The Directors are pleased to present their Forty Ninth Annual Report
 on the business and operations of the Company and the financial results
 for the year ended 31st March 2012.
 
 Financial results                           (Rs. in lacs) 
 
 
                                   2011-2012            2010-2011
 
 Gross profit before 
 finance costs, 
 depreciation,
 amortisation 
 expense & tax                      9,248.27             9,706.56
 
 Less : Finance costs      2,980.96            2,326.41
 
 : Depreciation and 
 amortisation expense      2,456.51 5,437.47   2,292.45  4,618.86
 
 Profit before 
 prior year adjustment              3,810.80             5,087.70
 
 Prior year adjustment
 (Net)                                    -                111.93
 
 Profit before tax 
 for the year                       3,810.80             4,975.77
 
 LESS : Provision for 
 income tax for the year              850.00             1,025.00
 
 LESS : Deferred tax 
 liability                            130.25               470.16
 
 Profit after tax                   2,830.55             3,480.61
 
 ADD : Profit brought
 forward from last year             3,525.11               955.64
 
                                    6.355.66             4,436.25
 
 Interim dividend on 
 equity share capital                    -                 133.62
 
 Dividend on Preference 
 share capital                          0.49                 0.67
 
 Dividend on Equity 
 share capital                        363.06               200.43
 
 Corporate dividend tax                58.97                54.82
 
 Transferred to general reserve       300.00               400.00
 
 Preference capital 
 redemption reserve                      -                 121.60
 
 Profit transferred to
 balance sheet                      5,633.14             3,525.11
 
                                    6.355.66             4,436.25
 
 NOTE: Figures are regrouped based on Revised Schedule VI requirements.
 
 Operations
 
 The gross revenue of the Company at Rs. 678.43 crores for the year ended
 31st March 2012 has registered an increase of 10.73% over the previous
 year. However, the profit after tax (PAT) at Rs. 28.31 crores shows a
 decline of around 18.70%.  There is overall increase in production with
 the yarn production showing a growth of around 15% though denim has
 shown a marginal decline of 2%. The yarn production would have been
 higher but for the frequent power cuts and shutdowns in this spinning
 division at Amanagallu. The production in denim is slightly low on
 account of the loss of production time during installation of new
 looms. The profit before finance costs, depreciation, amortisation &
 tax at Rs. 92.48 crores is down by 4.72% compared with the previous year.
 The profits are lower mainly on account of reduced margins due to the
 increased raw material prices.  The cost of cotton in the spinning
 division has been higher by around 23% and in denim division by around
 19%. The cost of PSF has also been high at around 16%. The year has
 also seen a highly volatile situation in cotton prices inflicting
 severe losses on the industry. The sales realisation has however been
 marginally higher at around 4% in the spinning division and the export
 realisation of yarn has in fact been lower due to restrictions in yarn
 exports during part of the year. The sales realisation in denim has
 been better than last year, although during the year itself the average
 realisation declined towards the end of the year. In denim exports,
 though the average realisation is higher, volume declined steeply on
 account of intense competition from other countries. The power cost was
 higher during the year together with power cuts in the spinning
 division leading to higher cost of production. The industry was also
 badly affected by the steep increases in the cost of finance during the
 year.
 
 However, you will be pleased to know that your Company''s performance is
 better than the industry average.
 
 Dividend
 
 The Directors are pleased to recommend a dividend of 25% (Rs.2.50 per
 share) on the equity share capital of the Company. (Previous year
 Rs.2.50, including interim dividend Rs.1 per share).
 
 Capital expenditure
 
 During the year under review the Company incurred capital expenditure
 of Rs.116.57 crores.
 
 Exports
 
 The exports during the year was Rs.111.80 crores, declining by 22% from
 the previous year. The export of yarn registered an increase of 23%
 though denim exports declined by around 15%. The exports scenario was
 affected by a variety of factors like recession in the foreign markets,
 the Eurozone crisis, the intervention by the government in imposing
 restrictions on yarn export, intense competition from other countries,
 and a beneficial impact due the weakening of the rupee. However, the
 Company forayed into Latin American markets and began selling fashion
 denims thus paving the way for bigger business in the future. New
 brands were added to the Company''s portfolio in the American markets,
 while strengthening relations with the existing ones. The Company is
 confident of registering a handsome increase both in volume and value
 terms during the current year on account of the new product development
 and its presence in the high-end denim market. Also, the Company
 engaged reputed Italian designers to enhance its high fashion
 collection.
 
 Further issue of Capital
 
 The Company issued 11,60,000 equity shares at a price of Rs.135 per share
 to the promoters by way of preferential allotment of the shares
 pursuant to the approvals granted by the Company in the General
 Meeting. The funds received against the issue of these shares of Rs.15.66
 crores were utilised to set up a 25 MW captive power plant in the denim
 division at Ramtek.
 
 During the year the Company has redeemed 2,71,600 Cumulative Redeemable
 Preference Shares issued to IFCI.
 
 Future outlook
 
 The government is taking various steps to stabilise the industry
 including measures to increase the export of textile and clothing as
 India''s share of exports to the world markets is far behind that of the
 other countries.
 
 The Company is confident of doing well despite the unfavourable
 industry scenario, in view of the brightening situation in the denim
 market and development of new products in the high-end segment of the
 market. The Company is planning to set up a 30,000 spindle unit in
 Ramtek at a cost of Rs. 100 crores to further improve the profitability
 of the denim unit and also avail of the capital incentives and interest
 subsidies in addition to TUFs benefit in Maharashtra. The unit is
 expected to be commissioned during the current year. The Company''s 25
 MW captive power plant in Ramtek is nearing completion and is expected
 to be commissioned soon.
 
 Directors
 
 During the year, Mr. B. Rama Rao has been withdrawn and Mr. R. S.
 Vidyasagar has been nominated by IDBI as its Nominee Director.
 
 Mr. R. Surender Reddy and Mr. N. L. Tibrewal will retire at the ensuing
 Annual General Meeting and being eligible, offer themselves for
 reappointment.
 
 Corporate Governance
 
 As per the revised Clause 49 of the Listing Agreement on Corporate
 Governance, Management Discussion and Analysis Report forms part of the
 annual report. Further, a separate report on Corporate Governance
 together with the Certificate from the Auditors of the Company
 regarding compliance of Corporate Governance also forms part of the
 Annual Report.
 
 Directors'' Responsibility Statement
 
 The Board of Directors of the Company confirms:
 
 1.  That in the preparation of the annual accounts, the applicable
 accounting standards have been followed and there has been no material
 departure;
 
 2.  That the selected accounting policies were applied consistently and
 the Directors 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 as at 31st March 2012 and of the profit of the Company for
 the year ended on that date.
 
 3.  That 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.
 
 4.  That the annual accounts have been prepared on a going concern
 basis
 
 Subsidiary
 
 In accordance with the general circular issued by the Ministry of
 Corporate Affairs, Government of India, the Balance Sheet, Profit and
 Loss Account and other documents of the Subsidiary Company is not being
 attached with the Balance Sheet of the Company. The Company will make
 available the Annual Accounts of the subsidiary company and the related
 detailed information to any member of the Company who may be interested
 in obtaining the same. The annual accounts of the subsidiary company
 will also be kept open for inspection at the Registered Office of the
 Company and that of the respective subsidiary company. The Consolidated
 Financial Statements presented by the Company include the financial
 results of its subsidiary company. The information required to be
 furnished of the subsidiary company is provided elsewhere in the Annual
 Report.
 
 Auditors
 
 The Auditors M/s. Brahmayya & Co, retire at the ensuing Annual General
 Meeting and are eligible for reappointment.
 
 Conservation of energy, technology absorption, foreign exchange
 earnings and outgo
 
 The details as required under the Companies (Disclosure of Particulars
 in the Report of Board of Directors) Rules, 1988 are given at
 Annexure-I.
 
 Deposits
 
 There are no overdue deposits as on 31st March 2012
 
 Employees
 
 Periodic training programmes to develop a skilled workforce are
 undertaken like personality development programmes, yoga camps.
 Employee participation in district/state level sports events, among
 others is also encouraged.
 
 An integrated woman-oriented programme trains women to undertake
 skilled jobs at its units.
 
 The information required under Section 217 (2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules, 1975 is
 given in Annexure - II.
 
 Acknowledgements
 
 The Board of Directors are pleased to place on record their
 appreciation of the cooperation and support extended by All-India
 financial institutions, banks and various state and Central government
 agencies.
 
 The Board also wishes to place on record its appreciation of the
 valuable services rendered by the employees of the Company.
 
                                          By order of the Board
 
 Place: Secunderabad                               L.N. Agarwal
 
 Date: 17th May 2012             Chairman and Managing Director