PARTICULARS OF EMPLOYEES

There is no employee whose particulars are required to be furnished in the Sec. 217(2A) of the Companies Act, 1956 and rules made there under.

13. DIRECTORS'' RESPONSIBLITY STATEMENT AS PER SECTION 217 (2AA) OF COMPANIES ACT, 1956

Pursuant to the requirements of Section 217 (2AA) of theCompanies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts for the financial year ended 31st March 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 loss for the year under review;

(iii) That the directors have 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 the directors have prepared the accounts for the financial year ended 31st March 2013 on a going concern basis.

14. DIRECTORS

During the Year under review, the board of Directors appointed at their meeting, Mr. Nikhil Poddar on 14/08/2013 w.e.f 01/08/2012 as Managing Director of the company, Subject to approval in ensuing AGM and by Central Government, Mr. Pannalal Goswami as Director w.e.f 14/08/2013. Mr. B.R. Mahi nomination was withdrawn by IDBI bank w.e.f 28/05/2012, Mr. S.C. Arya Resigned from the Directorship from 20/04/2013 Mr.Rajesh Swamp''s Nomination has been withdrawn by IDBI w.e.f 14/08/2013.

Mr. David Soans, who retires by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for reappointment. The Board places on records its sincere appreciation for the valuable contributions rendered by Mr.B.R.Mahi, Mr. S.C.Arya, and Mr. Rajesh Swarup during their association with the Company.

In Terms of section 260 of the Companies Act, 1956 Mr.Pannalal Goswami shall hold office only upto the date of the ensuing Annual general Meeting. The company has received a notice in writing along with requisite deposit, from a member proposing his candidature for the office of Director liable to retire by rotation.

15. AUDITORS

M/s Jain Raj & Associates.Chartered Accountant, appointed in AGM held on 29-09-2012, hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

16. AUDITORS'' REPORT

The Auditors'' Report is enclosed with the Accounts for the year ended March 31, 2013. There is no adverse qualification(s), and remarks in the audit report except some observations as subject to

1) Short contribution of Gratuity and non provision of leave encashment.

2) Non Confirmation of some balances and recoverable advances & loan facility with suppliers, creditors, customers and Banks respectively.

3) Reference to BIFR, accounts being prepared on Going concern basis and no adjustments are required to the carrying amount of fixed assets on account of impairment as required by AS-28, Auditor express its inability to express their opinion on these matters.

4) Default of interest on term loan, TUF Subsidy has not been provided, The accumulated balance is Rs. 316.44 lacs is shown as recoverable under the loans and advances.

The Auditors'' Report being self explanatory does not require further comment thereon.

16A- COST AUDITOR REPORT

As per the Section 233B of the Companies act, 1956 and Circular issued by the Ministry of corporate affairs, cost audit branch in the month of June, 2011 and subsequent revisions such as in month of November 2011 and further cost audit is applicable on your company and the cost audit was conducted by Niraj Kumar Vishwakarma & Associates, cost accountants, there is no Adverse qualification(s) in the audit report, the auditor''s report being self explanatory does not require any further comment.

17. Clarification on Auditor''s Qualifications.

Your Directors being committed to the principles of Corporate Governance are very much concerned about the auditor''s report and the justifications about the auditor''s findings is as Follows.

1. As you are well aware that your company is facing acute financial crisis and struggling hard to cope up with the demanding situation the statutory obligations also feel the heat of same and sometimes, we despite our best efforts fail to make payments on time, though we acknowledge these are financial obligations and will be regularized as soon as possible.

2. The Situation is same here as well due to financial crunch we fail to make payment on time to our creditors and they in turn did not provide us any confirmation, banks also not responding to our demands as we are failing to make interest payment to them on time.

3. As highlighted earlier matter is sub-judice and as soon as company receives probably favorable order from BIFR, we all hopes that old glorious days will come back.

4. TUF is the scheme under which we are entitled for subsidy but as you are aware that we are facing challenges from everywhere, Availing this facility totally depends upon making interest payment which in current scenario company can not do.

So, availing this facility also has become an challenge for us but we were and are making the provisions as whenever in future we get into position to pay our interest obligation and will claim this subsidy from govt.

18. FIXED DEPOSITS

During the year under review, your company has not accepted any fixed deposit within the meaning of Section 58A of the Companies Act, 1956 and the rules made thereto

19. EROSION OF NET WORTH - REFERENCE TO BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR).

On account of losses incurred during the year under review and also with carried forward losses of past years, the entire net worth of the company has got eroded at the end of the financial year which ended on 31st March, 2011 mentioned in the previous annual report, In the Board of directors meeting held on 24th August 2011 the directors formed an opinion to refer the company to BIFR and on 26-09-2011 the company made a reference u/s 15(1) of sick industrial companies (Spl. Provisions act, 1985).

The Matter is Undergoing with BIFR from then, and also with AAIFR and matter is sub-judice.

ACKNOWLEDGEMENT

Your Directors wish to place on record sincere gratitude for the co-operation and assistance extended by the Government authorities, Financial Institutions, Banks, Suppliers, Agents and Buyers. Your Directors also wish to acknowledge with thanks all stakeholders for their valuable sustained support and encouragement. The Directors wish to place on record their deep sense of appreciation for the commitment and dedication of employees at all levels.



For and on behalf of the Board



Sd/- Sd/-

Date: 14/08/2013 (Nikhil Poddar) (David Soans)

Place: Delhi Chairman and MD Director

(Via Video Conferencing) (Via Video Conferencing)

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Mar 31, 2012

Dear Members,

The Directors are pleased to present the Twenty First Annual Report along with the Audited statement of Accounts for the financial year ended 31st March, 2012.

I.FINANCIAL RESULTS

Your Company's financial performance during the financial year 2011-2012 is summarized below: -

(Rs. In Lacs)

Particulars For the year. For the year ended 31.03.12 ended 31.03.11

Sales (Gross) 1469.26 8324.02

Profit/(loss) before depreciation, Interest & Tax (PBIT) (223.17) 1140.67

Less: Interest 764.85 611.56

Depreciation 563.33 656.80

Profit/(Loss) before Tax (PBT) from Ordinary

Activities (1551.35) -

Extraordinary Income (1336.30) -

Net Profit/(Loss) before Tax (PBT) (2887.66) (127.69)

Provision for Tax:

Current- - -

Previous Year- - -

Deferred-

Profit/(Loss) after Tax (2887.66) (127.69)

Add: Profit for the earlier years (2098.37) (1970.68)

Profit/(Loss) available for appropriations -

Less: Prior Period Expenses (2098.37)

Less: Depreciation for Prior Period

Proposed Dividend - -

Add: Transfer from General Reserve Balance carried to Balance Sheet (4986.03) (2098.37)

2. REVIEW OF OPERATIONS

The year under review has not been good due to fluctuation of yarn and cotton prices and highly volatile International market, which resulted into lower profit margins and operating income of the Company. The Management strived hard to resolve all the pending issues but markets did not improve in last year. The Loss of the Company therefore increased contrary to the transformation promised by the management last year

The Company could not get better realization of its products resulting in a net loss of Rs.2887.66 Lacs as compared to 127.69 Lacs in the previous year due to falling demand and prices in the international market, global meltdown, and increase in the price of yarn (the Company's major raw material). The turnover of the Company during the year stands at 1469.26 lacs as compared to 8324.02 lacs in the previous year.

3. DIVIDEND

Your directors are unable to recommend any dividend for the year ended 31st March, 2012.

4. FUTURE PROSPECTS

The long-term outlook for terry towel is encouraging. The Company continued its emphasis on technology up gradation, modernization, and Product and market development. Its quality is well established and accepted in the international market.

Consequent upon Change in Management, the prospects of the company will be good as the new management having rich experience in marketing of the products which is the biggest challenge as of now due to global meltdown resulting in shrinking of markets all over the world.

The Company is focusing on Value added products such as embroidered terry towels, micro-cotton towels, tufted towels etc.

5. SUBSIDIARY OF THE COMPANY

The Company has one wholly owned subsidiary Company called V D R Leasing and Credit Company Private Limited. In compliance with the applicable provisions with the Companies Act, 1956, and Listing Agreement, a copy of Balance Sheet, Profit and Loss Account, Directors' Report, Auditors' Report etc of our subsidiary company along with Consolidated Audited Statements of Accounts is attached with the balance sheet of a holding Company.

6. CONSOLIDATED AUDITED ACCOUNTS

We believe that the Consolidated Audited Statements of Accounts present a more comprehensive picture rather than the standalone Audited Accounts. The Consolidated loss after tax of the Company and is Subsidiary is Rs.2887.86 Lakhs during the year.

7. INDUSTRIAL RELATIONS

Cordial and harmonious industrial relations prevailed throughout the year.

8. INSURANCE

The properties and insurable interest of the company, like building, plant & machinery, stocks, etc. are properly insured.

9. CORPORATE GOVERNANCE

The Company is strongly committed towards its philosophy of good Corporate Governance. The endeavor of your Com- pany is not only to comply with regulatory requirements but also to practice Corporate Governance principles that laya strong emphasis on integrity transparency and overall accountability. A separate Section on Management'Discussion & Analysis and Corporate Governance along with certificate on its Compliance from Company Secretary in Practice is enclosed with this Annual Report.

10. GREEN INITIATIVE

As pursuant to the circular no. 2/2011 dated 8th February, 2011 of the Ministry of Corporate Affairs, Government of India, we are adopting the green initiative option as being the responsible organization we are committed to reduce harmful impact of using more paper on the environment. Towards this end our management has taken the decision that our printed copy of the Annual Report to shareholders would not contain Balance Sheet, Profit & Loss Account and Auditors Report of V D R Leasing and Credit Private Limited. '

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARN- INGS AND OUTGO

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of board of directors) Rules, 1938, relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed to this report.

12. PARTICULARS OF EMPLOYEES

There is no employee whose particulars are required to be furnished in the Sec. 217(2A) of the Companies Act, 1956 and rules made there under.

13. DIRECTORS' RESPONSIBLITY STATEMENT AS PER SECTION 217 (2AA) OF COMPANIES ACT, 1956

Pursuant to the requirements of Section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts for the financial year ended 31st March 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;.

(ii) That the directors have selected such accounting policies and applied them consistently and made udgments and estimates that were 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 loss for the year under review;

(iii) That the directors have 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 the directors have prepared the accounts for the financial year ended 31st' March 2012 on a going concern basis.

14. DIRECTORS

Mr. David Soans, who retires by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for reappointment.

The Board places on records its sincere appreciation for the valuable contributions rendered by Mr. Abhinay Rathi and Mr. S. K. Sharma during their association with the Company.

15. AUDITORS

M/s Jain Raj & Associates, Chartered Accountant, appointed in EGM held on 12-03-2012 is to be confirmed in the AGM and being eligible, offer them for re-appointment.

16. AUDITORS'REPORT

The Auditors' Report is enclosed with the Accounts for the year ended March 31, 2012. There is following qualification(s).

1) Non-Provision of leave encashment

2) Reference to BIFR

3) Recognition of subsidiary under TUF for Rs 124.65 lacs for the year & accumulated balances of Rs 316.44lacs, in spite of default in payment of interest to banks.

17. FIXED DEPOSITS

During the year under review, your company has not accepted any fixed deposit within the meaning of Section 58A of the Companies Act, 1956 and the rules made thereto.

ACKNOWLEDGEMENT

Your Directors wish to place on record sincere gratitude for the co-operation and assistance extended by the Government authorities, Financial Institutions, Banks, Suppliers, Agents and Buyers. Your Directors also wish to acknowledge with thanks all stakeholders for their valuable sustained support and encouragement. The Directors wish to place on record their deep sense of appreciation for the commitment and dedication of employees at all levels.

For and on behalf of the Board

(Nikhil Poddar) (S.C. ARYA)

Chairman and MD Director

Date: 03/09/2012

Place: Delhi

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Mar 31, 2011

Dear Members,

The Directors are pleased to present the Twentieth Annual Report along with the Audited statement of Accounts for the financial year ended 31st March, 2011.

I.FINANCIAL RESULTS

Your Company's financial performance during the financial year 2010-2011 is summarized below: -

(Rs. In Lacs)

For the year For the year

Particulars ended 31.03.11 ended 31.03.10

Sales (Gross) 8324.02 8699.60

Profit/(loss) before depreciation, Interest & Tax (PBIT) 1140.67 497.88

Less: Interest 611.56 656.24

Depreciation 656.80 726.76

Profit/(Loss) before Tax (PBT) from Ordinary Activities (885.12)

Extraordinary Income 483.87 883.37

Net Profit/(Loss) before Tax (PBT) (127.69) (1.75)

Provision for Tax :

Current-

Previous Year-

Deferred-

Profit/(Loss) after Tax (127.69) (1.75)

Add: Profit for the earlier years (1970.68) (1,968.93)

Profit/(Loss) available for appropriations (2098.37) (1,970.68)

Less: Prior Period Expenses

Less: Depreciation for Prior Period

Proposed Dividend

Add: Transfer from General Reserve

Balance carried to Balance Sheet (2098.37) (1,970.68)

2. REVIEW OF OPERATIONS -

The year under review has not been good due to fluctuation of yarn and cotton prices and as a result highly volatile International Markets due to which profit margins and operating income of the Company Suffered a set back. The Management along with M/s. Niki International Inc. strived hard to resolve all the pending issues relating to funding but markets did not improve in last whole year. The Losses of the Company therefore increased contrary to the transformation promised by the Company last year

As of result of above, the Company could not get better realization of its products resulting in a net loss of Rs. 127.69 Lacs as against Rs. 1.75 Lacs in the previous year due to, falling demand and prices in the international market, global meltdown, and increase in the price of yarn (the Company's major raw material). The turnover of the Company during the year stands at Rs. 8324.02 Lacs as against Rs. 8699.60 Lacs in the previous year which is decreased by 4.32% approximately.

3. DIVIDEND

Your directors are unable to recommend any dividend for the year ended 31st March, 2011.

4.FUTURE PROSPECTS

The long-term outlook for terry towel is encouraging. The Company continued its emphasis on technology up gradation, modernization, product and market development. Its quality is well established and accepted in the international market.

Consequent upon Change in Management, the prospects of the company will be good as the new management having rich experience in marketing of the products which is the biggest challenge as of now due to global meltdown resulting in shrinking of markets all over the world.

The Company is focusing on Value added products such as embroidered terry towels, micro-cotton towels, tufted towels etc.

5. SUBSIDIARY OF THE COMPANY

The Company has one wholly owned subsidiary Company called V D R Leasing and Credit Company Private Limited. In compliance with the applicable provisions with the Companies Act, 1956, and Listing Agreement, a copy of Balance Sheet, Profit and Loss Account, Directors' Report, Auditors' Report etc of our subsidiary company along with Consolidated Audited Statements of Accounts is attached with the balance sheet of a holding Company.

6. CONSOLIDATED AUDITED ACCOUNTS

We believe that the Consolidated Audited Statements of Accounts present a more comprehensive picture rather than the standalone Audited Accounts. The Consolidated loss after tax of the Company and is Subsidiary is Rs. 127.44 Lacs during the year.

7. INDUSTRIAL RELATIONS

Cordial and harmonious industrial relations prevailed throughout the year, which contributed towards good performance in all areas of the business of the Company.

8. INSURANCE

The properties and insurable interest of the company, like building, plant & machinery, stocks, etc. are properly insured.

9. CORPORATE GOVERNANCE

The Company is strongly committed towards its philosophy of good Corporate Governance. The endeavor of your Company is not only to comply with regulatory requirements but also to practice Corporate Governance principles that lay a strong emphasis on integrity transparency and overall accountability.

A separate Section on Management Discussion & Analysis and Corporate Governance along with certificate on its Compliance from Company Secretary in Practice is enclosed with this Annual Report.

10. GREEN INITIATIVE

As pursuant to the circular no. 2/2011 dated 8th February, 2011 of the Ministry of Corporate Affairs, Government of India ,we are adopting the green initiative option as being the responsible organization we are committed to reduce harmful impact of using more paper on the environment. Towards this end our management has taken the decision that our printed copy of the Annual Report to shareholders would not contain Balance Sheet, Profit & Loss Account and Auditors Report of V D R Leasing and Credit Private Limited.

Accordingly, the Annual Report for the year ended March 31, 2011, contains only those details that are statutorily required to be published in the Annual Report along with Abridged Standalone Financial Statements prepared in compliance with Section 219 of the Companies Act, 1956. Additional details are available on our websie,WWW.Vtiltowels.Com

Pursuant to circular no. 2/2011 dated 8th February, 2011 of the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit & Loss Account and other documents of the subsidiary companies are not required to be attached with the Balance Sheet of the Company. The annual accounts of the subsidiary companies and the related detailed information will be made available upon request by the members of the Company and of its subsidiary companies. These documents will be available for inspection by any member at the Registered/Corporate Office/Corporate Affairs department of the Company and also at the Registered Offices of the subsidiary companies concerned.

11. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARN- INGS AND OUTGO

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of board of directors) Rules, 1988, relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed to this report.

12. PARTICULARS OF EMPLOYEES

There is no employee whose particulars are required to be furnished in the Sec. 217(2A) of the Companies Act, 1956 and rules made there under.

13.DIRECTORS' RESPONSIBLITY STATEMENT AS PER SECTION 217 (2AA) OF COMPANIES ACT. 1956

Pursuant to the requirements of Section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts for the financial year ended 31st March 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 loss for the year under review;

(iii) That the directors have 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 the directors have prepared the accounts for the financial year ended 31st March 2011 on a going concern basis.

14.DIRECTORS

During the year under review, Mr. B.P.Saxena has resigned w.e.f 13/08/2010.

Mr. Abhinay Rathi, who retires by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for reappointment.

The Board places on records its sincere appreciation for the valuable contributions rendered by Mr. B.P.Saxena during their association with the Company.

15. AUDITORS

M/s Rakesh Raj & Associates, Chartered Accountant, hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

16. AUDITORS'REPORT

The Auditors' Report is enclosed with the Accounts for the year ended March 31, 2011. There is no adverse qualification(s), and remarks in the audit report except some observations. The Auditors' Report being self explanatory does not require further comment thereon.

17. FIXED DEPOSITS

During the year under review, your company has not accepted any fixed deposit within the meaning of Section 58A of the Companies Act, 1956 and the rules made thereto.

ACKNOWLEDGEMENT

Your Directors wish to place on record sincere gratitude for the co-operation and assistance extended by the Government authorities, Financial Institutions, Banks, Suppliers, Agents and Buyers. Your Directors also wish to acknowledge with thanks all stakeholders for their valuable sustained support and encouragement. The Directors wish to place on record their deep sense of appreciation for the commitment and dedication of employees at all levels.

For and on behalf of the Board.

(DavidSoans) (Abhinay Rathi) Director Director Chairman of the Meeting

Date: 24th, August 2011.

Place: Delhi.

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Mar 31, 2010

The Directors are pleased to present the Nineteenth Annual Report along with the Audited statement of Accounts for the financial year ended 31st March, 2010.

FINANCIAL RESULTS

Your Companys financial performance during the financial year 2009-2010 is summarized below: -



(Rs. in lacs)

Particulars For the For the

Year Year

Ended Ended

31.3.10 31.3.09

Sales (Gross) 8699.60 5043.44

Profitless) before depreciation, Interest & Tax (PBIT) 497.88 (624.41)

Less: Interest 656.24 819.56

Depreciation 726.76 814.41

Profit/(Loss) before Tax (PBT)

from Ordinary Activities (885.12) (2258.39)

Extraordinary Income 883.37 -

Net Profit/(Loss) before

Tax (PBT) (1.75) (2258.39)

Provision for Tax :

Current- - 7.00

Previous Year- - (1.52)

Deferred- - (368.24)

Profit/(Loss) after Tax (1.75) (1895.62)

Add: Profit for the earlier years (1,968.93) (96.40) Profit/(Loss) available

for appropriations (1,970.68) (1992.02)

Less: Prior Period Expenses Less: Depreciation for Prior Period Proposed Dividend Add: Transfer from

General Reserve - 23.09

Balance carried to Balance Sheet (1,970.68) (1968.93)



OPERATIONS

The year under review was a transformational year for the Company. During the year, consequent to change in management, the Company has joined hands with M/s. Niki International Inc., an importers and wholesalers of Home textiles in USA, due to which the Company has been able to better market and sell its products all over the world.

As of result of above, the Company has got better realization of its products resulting in a net loss of Rs. 1.75 Lacs as against Rs. 1895.62 Lacs in the previous year

despite of, falling demand and prices in the international market, global meltdown, and increase in the price of yarn (the Companys major raw material). The turnover of the Company during the year stands at Rs. 8699.60 Lacs as against Rs. 5043.44 Lacs in the previous which is increased by 72.49% approximately.

DIVIDEND

Your directors are unable to recommend any dividend for the year ended 31st March, 2010.

FUTURE PROSPECTS

The long-term outlook for terry towel is encouraging. The Company continued its emphasis on technology upgradation, modernization, product and market development. Its quality is well established and accepted in the international market.

Consequent upon Change in Management, the prospects of the company will be good as the new management having rich experience in marketing of the products which is the biggest challenge as of now due to global meltdown resulting in shrinking of markets all over the world.

The Company is focusing on Value added products such as embroidered terry towels, micro-cotton towels, tufted towels etc.

SUBSIDIARY OF THE COMPANY

The Company has one wholly owned subsidiary Company called V D R Leasing and Credit Company Private Limited. In compliance with the applicable provisions with the Companies Act, 1956, and Listing Agreement, a copy of Balance Sheet, Profit and Loss Account, Directors Report, Auditors Report etc. of our subsidiary company along with Consolidated Audited Statements of Accounts is attached with the balance sheet of a holding Company.

FIXED DEPOSITS

During the year under review, your company has not accepted any fixed deposit within the meaning of Section 58A of the Companies Act, 1956 and the rules made thereto.

INDUSTRIAL RELATIONS

Cordial and harmonious industrial relations prevailed throughout the year, which contributed towards good performance in all areas of the business of the Company.

INSURANCE

The properties and insurable interest of the company, like building, plant & machinery, stocks, etc. are properly insured.

DIRECTORS

During the year under review, the Board of Directors appointed at their meeting, Mr. Nikhil Poddar on 30th July, 2010 as Managing Director, Mr. R. D. Gupta as Whole Time Director on 31st October, 2009, Mr. B. P. Saxena as Whole Time Director on 7th November, 2009, and Mr. Abhinay Rathi as an Additional Director on 12th August, 2010, of the Company.

Mr. Harivats Sharaff has resigned from the Directorship of the Company w.e.f. 30th July, 2010, Mr. Yogesh Gupta who was acting as an Independent director on the Board of the Company has ceased to be associated with the Company w.e.f. 8th May, 2010 and Mr. R. D. Gupta has ceased to be associated with the Company w.e.f. 11th June, 2010.

Mr. David Soans, who retires by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for reappointment.

The Board places on records its sincere appreciation for the valuable contributions rendered by Mr. Harivats Sharaff, Mr. Yogesh Gupta, and Mr. R. D. Gupta during their association with the Company.

In terms of Section 260 of the Companies Act, 1956, Mr. Abinay Rathi shall hold office only upto the date of the ensuing Annual General Meeting. The Company has received a notice in writing along with requisite deposit, from a member proposing his candidature for the office of Director liable to retire by rotation.

DIRECTORS RESPONSIBLE STATEMENT AS PER SECTION 217 (2AA) OF COMPANIES ACT, 1956

Pursuant to the requirements of Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

(I) that in the preparation of the annual accounts for the financial year ended 31st March 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the directors have 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 the affairs of the Company at the end of the financial year and of the loss for the year under review;

(iii) that the directors have 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 the directors have prepared the accounts for the financial year ended 31st March, 2010, on a going concern basis.

PARTICULARS OF EMPLOYEES

There is no employee whose particulars are required to be furnished in the Sec. 217(2A) of the Companies Act, 1956 and rules made thereunder.

CORPORATE GOVERNANCE

The Company is strongly committed towards its philosophy of good Corporate Governance. The endeavor of your Company is not only to comply with regulatory requirements but also to practice Corporate Governance principles that lay a strong emphasis on integrity, transparency and overall accountability. A separate Section on Management Discussion & Analysis and Corporate Governance alongwith certificate on its Compliance from M/s. Rakesh Raj & Associates, Chartered Accountants is enclosed with this Annual Report.

AUDITORS

M/s. Rakesh Raj & Associates, Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

AUDITORS REPORT

The Auditors Report is enclosed with the Accounts for the year ended March 31, 2010. There is no adverse qualification(s), and remarks in the audit report. The Auditors Report being self explanatory does not require further comment thereon.

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

Information pursuant to Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of board of directors) Rules, 1988, relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed to this report.

ACKNOWLEDGEMENT

Your Directors wish to place on record sincere gratitude for the co-operation and assistance extended by the Government authorities, Financial Institutions, Banks, Suppliers, Agents and Buyers. Your Directors also wish to acknowledge with thanks all stakeholders for their valuable sustained support and encouragement. The Directors wish to place on record their deep sense of appreciation for the commitment and dedication of employees at all levels.



For and on behalf of the Board



David Soans (Abhinay Rathi)

Chairman of the Meeting Director

Date : 12.08.2010

Place: Gurgaon