MANAGEMENT DISCUSSION AND ANALYSIS

OPERATIONS:

The Turnover and other income for the current year was Rs.27.46 Lacs as against Rs.35.77 Lacs in the brvious year. The company has incurred a net Loss of Rs.27.66 Lac as against net Loss of Rs.42.45 Lacs in the brvious year. The company is continuing its production on job work basis.

REFERENCE TO BIFR:

Your Board is pleased to report that the Hon'ble Bench of the BIFR passed on Order on March, 2012 approving a scheme of rehabilitation of the Company, referred to therein as the Sanctioned Scheme (SS-12). The principal provisions in the SS and the action taken so far by the Board are as under:

(A)Restructuring & Reduction of Share Capital

The Shareholders have approved the derating of the Shares. The procedural compliances with Bombay Stock Exchange, NSDL & CDSL are under process in this regard.

(B) Settlement of Dues of the Secured Creditors

All the secured creditors of Company viz. UBI and IDBl Bank stand paid-off as on March 31, 2013 under a one-time settlement

(C) Infusion of Fresh Funds

Promoters have brought Rs. 116.50 lacs by way of Share Application money which is pending for allotment of equity Shares at par as envisaged in SS-12 by the BIFR.

(D) Settlement of Unpaid Bills

The company was to settle the contingent liability of Rs. 24.47 lakh to Union Bank of India on account of acceptance of bills drawn by Orbit Polyesters Limited, at Rs. 2.00 lacs. However UBI has agreed to settle unpaid Bills at Rs.5.00 and the proceedure for the same is going on.

Union Bank of India will release all securities including personal/corporate guarantees / undertaking and indemnity given by the existing promoters / directors given to the Bank.

(E) Settlement of Dues towards CRB Capitals Ltd.- Leased Assets

The Official Liquidators had accepted on behalf of CRB Capitals Ltd. an amount of Rs 2 lacs as full and final settlement against entire dues of CRB Capitals Ltd. As envisaged in Sanctioned Scheme (SS-12) by BIFR..

(F) Dues to Unsecured Creditors

Unsecured Creditors have been settled for Rs. 27.13 lacs towards their dues of Rs. 271.35 lakh i.e. in 10% of principal amount.

(G) Other Reliefs & Concessions

Reliefs and concessions from Income Tax Authorities, SEBI, BSE and Stock Exchanges of Calcutta, Delhi, Chennai & Cochin , State Government of Gujarat, Gujarat State Electricity Board as detailed in the SS-12 are in the process of being sought/availed.

Management Discussion and analysis :-

a) Review of Operations

The Company's promoters have infused the funds and settled and finalized the dues of all the secured lenders as envisaged in the SS-12.

The Company is yet to resume the manufacturing operations as envisaged in the scheme without this the Company has incurred the losses.

The Company's Sales including job charges receipts during the year under review was Rs.27.46 Lacs as against Rs.35.77 Lacs in the brvious year.

b) Industry structure and Developments

The Company falls in the Textile Sector, which is one of the largest Industrial Sector in India employing the largest number of employees in the Manufacturing sector in India. It is also growing at a faster pace with the growth of population and increase in per capita income. This Sector is dominated by the unorganized sector so the growth potentials are very high.

c) Risk and Concerns

Presently the Company is doing job work only, therefore, it does not have much risk and concern for the fluctuation in the Yam price, which now fluctuates with the change in International prices. There is no risk on the Marketing front. However Company may have to face risk in case it is unable to renew the Job work order or br-mature-termination of the same.