Dear Members,
 
 The Directors herby present the Twentyth Annual report on the business
 and operation of the company and financial result for the year ended
 31st Mach 2011.
 
 Financial Highlights
 
 Financial                                2010-11        2009-10
 
 Turnover                          22,47,52,332.00    10,85,08,748.00
 
 Other Income                          3,29,341.00        1,46,825.00
 
 Administrative & Selling Expenses 21,92,81,918.00    10,45,96,718.00
 
 Operating surplus/deficient 
 interest & depreciation              39,54,347.00       33,74,444.00
 
 Interest                             12,59,755.00        7,06,117.00
 
 Depreciation                         26,94,592.00       26,68,327.00
 
 Profit for the year                  18,45,408.00        6,84,411.00
 
 Total deficit carried forward        87,47,155.00      1,05,24027.00
 
 OPERATIONS :
 
 The company has achieved the profit of Rs.  18,45,408.00 on overall
 turnover of Rs 22,47,52,332.00 during the year.
 
 OUTLOOK:
 
 Though the results were very encouraging with a more than 100% growth
 in the turnover and profit the outlook of the current year appeares
 bleak, mainly on account of faulty policies of the government which has
 resulted in the washing of the prices of cotton and yarn.
 
 Your Directors however will spare no efforts to mitigate the damage.
 
 DIVIDEND:
 
 In order to flow back the profit to strengthen the company, your
 director are not recommending any dividend for the year
 
 In view of the accumulated losses of Rs 87,47,155.00 Lakhs, your
 directors regret their inability to declare any dividend for the year.
 
 FUTURE:
 
 Your company is constantly striving hard to achieve better results and
 to economize the cost of operations by adopting strategies like
 procurement of raw materials at the appropriate time.  Implementation
 of cost reduction measures in all points of operations. Like power
 utility, checking.  Pilferages and better utilization of available
 business resources.
 
 For the coming cotton season, the cotton crop will be higher by 10%,due
 to export of Raw cotton and the declaining carry forward stock in India
 and in the world. Market will hold the cotton Prices at the higher
 levels. This would definitely result in increased volume of business
 and better earrings in the year to come.
 
 DIRECTORS RESPONSIBILITY STATEMENT:
 
 Pursuant to the requirement under section 217(2AA) of the companies
 Act, 1956 with respect to Director''s responsibility statement, it is
 here by confirmed that
 
 1.  In preparation of annual accounts for the financial year ended
 31-3-2011 the applicable accounting standards had been followed along
 with proper explanation relating to material departures.
 
 2.  We 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 for the year under review.
 
 3.  We have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of the
 companies Act for safeguarding the assets of the company and for
 preventing and detecting fraud and other irregularities.
 
 4.  We have prepared the accounts for the financial year ended
 31.3.2011 on a ''going concern'' basis.
 
 DIRECTORS
 
 There was change in the constitutions of the directors during the year.
 
 AUDITORS:
 
 To appoint auditors to hold the office from the conclusion of the
 Annual General Meeting to the next annual general meeting
 
 LISTING:
 
 The share of the company continues to be listed at Bangalore Stock
 Exchange Limited and the Stock Exchange Mumbai. Listing fee for the
 year 2010-2011 have been paid to Mumbai Stock Exchange.
 
 CORPORATE GOVERNANCE:
 
 The report on corporate governance is annexed to this report.
 
 PARTICULARS UNDER SECTION 217 (2A) & (1) (E) OF THE COMPANIES ACT 1956.
 
 A) Particulars of employees drawing remuneration is excess of the
 limits prescribed under section 217(2A) of the companies Act 1956:- Nil
 
 B) Foreign exchange earnings and outgo:
 
 There have been no foreign Exchange earnings and out go during the year
 
 C) Conservation of energy:
 
 Disclosure in respect of conservation of energy in Form A is annexed
 
 D) Technology absorption during the year-Nil
 
 ACKNOWLEDGEMENTS
 
 The directors gratefully acknowledge the co-operation, assistance and
 support extended by the Central Government, Government of Karnataka,
 the Financial Institution like State Bank of Mysore .Company Bankers,
 the shareholders, and dealers. The directors also wish to place on
 record their appreciation of the contribution made by employees at all
 levels.
 
                                           By order of the Board
 
 Place : Chitradurga                              K.V. PRABHAKAR
 
 Date  : 25-08-2010                            Managing Director