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Auditor Report of Bombay Dyeing & Manufacturing Company Ltd.

Mar 31, 2022

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of The Bombay Dyeing and Manufacturing Company Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, the Statement of Cash Flows for the year then ended, and notes to the Standalone Financial Statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone financial statements'').

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, its loss and total comprehensive income, the changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the "Auditor''s Responsibilities for the Audit of the Standalone Financial Statements" section of our report. We are independent of the Company in accordance with the "Code of Ethics" issued by The Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act, and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, for the year ended March 31, 2022 and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report:

Key Audit Matters

How was the matter addressed in our audit

Deferred Tax Assets ("DTA") on Unabsorbed Depreciation and Brou

ght Forward Business Losses

The Company has recognised DTA for the carry forward of unused tax losses in the form of unabsorbed depreciation and carried forward business losses to the extent it is probable that the future taxable profits will be available against which such unused tax losses can be utilised (before the expiry period thereof for its utilisation). The recognition is based on the projected profitability. The Company has recognised DTA based on the reduced rate of tax as per the provisions Section 115BAA of the Income-tax Act, 1961 since such deferred tax assets/ liabilities are expected to be realised or settled at reduced rate.

Such recognition of DTA is a key audit matter as the recoverability of tax losses within the time frame allowed, involves significant estimate of the financial projections, availability of sufficient taxable income in the future and significant judgements in the interpretation of tax regulations and tax positions adopted by the Company.

[Refer Note "x" to Significant Accounting Policies and Note 10 to standalone financial statements]

Our audit procedures included the following:

â¢ Considered the Company''s accounting policies with respect to recognition of tax credits in accordance with Ind AS 12 on "Income Taxes";

â¢ Evaluated the Company''s tax positions by comparing it with prior years and past precedents;

â¢ Obtained the projected profitability statements along with expected tax rate that would apply as to the recoverability of tax losses;

â¢ Evaluated the estimates of profitability made by the management on the basis of which it is considered probable that the Company will have sufficient taxable income against which the unused tax losses will be utilised and also within the expected timing of utilisation;

â¢ Discussed with the management the future business plans and financial projections and underlying assumptions used based on which the estimate of profitability is made;

â¢ Assessed the disclosures in accordance with the requirements of Ind AS 12.

Key Audit Matters	How was the matter addressed in our audit
Uncertain tax positions Direct and Indirect Taxes
The Company has uncertain tax matters pending litigations under	Our audit procedures include the following:
direct tax and various indirect tax laws. The litigation involves significant judgement to determine the possible outcome based on which accounting treatment is given to the disputed amount.	â¢	Obtained details of uncertain tax position and gained understanding thereof;
These matters are considered to be key audit matter given the magnitude of potential outflow of economic resources and	â¢	Obtained details of completed tax assessments and also demands raised;
uncertainty of potential outcome.	â¢	Read and analysed relevant communication with the authorities;
[Refer Notes 11 and 41 to the standalone financial statements]	â¢	Considered the legal advice obtained by the management on possible outcome of the litigation;
	â¢	Discussed with senior management and evaluated management''s assumptions regarding provisions made;
	â¢	Assessed the disclosures in accordance with the requirements of Ind AS 37 on "Provisions, Contingent Liabilities and Contingent Assets".

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Board''s Report including Annexures to Board''s Report, Management Discussion and Analysis, Corporate Governance and Shareholderâs Information and Business Responsibility Report, but does not include the standalone financial statements and our auditor''s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c. The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, the Statement of Cash Flows and notes to the standalone financial statements dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;

e. On the basis of written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164(2) of the Act;

f. With respect to the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure A"; Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting

g. With respect to the matters to be included in the Auditor''s Report in accordance with requirement of Section 197(16) of the Act, as amended,

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid during the current year by the Company to its directors is in accordance with the provisions of Section 197 of the Act.

h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Notes 41 and 42 to the standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as required under the applicable law or accounting standards;

iii. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2022.

iv. (a) The Management has represented that, to the

best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate

Beneficiaries (Refer Note 39(i) to the Standalone financial statements);

(b) The Management has represented, that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 39(j) to the Standalone financial statements);

(c) Based on such audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided in (a) and (b) above, contain any material misstatement.

v. Since the Company has not declared or paid any dividend during the year, the question of commenting on whether dividend declared or paid is in accordance with Section 123 of the Companies Act, 2013 does not arise.

2. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of Section 143(11) of the Act, we enclose in the "Annexure B", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

For BANSI S. MEHTA & CO.

Chartered Accountants Firm Registration No.100991W

PARESH H. CLERK

Partner

PLACE : Mumbai Membership No. 036148

DATED : May 4, 2022 UDIN : 22036148AIJHHW5656

Mar 31, 2018

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as âfinancial statementsâ).

Managementâs Responsibility for the Standalone Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) (Amendment) Rules, 2016 as amended and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018 and its financial performance including other comprehensive income, the changes in equity and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Notes to the standalone financial statements:

i. Note 49 to the standalone financial statements regarding agreements to sell certain apartments in the proposed residential towers being constructed at Island City Centre to SCAL Services Limited, in terms of various MOUs entered between the companies till March 2018. The Company has during the year recognised net revenues of INR 445.58 crore (2016-17 INR 209.49 crore) and resultant profit before tax of INR 257.04 crore (2016-17 INR 223.26 crore) on sale of said apartments to SCAL.

ii. Note 52 (b) to the standalone financial statements regarding the remuneration paid to the Managing Director for the year ended March 31, 2017 in excess of the limits prescribed under section 197 read with Schedule V of the Act by INR 4.29 crore. The Company has received an approval from the Central Government dated June 21, 2017, for payment of remuneration amounting to INR 2.12 crore only. The Company has made a fresh application to the Central Government with a request to reconsider the amount approved, which is pending.

Our opinion is not modified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act, we report that:

a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) the Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act, read with relevant rules issued thereunder.

e) on the basis of the written representations received from the directors of the Company as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

f) with respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure B. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls with reference to financial statements.

g) with respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 44 to the standalone financial statements.

ii. The Company did not have any material foreseeable losses on long term contracts including derivative contracts requiring provision under the applicable law or accounting standards.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure A to the Independent Auditorâs Report

Referred to in paragraph 1 âReport on Other Legal and Regulatory Requirementsâ in our Independent Auditorsâ Report to the members of THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED on the Standalone financial statements for the year ended March 31, 2018.

Statement on Matters specified in paragraphs 3 & 4 of the Companies (Auditorâs Report) Order, 2016:

i) a) The Company has maintained records showing full particulars, including quantitative details and situation of fixed assets. The records of certain assets need to be assimilated to make identification possible.

b) The Company has a program for physical verification of fixed assets in a phased manner. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verification are not material and have been properly dealt with in the books of account.

c) According to the information and explanations given to us and based on the documents and records produced before us, the title deeds of immovable properties are held in the name of the Company.

ii) The Management has conducted physical verification of inventory (excluding stocks lying with third parties) at reasonable intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. The discrepancies noticed on verification between physical stock and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

iii) The Company has granted unsecured loans and an interest free shareholdersâ deposit to a jointly controlled entity covered in the register maintained under section 189 of the Companies Act.

(a) The terms and conditions of the grant of such loans are not prima facie prejudicial to the Companyâs interest;

(b) The principal amount of the loans and shareholderâs deposit and interest thereon have not been repaid as due and the Company has made adequate provision against the same.

(c) The loans and shareholderâs deposit and interest aggregating to INR 151.93 crore are overdue for more than ninety days. The Company is taking strategic steps to mitigate any further losses from the joint venture and has made adequate provision against the same.

iv) The Company has obtained a legal opinion that it can avail the exemption provided in section 186 (11) of the Companies Act, 2013 and that by virtue of such exemption the provisions of section 186 (2) of the Companies Act 2013 are not applicable to the Company. Based on the legal opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to grant of loans, investments made, guarantees given and securities provided.

v) In our opinion and according to the information and explanations given to us, the Company has complied with directives issued by Reserve Bank of India and the provision of section 73 to 76, or any other relevant provisions of the Act and The Companies (Acceptance and Deposits) Rules, 2014, as amended, with regard to deposit accepted from the public. According to the information and explanation given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vi) We have broadly reviewed the books of accounts and records maintained by the Company in respect of manufacture of products covered under the Rules made by the Central Government for maintenance of cost records, under section 148 (1) of the Companies Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii) a) According to the information and explanation given to us and the records examined by us, the Company is generally regular in depositing undisputed statutory dues, including dues pertaining to provident fund, employeesâ state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities, wherever applicable and there are no such outstanding dues as at March 31, 2018, for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us and the records of the Company examined by us, dues of income tax, sales tax, service tax, customs duty and excise duty not deposited on account of dispute are as follows:

No.	Name of the statute	Nature of dues	Amount (INR in crore)	Period to which the amount relates	Forum where dispute is pending
1	Sales Tax and Value	Sales tax	0.09	1999-2000	Deputy Commissioner Appeal - II
	Added Tax	MVAT	0.38	2009-10	Maharashtra Sales Tax Tribunal
		CST	19.41	2008-09	Joint Commissioner of Sales tax (Appeals), Mumbai
		CST	1.80	2009-10	Maharashtra Sales Tax Tribunal
		CST	1.52	2009-10	Assistant Commissioner of sales tax, New Delhi
		CST	2.74	2011-12	Assistant Commissioner of sales tax, New Delhi
		CST	0.50	2012-13	Joint Commissioner of Sales Tax (Appeals), Mumbai
		CST	2.97	2012-13	Joint Commissioner of Sales Tax (Appeals), New Delhi
		CST	0.16	2013-14	Joint Commissioner of Sales Tax (Appeals), Kerala
		CST	1.56	2013-14	Joint Commissioner of Sales Tax (Appeals), Mumbai
		CST	0.14	2014-15	Joint Commissioner of Sales Tax (Appeals), West Bengal
2	Income Tax Act, 1961	Income tax	0.05	2009-10	Income Tax Appellate Tribunal
		Income tax	0.36	2010-11	Income Tax Appellate Tribunal
		Income tax	0.09	2011-12	Income Tax Appellate Tribunal
		Income tax	0.13	2012-13	Commissioner of Income-tax (Appeals)
		Income tax	18.09	2013-14	Commissioner of Income-tax (Appeals)
		Income tax	1.10	2014-15	Commissioner of Income-tax (Appeals)
		Income tax	25.44	2014-15	Commissioner of Income-tax (Appeals)
3	The Customs Act, 1962	Interest on	0.95	1995-2012	Commissioners of Customs (Appeals), Mumbai
		customs duty
4	The Central Excise Act,	Excise Duty	0.16	1989-90 to	Commissioners of Central Excise (Appeals), Mumbai
	1944			1995-96
		Excise Duty	0.62	1995-96 to	Deputy Commissioner of Central Excise
				1996-97
		Excise Duty	0.03	1997-1998	Deputy Commissioner of Central Excise
		Service Tax	0.76	2003-04 to	Commissioner of Service Tax, Mumbai Tribunal
				2005-06
		Interest on	0.20	2002-2006	Bombay High Court
		excise duty
5	Municipal Corporation	Octroi	2.16	2007-2008	Deputy Assessor & Collector (Octroi)
	of Greater Mumbai
	Octroi Rules, 1965

viii) According to the information and explanations given to us and based on the documents and records produced before us, there has been no default in repayment of loans or borrowings to financial institutions or banks. There were no loans or borrowings taken from the government during the year. The Company has not issued any debentures.

ix) The Company has not raised moneys either by way of initial public offer or further public offer (including debt instruments). The monies raised by way of term loans were applied for the purposes for which those were raised.

x) Based upon the audit procedures performed by us, to the best of our knowledge and belief and according to the information and explanations given to us by the Management, no fraud by the Company or fraud on the Company by its officers or employee has been noticed or reported during the year.

xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

The remuneration paid to the Managing Director during the year March 31, 2017 was in excess of the limits prescribed under Section 197 of the Companies Act by INR 4.29 crore. The Company has received an approval from the Central Government dated June 21, 2017, for payment of remuneration amounting to INR 2.12 crore only. The Company has made a fresh application to the Central Government with a request to reconsider the amount approved. Pending such representation, no adjustments have been made in the accounts for the year ended March 31, 2017 and the excess amount is held by the Managing Director in trust for the Company.

xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, the provision of clause 3(xii) of the Order is not applicable.

xiii) According to the information and explanations given to us and based on the documents and records produced before us, the transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of clause 3(xiv) of the Order are not applicable.

xv) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly, the provision of clause 3(xv) of the Order is not applicable.

xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and hence the provision of clause 3(xvi) of the Order is not applicable.

Annexure B to the Independent Auditorâs Report

Referred to in paragraph 2 (f) âReport on Other Legal and Regulatory Requirementsâ in our Independent Auditorâs Report to the members of THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED on the Standalone financial statements for the year ended March 31, 2018.

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)

We have audited the internal financial controls with reference to financial statements of THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditorsâ Responsibility

Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls With Reference to Financial Statements

A Companyâs internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companyâs internal financial controls with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With Reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements , including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2018, based on the internal controls with reference to financial statements criteria established by the Company, considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For KALYANIWALLA & MISTRY LLP

Chartered Accountants

Firm Registration No. 104607W/W100166

Anil A. Kulkarni

Partner

M. No.: 047576

Mumbai: May 14, 2018

Mar 31, 2017

INDEPENDENT AUDITOR''S REPORT

TO THE MEMBERS OF

THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED

("the Company"), which comprise the Balance Sheet as at March 31, 2017, Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the standalone Financial Statements

the Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. fumes Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements, the procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to:

1) Note 39 to the financial statements regarding agreements to sell certain apartments in the proposed residential towers being constructed at Island City Centre to SCAL Services Ltd., a Group Company, in terms of various MOUs entered between the companies till March 2017. the Company has during the year recognized net revenues of Rs, 156.07 crore (2015-16: Rs, 239.26 crore) and resultant profit before tax ofRs, 102.63 crore (2015-16: Rs, 158.63 crore) on sale ofsaid apartments to SCAL.

2) Note 43 to the financial statements regarding the remuneration paid to the Managing Director in excess of the limits prescribed under Section 197 read with Schedule V of the Act by Rs, 4.29 crore, due to inadequacy of profits, the Company has received an approval from the Central Government dated June 21, 2017, for payment of remuneration amounting to Rs, 2.12 crore only, âftie Company is proposing to make a representation to the Central Government with a request to reconsider the amount approved. Pending such representation, no adjustments have been made in the accounts for the year ended March 31, 2017 and the excess amount is held by the Managing Director in trust for the Company.

Our opinion is not modified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditors Report) Order, 2016 (âthe Order") issued by the Central Government of India in terms ofsub-section (11) ofsection 143 of the Act, we give in Annexure

''A'' a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2) As required by section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination ofthose books.

(c) The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of written representations received from the directors as on March 31, 2017 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in Annexure ''B''; and,

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us, we further report that:

i. The Company has disclosed the impact of pending litigations on its financial position in the financial statements- Refer Notes 32 and 42 to the standalone financial statements.

ii. The Company does not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv The company has provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes, as defined in the Notification S. 0.3407 (E) dated 8^th November, 2016 of the Ministry of Finance, during the period from 8^th November, 2016 to 30^th December, 2016. Based on audit procedures performed and the representations of management, we report that the disclosures are in accordance with books of account maintained by the Company - Refer Note 47 to the standalone financial statements.

Referred to in Para 1 âReport on Other Legal and Regulatory Requirements'' of our Report to the members of the Company on the standalone financial statements for the year ended March 31, 2017:

Statement on Matters Specified in paragraphs 3 and 4 of the Companies (Auditors Report) Order, 2016

1. (a) The Company has maintained records showing full particulars, including quantitative details and situation of fixed assets, the records of certain assets need to be assimilated to make identification possible.

(b) The Company has a program for physical verification of fixed assets in a phased manner, the Company did not carry out physical verification of fixed assets during the year, however, the dismantling and slare of its Ranjangaon plant is in progress. In the circumstances, we are unable to state whether any material discrepancies were noticed.

(c) According to the information and explanation given to us and based on the documents and records produced before us, the title deeds of immovable properties are held in the name of the company.

2. (a) The Management has conducted physical verification of inventory (excluding stocks lying with third parties) at reasonable intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them.

(b) The discrepancies noticed on verification between physical stock and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3. The Company has granted unsecured loans / deposits to two companies and an interest free shareholders'' deposit to a jointly controlled entity covered in the register maintained under section 189 of the Companies Act.

(a) The terms and conditions of the grant of such loans are not prima facie prejudicial to the Company''s interest;

(b) The principal amount and interest on the loans / deposits have been repaid regularly, as stipulated, the shareholder''s deposit is free of interest and repayment thereof was due on 31^st December, 2015.

(c) The shareholder''s deposit is overdue for more than ninety days, the Company has made adequate provision against the same and has also made an application to Reserve Bank of India for further extension of five years which is pending.

No.	Name of the statute	Nature of dues	Amount (Rs, in crores)	Period to which the amount relates	Forum where dispute is pending
1	Sales Tax and Value Added Tax	Sales tax	0.09	1999-2000	Deputy Commissioner Appeal - II
		MVAT	0.38	2008-09	Maharashtra Sales Tax Tribunal
		CST	1.80	2008-09	Maharashtra Sales Tax Tribunal
		CST	1.52	2009-10	Department of Trade and Taxes, New Delhi
		CST	2.74	2011-12	Department of Trade and Taxes, New Delhi
		CST	0.50	2012-13	Joint Commissioner of Sales Tax, Mumbai

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

5. In our opinion and according to the information and explanations given to us, the Company has complied with directives issued by Reserve Bank of India and the provision of sections 73 to 76 or any other applicable provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

6. We have broadly reviewed the books of accounts and records maintained by the Company in respect of manufacture of products covered under the Rules made by the Central Government for maintenance of cost records, under section 148 (1) of the Companies Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. (a) According to the information and explanation given

to us and the records examined by us, the Company is generally regular in depositing undisputed statutory dues, including dues pertaining to provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, there are no undisputed dues which have remained outstanding as at the end of the financial year, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of sales tax, income tax, custom duty, service tax, excise duty or cess which have not been deposited on account of any dispute, except as stated below:

8. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowing to financial institutions, banks or government, the Company has not issued any debentures.

No.	Name of the statute	Nature of dues	Amount (Rs, in crores)	Period to which the amount relates	Forum where dispute is pending
2	Income Tax Act, 1961	Income tax	0.09	2006-07	IncomeTax Appellate Tribunal
		Income tax	0.03	2007-08	Deputy Commissioner oflncome Tax- TDS, Mumbai
		Income tax	0.15	2007-08	IncomeTax Appellate Tribunal
		Income tax	0.02	2008-09	Deputy Commissioner oflncome Tax- TDS, Mumbai
		Income tax	0.43	2008-09	IncomeTax Appellate Tribunal
		Income tax	1.86	2009-10	IncomeTax Appellate Tribunal
		Income tax	0.36	2010-11	IncomeTax Appellate Tribunal
		Income tax	0.13	2011-12	Commissioner oflncome Tax (Appeal)
		Income tax	1.07	2012-13	Commissioner oflncome Tax (Appeal)
		Income tax	0.96	2013-14	Commissioner oflncome Tax (Appeal)
3	the Customs Act, 1962	Interest on customs duty	0.95	1995-2012	Commissioners ofCustoms (Appeals), Mumbai
4	the Central Excise Act, 1944	Excise Duty	0.16	1989-90 to 1995-96	Commissioners of Central Excise (Appeals), Mumbai
		Excise Duty	0.62	1995-96 to 1996-97	Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai
		Excise Duty	0.03	1997-1998	Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai
		Service Tax	0.76	2003-04 to 2005-06	Commissioner ofServiceTax, Mumbai Tribunal
		Interest on excise duty	0.20	2002-2006	Bombay High Court
5	Municipal Corporation ofGreaterMumbai Octroi Rules, 1965	Octroi	2.16	2007-2008	Deputy Assessor & Collector (Octroi)

9. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments), the monies raised by way of term loans were applied for the purposes for which those were raised.

10. Based upon the audit procedures performed by us, to the best of our knowledge and belief and according to the information and explanations given to us by the Management, no fraud by the Company or fraud on the Company by its officers or employee has been noticed or reported during the year.

11. According to the information and explanations given to us and based on our examination of the records of the Company, the managerial remuneration paid or provided to the Managing Director is in excess of the limits prescribed under Section 197 read with Schedule V of the Act by Rs, 4.29 crore, due to inadequacy of profits, the Company has received an approval from the Central Government dated June 21, 2017, for payment of remuneration amounting to Rs, 2.12 crore only, âthe Company is proposing to make a representation to the Central Government with a request to reconsider the amount approved. Pending such representation, no adjustments have been made in the accounts for the year ended March 31, 2017 and the excess amount is held by the Managing Director in trust for the Company.

12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company.

13. According to the information and explanations given to us and based on the documents and records produced before us, the transactions with related parties are in compliance with section 177 and 188 of the Act and the details thereof have been disclosed in the Financial Statements as required by the applicable accounting standards.

14. According to the information and explanations given to us and based on the documents and records produced before us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of Clause (xiv) of the order are not applicable.

15. According to the information and explanations given to us and based on the documents and records produced before us, the Company has not has entered into any non-cash transactions with directors or persons connected with them.

16. According to the information and explanations given to us and based on the documents and records produced before us, the Company is not required to be registered under section 45- IA of the Reserve Bank of India Act, 1934.

the Annexure referred to in Para 2 (f) Report on Other Legal and Regulatory Requirements'' of our Independent Auditors'' Report to the members of the Company on the financial statements for the year ended March 31, 2017:

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 ("the Actâ)

We have audited the internal financial controls over financial reporting of THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED ("the Company") as at March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

the Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAI''). "friese responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India, ffiose Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, the procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For KALYANIWALLA & MISTRY LLP

Chartered Accountants

Firm Registration No. 104607W/W100166

DARAIUS Z. FRASER

Place: Mumbai Partner

Date: 28^th June, 2017 Membership No.: 42454

Mar 31, 2016

We have audited the accompanying standalone financial statements of THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2016, Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2016 and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to:

1) Note 37 to the financial statements regarding agreements to sell certain apartments in the proposed residential towers being constructed at Island City Centre to SCAL Services Ltd., a Group Company, in terms of various MOUs entered between the companies till March 2016. The Company has during the year recognized net revenues of Rs, 239.26 crores (2014-15: Rs, 301.11 crore) and resultant profit before tax ofRs, 158.63 crore (2014-15: Rs, 224.49 crore) on sale of said apartments to SCAL.

2) Note 41 to the financial statements regarding the remuneration paid to the Managing Director in excess of the limits prescribed under Section 197 read with Schedule V of the Act by Rs,4.40 crore, due to inadequacy of profits. The excess remuneration is subject to the approval of the Central Government for which an application has been made.

Our opinion is not modified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act, we give in Annexure ''A'' a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2) As required by section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of written representations received from the directors as on March 31, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on

March 31, 2016 from being appointed as a director in terms of section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in Annexure ''B''; and,

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us, we further report that:

i. The Company has disclosed the impact of pending litigations on its financial position in the financial statements - Refer Notes 31 and 40 to the standalone financial statements.

ii. The Company does not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Referred to in Para 1 ''Report on Other Legal and Regulatory Requirements'' of our Report to the members of the Company on the standalone financial statements for the year ended March 31, 2016:

Statement on Matters Specified in paragraphs 3 and 4 of the Companies (Auditors Report) Order, 2016

1. (a) The Company has maintained records showing full

particulars, including quantitative details and situation of fixed assets. The records of certain assets need to be assimilated to make identification possible.

(b) The Company has a program for physical verification of fixed assets in a phased manner. In our opinion, the period of verification is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed in respect of the assets physically verified during the year.

(c) According to the information and explanation given to us and based on the documents and records produced before us, the title deeds of immoveable properties are held in the name of the company.

2. (a) The Management has conducted physical verification of

inventory (excluding stocks lying with third parties) at reasonable intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them.

(b) The discrepancies noticed on verification between physical stock and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3. The Company has granted unsecured loans / deposits to two companies and an interest free shareholders'' deposit to a jointly controlled entity covered in the register maintained under section 189 of the Companies Act.

(a) The terms and conditions of the grant of such loans are not prima facie prejudicial to the Company''s interest;

(b) The principal amount and interest on the loans / deposits have been repaid regularly, as stipulated. The shareholder''s deposit is free of interest and repayment thereof was due on December 31, 2015.

(c) The shareholder''s deposit is overdue for more than ninety days. The Company has made an application to Reserve Bank of India for further extension of five years which is pending.

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

5. In our opinion and according to the information and explanations given to us, the Company has complied with directives issued by Reserve Bank of India and the provision of sections 73 to 76 or any other applicable provisions of the Act and The Companies (Acceptance of Deposits) Rules, 2014 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

6. We have broadly reviewed the books of accounts and records maintained by the Company in respect of manufacture of products covered under the Rules made by the Central Government for maintenance of cost records, under section 148 (1) of the Companies Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. (a) According to the information and explanation given

to us and the records examined by us, the Company is generally regular in depositing undisputed statutory dues, including dues pertaining to provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, there are no undisputed dues which have remained outstanding as at the end of the financial year, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of sales tax, income tax, custom duty, service tax, excise duty or cess which have not been deposited on account of any dispute, except as stated below:

No. Name of the statute Nature of dues Amount Period to which the (Rs, in crores) amount relates

1 Sales Tax and Value Sales tax 0.09 1999-2000 Added Tax MVAT 2.33 2008-09

CST 4.00 2008-09

2 Income Tax Act, 1961 Income tax 0.03 2007-08

Income tax 0.02 2008-09 3 The Customs Act, 1962 Interest on customs 0.95 1995-2012 duty

4 The Central Excise Act, Excise Duty 0.16 1989-90 to 1995-96 1944

Excise Duty 0.62 1995-96 to 1996-97

Excise Duty 0.03 1997-1998

Excise Duty 0.09 2000-2001

Service Tax 0.76 2003-04 to 2005- 06 Interest on excise duty 0.20 2002-2006

5 Municipal Corporation Octroi 2.16 2007-2008 of Greater Mumbai Octroi Rules, 1965

NAME of the Statute Forum where dispute is pending

Sales Tax AND Value Deputy Commissioner Appeal - II Added Tax

Maharashtra Sales Tax Tribunal

Maharashtra Sales Tax Tribunal

Income Tax Act,1961 Deputy Commissioner of Income Tax- TDS, Mumbai

Deputy Commissioner of Income Tax- TDS, Mumbai

The Customs Act,1961 Commissioners of Customs (Appeals), Mumbai

The Central Excise Commisioners of Central Excise Act,1944 (Appeals), Mumbai

Customs, Excise and Service Tax Appellate Tribunal (CESTAT),Mumbai

Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai

Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai

Commissioner of Service Tax, Mumbai Tribunal

Bombay High Court

Municipal Cororation Deputy Assessor & Collector (Octroi) of Greater Mumbai Octroi Rules,1965

8. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans on borrowing to financial institutions, banks or government. The Company has not issued any debentures.

9. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). The monies raised by way of term loans were applied for the purposes for which those were raised.

10. Based upon the audit procedures performed by us, to the best of our knowledge and belief and according to the information and explanations given to us by the Management, no fraud by the Company or fraud on the Company by its officers or employee has been noticed or reported during the year.

11. According to the information and explanations give to us and based on our examination of the records of the Company, the managerial remuneration paid or provided to the Managing Director is in excess of the limits prescribed under Section 197 read with Schedule V of the Act byRs, 4.40 crore, due to inadequacy of profits. The Company has made an application to the Central Government for the excess remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company.

13. According to the information and explanations given to us and based on the documents and records produced before us, the transactions with related parties are in compliance with section 177 and 188 of the Act and the details thereof have been disclosed in the Financial Statements as required by the applicable accounting standards.

14. According to the information and explanations given to us and based on the documents and records produced before us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of Clause (xiv) of the order are not applicable.

15. According to the information and explanations given to us and based on the documents and records produced before us, the Company has not has entered into any non-cash transactions with directors or persons connected with them.

16. According to the information and explanations given to us and based on the documents and records produced before us, the Company is not required to be registered under section 45- IA of the Reserve Bank of India Act, 1934.

For Kalyaniwalla & Mistry

Chartered Accountants

Firm Registration No. 104607W

ERMIN K. IRANI

Place: Mumbai Partner

Date: 27th May, 2016 Membership No.: 35646

Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and the Cash Flow statement for the year then ended, and a summary of significant accounting policies andother explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015 and its profit and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to:

1. Note No. 36 to the financial statements regarding agreements to sell certain apartments in the proposed residential towers being constructed at Island City Centre to SCAL Services Ltd., a Group company, in terms of various MOUs entered between the companies till March 2015. The Company has during the year recognized net revenues of Rs. 301.11 crores (2013-14: Rs. 670.13 crores) and resultant profit before tax of Rs. 224.49 crores (2013-14: Rs. 355.45 crores) on sale of apartments to SCAL.

2. Note 38 to the financial statements regarding the giving of advance possession of earmarked lands at Spring Mills, Wadala to MCGM and MHADA under the Integrated Development Scheme as per the provisions of DCR 58. In lieu of the physical possession given to MCGM, the Company has recognized the entitlement of additional Development Rights (FSI) available for its own use and has converted the same into stock in trade at market value. An amount of Rs. 351.24 crores has been released from Revaluation Reserve to the credit of the Statement of Profit and Loss in respect of areas agreed for sale /sold and percentage of work completed.

3. Note 40 to the financial statements regarding the remuneration paid to the Managing Director being in excess of the limits prescribed under sections 197 read with schedule V of the Companies Act, 2013 by Rs. 3.26 crore, due to inadequacy of profits. The excess remuneration is subject to the approval of the Central Government for which an application has been made.

Our opinion is not modified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a. The Company has disclosed the impact of pending litigations on its financial position in the financial statements - Refer Notes 30 and 39 to the financial statements.

b. The Company does not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT

The Annexure referred to in Para 1 ''Report on Other Legal and Regulatory Requirements'' of our Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended March 31, 2015.

i) (a) The Company has maintained records showing full particulars, including quantitative details and situation of fixed assets. The records of certain assets need to be assimilated to make identification possible.

b) The Company has a program for physical verification of fixed assets in a phased manner. In our opinion, the period of verification is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed in respect of the assets physically verified during the year.

ii) a) The Management has conducted physical verification of inventory (excluding stocks lying with third parties) at reasonable intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The Company is generally maintaining proper records of inventory. The discrepancies noticed on verification between physical stock and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

iii) a) The Company has granted unsecured loans/ deposits to two companies and an interest free shareholders'' deposit to a jointly controlled entity covered in the register maintained under section 189 of the Companies Act. The principal amount and interest on the loans/ deposits have been repaid regularly, as stipulated. The shareholder''s deposit is free of interest and repayment thereof has been extended up to December 2015 as permitted by Reserve Bank of India.

b) There is no amount overdue more than rupees one lakh as on the Balance sheet date, as the repayment of the shareholder''s deposit has been extended.

iv) In our opinion and according to the information and explanations given to us, the Company has an internal control system which is generally adequate, commensurate with the size of the Company and nature of its business, with regard to purchases of inventory, fixed assets, and for the sale of goods and services. On the basis of our examination of the books and records and the information and explanations given to us, we have not come across any continuing failure to correct major weakness in the internal control system.

v) In our opinion and according to the information and explanations given to us, the Company has complied with directives issued by reserve Bank of India and the provision of sections 73 to 76 or any other applicable provisions of the Act and The Companies (Acceptance of Deposits) Rules, 2014 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

vi) We have broadly reviewed the books of accounts and records maintained by the Company in respect of manufacture of products covered under the Rules made by the Central Government for maintenance of cost records, under section 148 (1) of the Companies Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii) a) According to the information and explanation given to us and the records examined by us, the Company is generally regular in depositing undisputed statutory dues, including dues pertaining to Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise , Value Added Tax, Cess and any other statutory dues with the appropriate authorities. We have been informed that there are no undisputed dues which have remained outstanding as at the end of the financial year, for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise duty or Cess which have not been deposited on account of any dispute, except as stated below:

No. Name of the statute Nature of Dues Amount

(Rs. in crores)

1 Income Tax Act, 1961 Income tax 0.03

Income tax 0.02

Income tax 0.13

Income tax 0.26

2 The Customs Act, 1962 Interest on 0.95 customs duty

3 The Central Excise Act, Excise Duty 0.16 1944

Excise Duty 0.56

Excise Duty 0.03

Excise Duty 0.09

Excise Duty 0.02

Service Tax 0.76

Interest on 0.20 excise duty

4 Municipal Corporation of Octroi 2.16 Greater Mumbai Octroi Rules, 1965

No.Name of the statute Period to which Forum where dispute is the amount pending relates

1 Income Tax Act, 1961 2007-08 Deputy Commissioner of Income Tax- TDS, Mumbai

2008-09 Deputy Commissioner of Income Tax- TDS, Mumbai

2009-10 Commissioner of Income Tax (Appeals), Mumbai

2010-11 Commissioner of Income Tax (Appeals), Mumbai

2 The Customs Act, 1962 1995 to Commisioners of 2012 Customs (Appeals), Mumbai

3 The Central Excise Act, 1989-90 to Commissioner of Central 1944 1995-96 Excise (Appeals), Mumbai

1995-96 to Customs, Excise and Service 1996-97 Tax Appellate Tribunal (CESTAT), Mumbai

1997-1998 Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai

2000-2001 Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai

2001-2004 Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai

2003-04 to Commissioner of Service Tax 2005-06 Mumbai Tribunal

2002-2006 Bombay High Court

4 Municipal Corporation of 2007-2008 Deputy Assessor & Collector Greater Mumbai Octroi (Octroi) Rules, 1965

c) According to the information and explanations given to us, the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

viii) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the current financial year and in the immediately preceding financial year.

ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks, financial institutions or debenture holders.

x) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by its jointly controlled entity from banks or financial institutions are not prima facie prejudicial to the interest of the Company.

xi) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained.

xii) Based upon the audit procedures performed by us, to the best of our knowledge and belief and according to the information and explanations given to us by the Management, no fraud on, or by the company, has been noticed or reported during the year.

For KALYANIWALLA & MISTRY Chartered Accountants Firm Registration No. 104607W

ERMIN K. IRANI Partner Mumbai, May 25, 2015 Membership No.: 35646

Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of The Bombay Dyeing and Manufacturing Company Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

1. We draw attention to Note 35 to the financial statements regarding agreements to sell certain apartments in the proposed residential towers being constructed at Island City Centre to SCAL Services Ltd., an associate company, for a consideration of Rs. 1,505.64 crores (2012-13: Rs. 667.07 crores). The Company has during the year recognized net revenues of Rs. 670.13 crores (2012- 13: Rs. 323.11 crores) and resultant profit before tax of Rs. 355.45 crore (2012-13: Rs. 203.96 crore) from sale of apartments to SCAL.

2. We draw attention to Note 39 to the financial statements regarding the remuneration paid to the Managing Director being in excess of the limits prescribed under sections 198 and 309 of the Companies Act 1956 by Rs. 2.92 crore, due to inadequacy of profits. The excess remuneration is subject to the approval of the Central Government for which an application has been made.

Our opinion is not qualified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003, (the "Order") as amended, issued by the Central Government in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. As required by section 227(3) of the Act, we report that:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act read with the General circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013; and

(e) on the basis of written representations received from the directors as at March 31, 2014, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date.

1. (a) The Company has maintained records showing particulars, including quantitative details and situation of fixed assets. The records of certain assets need to be assimilated to make identification possible.

(b) The Company has a program for physical verification of fixed assets in a phased manner. In our opinion, the period of verification is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed in respect of the assets physically verified during the year.

(c) In our opinion, the fixed assets disposed off during the year are not substantial and therefore do not affect the going concern assumption.

2. (a) The inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The Company is generally maintaining proper records of inventory. The discrepancies noticed on verification between physical stock and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to Companies, fi rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 except an interest free shareholders'' deposit of Rs. 15.22 crores to a joint venture company, as stated in Note 15 (a).

(b) As stated above, the said shareholders'' deposit has been given free of interest.

(c) As stated in Note 15 (a), the repayment of the said deposit has been extended up to the year 2015 as permitted by Reserve Bank of India.

(d) No amount is overdue as the terms of repayment have been extended Up to 2015.

(e) According to the information and explanation given to us, the Company has taken secured/unsecured loans aggregating Rs. 130 crores from two companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year was Rs. 130 crores and the balance outstanding as at the year-end is Rs. 40 crores.

(f) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions on which the loans have been taken from companies listed in the register maintained under section 301 of the Companies Act, 1956 were not prima facie prejudicial to the interest of the Company.

(g) In our opinion and as per the records examined by us, the payment of principal amount and interest thereon is regular.

4. In our opinion and according to the information and explanations given to us, the Company has internal control procedures which are generally adequate, commensurate with the size of the Company and nature of its business, with regard to purchases of inventory, fixed assets, and for the sale of goods and services. On the basis of our examination of the books and records and the information and explanations given to us, we have not come across any continuing failure to correct major weakness in the internal control system.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have generally been so entered.

(b) According to the information and explanation given to us, transactions in pursuance of such contracts or arrangements entered into the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices or at prices for which similar transactions have been made with other parties, except for the transactions where a comparison of prices could not be made since there was no similar transactions with other parties or transactions of a special nature where comparable alternative quotations were not available.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provision of sections 58A, 58AA or any other applicable provisions of the Companies Act,1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

7. In our opinion, the Company has an internal audit system, commensurate with the size and nature of its business.

8. We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956 in respect of Textile division and Polyester Staple Fibre division of the Company and are of the opinion that prima facie, the prescribed records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of records for any other product or services of the Company.

9. (a) According to the records of the Company, undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise duty, Customs duty, Cess and other material statutory dues applicable to it have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts were in arrears, as on 31st March 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise duty or Cess which have not been deposited on account of any dispute, except as stated below:

No. Name of the statute Nature of dues Amount (Rs. In crores)

1 Income Tax Act, 1961 Income tax 0.03

Income tax 0.02

Income tax 0.13

2 The Customs Act, 1962 Interest on customs 0.95 duty

3 The Central Excise Act, 1944 Excise Duty 0.16

Excise Duty 0.70

Service Tax 0.76

Excise Duty 0.08

Excise Duty 9.85 *

Interest on excise 0.20 duty

4 Municipal Corporation of Octroi 2.16 Greater Mumbai Octroi Rules, 1965

Name of the statute Period to which the Forum where dispute is pending amount relates

Income Tax Act, 1961 2007-08 Deputy Commissioner of Income Tax- TDS, Mumbai

2008-09 Deputy Commissioner of Income Tax- TDS, Mumbai

2009-10 Commissioner of Income Tax (Appeals), Mumbai

The Customs Act, 1962 1995 to 2012 Commisioners of Customs (Appeals), Mumbai

The Central Excise Act, 1944 1989-90 to 1995-96 Commisioners of Central Excise (Appeals), Mumbai

1995-96 to 1997-98, Customs, Excise and Service Tax 2000-01 to 2003-04 Appellate Tribunal (CESTAT), Mumbai

2003-04 to 2005-06 Commissioner of Service Tax, Mumbai Tribunal

2008-2010 Commissioner of Central Excise, Customs & Service Tax, Raigad

2010-2012 Commissioner of Central Excise, Customs & Service Tax, Raigad

2002-2006 Bombay High Court

Municipal Corporation 2007-2008 Deputy Assessor & Collector of Greater Mumbai Octroi Rules, 1965 (Octroi)

* The company has obtained a stay against the said demand from CESTAT

10. The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks, financial institution or debenture holders.

12. In our opinion and according to the information and explanations given to us, the Company has maintained adequate records where the company has granted loans and advances on the basis of security by way of pledge of shares.

13. The company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provision of clause 4 (xiii) of the said Order are not applicable to the Company.

14. According to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein where the Company is dealing or trading in shares, securities, debentures and other investments and such securities are held by the Company in it''s own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given any guarantees for loans taken by others from banks or financial institutions are not prima facie prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained.

17. In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have not been used for long term investment.

18. The Company has not made any preferential allotment of shares to any parties or Companies covered in the register maintained under section 301 of the Act.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise.

21. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For Kalyaniwalla & Mistry

Chartered Accountants

Firm Reg No. 104607W

Ermin K. Irani

Place: Mumbai Partner

Date: May 27, 2014 Membership No: 35646

Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of The Bombay Dyeing and Manufacturing Company Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) in the case of the Statement of Profit and Loss , of the profit of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

EMPHASIS OF MATTER

We draw attention to Note No. 34 to the financial statements regarding agreements to sell certain apartments in the proposed residential towers being constructed at Island City Centre to SCAL Services Ltd., an associate company, for a consideration of Rs. 701.81 crores (31.03.2012 Rs. 743.83 crores). The Company has recognized revenue of Rs. 339.47 crores (31.03.2012 Rs. 341.32 crores) from the said transactions, including an amount of Rs. 89.38 crores (31.03.2012 Rs. 103.67 crores) released from Revaluation Reserve. Our opinion is not qualified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2003, (the "Order'') as amended, issued by the Central Government in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. As required by section 227(3) of the Act, we report that:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act, and

(e) on the basis of written representations received from the directors as at March 31, 2013, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT

Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date.

1. (a) The Company has maintained records showing particulars, including quantitative details and situation of fixed assets. The records of certain assets need to be assimilated to make identification possible.

(b) The Company has a program for physical verification of fixed assets in a phased manner. In our opinion, the period of verification is reasonable, having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed in respect of the assets physically verified during the year.

(c) In our opinion, the fixed assets disposed off during the year are not substantial and therefore do not affect the going concern assumption.

2. (a) The inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The Company is generally maintaining proper records of inventory. The discrepancies noticed on verification between physical stock and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 except an interest free shareholders'' deposit of Rs. 15.22 crores to a joint venture company, as stated in Note 14 (a).

(b) As stated above, the said shareholders'' deposit has been given free of interest.

(c) As stated in Note 14 (a), the repayment of the said deposit has been extended upto the year 2015 as permitted by Reserve Bank of India.

(d) No amount is overdue as the terms of repayment have been extended upto 2015.

(e) According to the information and explanation given to us, the Company has taken unsecured loans aggregating Rs. 210 crores from three companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year is Rs. 210 crores and the balance outstanding as at the year end was Rs. 80 crores.

(f) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions on which the loans have been taken from companies listed in the register maintained under section 301 of the Companies Act, 1956 were not prima facie prejudicial to the interest of the Company.

(g) In our opinion and as per the records examined by us, the payment of principal amount and interest thereon is regular.

4. In our opinion and according to the information and explanations given to us, the Company has internal control procedures which are generally adequate, commensurate with the size of the Company and nature of its business, with regard to purchases of inventory, fixed assets, and for the sale of goods and services. On the basis of our examination of the books and records and the information and explanations given to us, we have not come across any continuing failure to correct major weakness in the internal control system.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have generally been so entered.

(b) According to the information and explanation given to us, transactions in pursuance of such contracts or arrangements entered into the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices or at prices for which similar transactions have been made with other parties, except for the transactions where a comparison of prices could not be made since there was no similar transactions with other parties or transactions of a special nature where comparable alternative quotations were not available.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provision of sections 58A, 58AA or any other applicable provisions of the Companies Act,1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

7. In our opinion, the Company has an internal audit system, commensurate with the size and nature of its business.

8. We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956 in respect of Textile division and Polyster Staple Fibre division of the Company and are of the opinion that prima facie, the prescribed records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of records for any other product or services of the Company.

9. (a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise duty, Customs duty, Cess and other material statutory dues applicable to it have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts were in arrears, as on 31st March 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise duty or cess which have not been deposited on account of any dispute, except as stated below :

No. Name of the statute Nature of Dues Amount (Rs. in crores)

1 Income Tax Act, 1961 Income tax 0.03

Income tax 0.02

2 The Customs Act, 1962 Interest on customs 0.95 duty

3 The Central Excise Act, 1944 Excise Duty 0.16

Excise Duty 0.56

Name of the Statute Period to which the Forum where dispute is pending amount relates

Income Tax Act 1961 2007-08 Commissioner of Income Tax-TDS (Appeals)

2008-09 Commissioner of Income Tax- TDS (Appeals)

The Customs Act 1962 1995 to 2012 Commisioners of Customs (Appeals), Mumbai

The Central Excise Act 1944 1989-90 to Commisioners of Central Excise 1995-96 (Appeals), Mumbai

1995-96 to Customs, Excise and Service Tax 1996-97 Appellate Tribunal (CESTAT), Mumbai

10. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks, financial institution or debenture holders.

12. In our opinion and according to the information and explanations given to us, the Company has maintained adequate records where the company has granted loans and advances on the basis of security by way of pledge of shares.

13. The company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provision of clause 4 (xiii) of the said Order are not applicable to the Company.

14. According to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein where the Company is dealing or trading in shares, securities, debentures and other investments and such securities are held by the Company in it''s own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given any guarantees for loans taken by others from banks or financial institutions are not prima facie prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans have/are being applied for the purpose for which they were obtained.

17. In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have not been used for long term investment.

18. The Company has not made any preferential allotment of shares to any parties or Companies covered in the register maintained under section 301 of the Act.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise.

21. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For and on behalf of

Kalyaniwalla & Mistry

Chartered Accountants

Firm Reg No. 104607W

Viraf R. Mehta

Place: Mumbai Partner

Date: May 28, 2013 Membership No: 32083

Mar 31, 2012

1) We have audited the attached Balance Sheet of The Bombay Dyeing and Manufacturing Company Limited as at March 31, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4) Without qualifying our opinion, we draw attention to the following:

i) Note 32 regarding change in accounting policy for recognition of revenue from real estate activity. Up to the previous year, revenue arising from sale of undivided interest in underlying freehold land relating to flats / office premises was accounted when the agreement for sale of such flats / office premises was entered into. Effective April 1, 2011, the entire revenue from real estate activity is recognized on the percentage of completion method. Had the Company continued to follow the earlier accounting policy, revenue from real estate activity and construction costs would have been lower by Rs 146.22 crore and Rs13.92 crore respectively, the release from Revaluation Reserve would have been higher by Rs 205.81 crore and the net profit before tax would have been higher by Rs 73.51 crore.

ii) Note 33 regarding an agreement to sell certain apartments in the proposed residential towers being constructed at Island City Centre, pursuant to a Memorandum of Understanding entered into during the year with SCAL Services Ltd., an associate company, for a consideration of Rs 743.83 crores. The Company has recognized net revenue of Rs 341.32 crores from the said transaction, including an amount of Rs 103.67 crores released from Revaluation Reserve.

5) Further to our comments in the Annexure referred to in paragraph (3) above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) In our opinion and to the best of our information and according to the explanations given to us, they said accounts read with the significant accounting policies and notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

6) On the basis of written representations received from the Directors of the Company as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on March 31, 2012, from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the report of the Auditors to the members of The Bombay Dyeing and Manufacturing Company Limited on the accounts for the year ended March 31, 2012 (referred to in paragraph 3 of our report of even date)

1. (a) The Company has maintained records showing particulars, including quantitative details and situation of fixed assets. The records of certain assets need to be assimilated to make identification possible.

(b) The Company has a program for physical verification of fixed assets in a phased manner. In our opinion the period of verification is reasonable, having regards to the size of the Company and the nature of its assets. No material discrepancies were noticed in respect of the assets physically verified during the year.

(c) In our opinion, the fixed assets disposed off during the year are not substantial and therefore do not affect the going concern assumption.

2. (a) The inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The Company is generally maintaining proper records of inventory. The discrepancies noticed on verification between physical stock and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 except an interest free shareholders' deposit of Rs 15.22 crore to a joint venture company, as stated in Note 14 (a).

(b) As stated above, the said shareholders' deposit has been given free of interest.

(c) As stated in Note 14 (a), the repayment of the said deposit has been extended upto the year 2015 as permitted by Reserve Bank of India.

(d) No amount is overdue as the terms of repayment have been extended upto 2015.

(e) According to the information and explanation given to us, the Company has taken unsecured loans aggregating Rs 300 crore from three companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year is Rs 180.29 crore and the balance outstanding as at the year end was Rs 100 crore.

(f) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions on which the loans have been taken from companies listed in the register maintained under section 301 of the Companies Act, 1956 were not prima facie prejudicial to the interest of the company.

(g) In our opinion and as per the records examined by us, the payment of principal amount and interest thereon is regular.

4. In our opinion and according to the information and explanations given to us, the Company has internal control procedures which are generally adequate, commensurate with the size of the Company and nature of its business, with regard to purchases of inventory, fixed assets, and for the sale of goods and services. The Company is also implementing steps for further strengthening of the same. On the basis of our examination of the books and records and the information and explanations given to us, we have not come across any continuing failure to correct major weakness in the internal control system.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have generally been so entered.

(b) According to the information and explanation given to us, transactions in pursuance of such contracts or arrangements entered into the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices or at prices for which similar transactions have been made with other parties, except for the transactions where a comparison of prices could not be made since there was no similar transactions with other parties or transactions of a special nature where comparable alternative quotation were not available.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provision of sections 58A, 58AA or any other applicable provisions of the Companies Act,1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

7. In our opinion, the Company has an internal audit system, commensurate with the size and nature of its business.

8. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of Textile division and Polyester Staple Fibre division of the Company and are of the opinion that prima facie the prescribed records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of records for any other product or services of the Company.

9. (a) According to the records of the Company, undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise duty, Customs duty, Cess and other material statutory dues applicable to it have been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts were in arrears, as on 31st March 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise duty or cess which have not been deposited on account of any dispute, except as stated below :

No. Name of the statute Nature of Dues Amount Period to which Forum where dispute is pending (Rs.in crores) the amount relates

1 Income Tax Act, 1961 Tax Deducted at Source 0.03 2007-08 Commissioner of Income Tax - 0.02 2008-09 TDS (Appeals)

2 The Customs Act, 1962 Customs Duty 0.25 1997 Commissio ner of Customs (Appeals), Mumbai

3 The Central Excise Act, 1944 Excise Duty 0.10 1989-90 to Commissioners of Central Excise, 1995-96 Mumbai

Excise Duty 0.68 1997-98 to Customs, Excise and Service Tax 2000-01 Appellate Tribunal (CESTAT), Mumbai

Excise Duty 0.01 1999-00 to Customs, Excise and Service Tax 2000-01 Appellate Tribunal (CESTAT), Mumbai

Service Tax 0.77 April, 2003 to Customs, Excise and Service Tax March, 2006 Appellate Tribunal (CESTAT), Mumbai

10. The Company does not have any accumulated losses at the end of the financial year. Also, the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks, financial institution or debenture holders.

12. In our opinion and according to the information and explanations given to us, the Company has maintained adequate records where the company has granted loans and advances on the basis of security by way of pledge of shares.

13. The company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provision of clause 4 (xiii) of the said Order are not applicable to the Company.

14. According to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein where the Company is dealing or trading in shares, securities, debentures and other investments and such securities are held by the Company in its own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given any guarantees for loans taken by others from banks or financial institutions are not prima facie prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans have/are being applied for the purpose for which they were obtained.

17. In our opinion and according to the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, no funds raised on short term basis have been used for long term investment.

18. According to the information and explanations given to us, the company has made preferential allotment of shares to a company covered in the register maintained under section 301 of the Act. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the company.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise.

21. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For and on behalf of

Kalyaniwalla & Mistry

Chartered Accountants

Firm Reg No. 104607W

Viraf R. Mehta

Partner

Membership No: 32083

Place: Mumbai

Date: May 28, 2012

Mar 31, 2011

1) We have audited the attached Balance Sheet of The Bombay Dyeing and Manufacturing Company Limited as at March 31, 2011 and also the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

4) Without qualifying our report, we draw attention to the following:

i) Note 7 of Schedule 19 Notes to Accounts, regarding the sale of a portion of the proposed residential tower (2009-10: commercial building) under construction and recognition of revenue arising from sale of the undivided interest in the underlying freehold land amounting to Rs. 70.57 crore (2009-10: Rs. 256.29 crore) in the Profit and Loss Account with a corresponding release from revaluation reserve.

ii) Note 14 of Schedule 19 Notes to Accounts, regarding the managerial remuneration paid to one of the Jt. Managing Directors being in excess of the minimum remuneration under Schedule XIII to the Companies Act, 1956 and subject to the approval of the Central Government. The Company has made an application to the Central Government for such approval, which is pending.

5) Further to our comments in the Annexure referred to in paragraph (3) above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

ii) in the case of the Profit and Loss Account, of the Profit of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash fl ows for the year ended on that date.

6) On the basis of written representations received from the Directors of the Company as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualifi ed as on March 31, 2011, from being appointed as a Director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditor's Report

Annexure to the report of the Auditors to the members of The Bombay Dyeing and Manufacturing Company Limited on the accounts for the year ended March 31, 2011 (referred to in paragraph 3 of our report of even date)

(b) The Company has a program for physical verifi cation of fixed assets at periodic intervals. In our opinion the period of verifi cation is reasonable, having regards to the size of the Company and the nature of its assets. The reconciliation in respect of the fixed assets verifi ed during the year is in progress; discrepancies, if any, will be adjusted on completion of reconciliation.

(c) The fixed assets disposed off during the year are not substantial and therefore do not affect the going concern assumption.

2. (a) The inventory has been physically verifi ed by the management during the year. In our opinion, the frequency of verifi cation is reasonable.

(b) The procedures of physical verifi cation of inventories followed by the management are generally reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The Company is generally maintaining proper records of inventory. The discrepancies noticed on verifi cation between physical stock and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to Companies, fi rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 except an interest free shareholders' deposit of Rs.15.22 crore with a joint venture company, as stated in Note 10 of Schedule 19. Sub-clauses (b), (c) and (d) of cause 4 (iii) of the Order are not applicable to the Company.

(b) According to the information and explanation given to us, the Company has taken unsecured loans aggregating Rs. 190 crore from three companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year is Rs. 190 crore and the balance outstanding as at the year end was Rs. 10 crore.

(c) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions on which the loans have been taken from companies listed in the register maintained under section 301 of the Companies Act, 1956 were not prima facie prejudicial to the interest of the company.

(d) In our opinion and as per the records examined by us, the payment of principal amount and interest thereon is regular.

(b) According to the information and explanation given to us, transactions in pursuance of such contracts or arrangements entered into the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees fi ve lakhs in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices or at prices for which similar transactions have been made with other parties, except for the transactions where a comparison of prices could not be made since there was no similar transactions with other parties or transactions of a special nature where comparable alternative quotation were not available.

7. In our opinion, the Company has an internal audit system, commensurate with the size and nature of its business.

8. We have broadly reviewed, without carrying out a detailed examination, the books of account maintained by the company pursuant to the Notifi cation issued /order made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of the Textile and Polyester Staple Fibre divisions of the Company and are of the opinion that prima facie the prescribed records have been maintained and the prescribed accounts are in the process of being made up.

9. (a) According to the records of the Company, undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise duty, Customs duty, Cess and other material statutory dues applicable to it have been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts were in arrears, as on 31st March 2011 for a period of more than six months from the date they became payable.

No. Name of the statute Nature of Dues Amount Period to which Forum where dispute is pending (Rs. in crores) the amount relates

1 Income Tax Act, 1961 Tax Deducted at 3.21 2007-08 Commissioner of Income Tax - TDS Source 3.86 2008-09 (Appeals)

2 Bombay Sales Tax Act, Sales Tax 4.95 2004-05 Maharashtra Sales Tax Tribunal, 1959. Mumbai

3 Central Sales Tax Act, Sales Tax 0.67 2004-05 Maharashtra Sales Tax Tribunal, 1956. Mumbai

4 The Customs Act, 1962 Customs Duty 0.64 1989 Deputy Commissioner of Customs, Nhava Sheva Customs Duty 0.25 1997 Commissioner of Customs(Appeals), Mumbai

5 The Central Excise Act, Excise Duty 0.10 1989-90 to 1995-96 Commissioners of Central Excise, 1944 Mumbai

Excise Duty 0.68 1997-98 to 2000-01 Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai

Excise Duty 0.01 1999-00 to 2000-01 Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai

Service Tax 0.77 April, 2003 to Customs, Excise and Service Tax March, 2006 Appellate Tribunal (CESTAT), Mumbai

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks, financial institution or debenture holders.

13. The company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provision of clause 4 (xiii) of the said Order are not applicable to the Company.

14. According to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein where the Company is dealing or trading in shares, securities, debentures and other investments and such securities are held by the Company in it's own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

16. In our opinion and according to the information and explanations given to us, the term loans have/are being applied for the purpose for which they were obtained.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise.

21. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For and on behalf of

Kalyaniwalla & Mistry

Chartered Accountants

Firm Reg. No. 104607W

Viraf R. Mehta

Partner

Membership No: 32083

Place: Mumbai

Date: May 24, 2011

Mar 31, 2010

1) We have audited the attached Balance Sheet of The Bombay Dyeing and Manufacturing Company Limited as at March 31, 2010 and also the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

3) As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4) Without qualifying our report, we draw attention to the following:

Note 7 of Schedule 19 Notes to Accounts, regarding the sale of the commercial building under construction to its wholly owned subsidiary (up to March 16, 2010)/ associate and recognition of revenue there against of Rs. 423.54 crores (including revenue from the undivided interest in the underlying freehold land therein amounting to Rs. 256.29 crores in line with the companys stated accounting policy) in the Profit and Loss Account. The Company has partly divested its investment in the subsidiary company in March 2010 and it has ceased to be a subsidiary from that date. The said subsidiary has been excluded from consolidation, based on managements representation that control over it was temporary, i.e. being held exclusively with a view to its subsequent divestment in the near future.

5) Furtherto ourcomments in the Annexure referred to in paragraph (3) above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

6) On the basis of written representations received from the Directors of the Company as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on March 31, 2010, from being appointed as a Director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT

Annexure to the report of the Auditors to the members of The Bombay Dyeing and Manufacturing Company Limited on the accounts for the year ended March 31, 2010 (referred to in paragraph 3 of our report of even date)

1. (a) The Company has maintained records showing particulars,

including quantitative details and situation of fixed assets. The records of certain assets need to be assimilated to make identification possible.

(b) The Company has a program for physical verification of fixed assets at periodic intervals. In our opinion the period of verification is reasonable, having regard to the size of the Company and the nature of its assets. The discrepancies noticed on such verification were not material and the same have been properly dealt with in the books of account.

(c) The fixed assets disposed off during the year are not substantial and therefore do not affect the going concern assumption.

2. (a) The inventory has been physically verified by the

management during the year. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the Company and nature of its business.

3. (a) The Company had given unsecured loan to a company

covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year is Rs. 0.50 crore. The loan has been repaid and there is no balance outstanding at the year end. The company has also placed an interest free shareholders deposit of Rs. 15.22 crore with a joint venture company, as stated in Note 10 of Schedule 19.

(b) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions on which the loans have been granted to companies listed in the register maintained under section 301 of the Companies Act, 1956 were not prima facie prejudicial to the interest of the company, at the time when loans were granted.

(c) In our opinion and as per the records examined by us the receipt of the principal amount and interest thereon has been regular.

(d) According to the information and explanation given to us, there is no overdue amount for more than rupees one lakh.

(e) According to the information and explanation given to us, the Company has taken unsecured loans aggregating Rs. 117.50 crores from a company covered in the register maintained under section 301 of the Companies Act, 1956. The loans have been repaid and there is no balance outstanding at the year end.

(g) In our opinion and as per the records examined by us, the payment of principal amount and interest thereon is regular.

4. In our opinion and according to the information and explanations given to us, the Company has internal control procedures which are generally adequate, commensurate with the size of the Company and nature of its business, with regard to purchases of inventory, fixed assets, and for the sale of goods and services. The Company is also implementing steps for further strengthening of the same. Further, on the basis of our examination of the books and records and the information and explanations given to us, we have not come across any continuing failure to correct major weakness in the internal control system.

5. (a) According to the information and explanations given to

us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have generally been so entered.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provision of sections 58A, 58AA or any other applicable provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

7. In our opinion, the Company has an internal audit system, commensurate with the size and nature of its business.

8. We have broadly reviewed, without carrying out a detailed examination, the books of accounts maintained by the company pursuant to the Notification issued /order made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 in respect of Textile division of the Company and are of the opinion that prima facie the prescribed records have been maintained and the prescribed accounts are in the process of being made up.

9. (a) According to the records of the Company, undisputed

statutory dues including Provident fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise duty, Customs duty, Cess, and other material statutory dues applicable to it have been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts were in arrears, as on 31st March 2010 for a period of more than six months from the date they became payable.

No. Name of the statute Nature of Dues Amount (Rs. In crores) 1 The Customs Act, 1962 Customs Duty 0.64 Customs Duty 0.25 Customs Duty 0.13 2 The Centra! Excise Act, Excise Duty 0.31 1944 Excise Duty 0.16 Excise Duty 0.68 Excise Duty 0.08

No. Name of the statute Period to which the Forum where dispute is amount relates Pending 1 The Customs Act, 1962 1989 Deputy Commissioner of Customs, Nhava Sheva 1997 Commissioner of Customs (Appeals), Mumbai 1992-93 Commissioner of Customs Bond Department, Mumbai 2 The Centra! Excise Act, 1985-86 to 2003-04 Customs, Excise and Service Tax 1944 Appellate Tribunal (CESTAT), Mumbai 1989-90 to 1995-96 Commissioners of Central Excise, Mumbai 1997-98 to 2000-01 Customs, Excise and Service Tax Appellate Tribunal(CESTAT), Mumbai 1999-00 to 2000-01 Customs, Excise and Service Tax Appellate Tribunal(CESTAT), Mumbai

10. The Company does not have any accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by our audit however, a cash loss of Rs. 138.89 crores was incurred during the immediately preceding financial year,

11. In our opinion and according to the information and explanations given to us. the Company has no; defaulted in repayment of dues to banks, financial institution or debenture holders.

13. The company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, the provision of clause 4 (xiii) of the said Order are not applicable to the Company.

16. In our opinion and according to the information and explanations given to us, the term loans have/are being applied for the purpose for which they were obtained.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise.

21. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For and on behalf of Kaiyaniwalla & Mistry Chartered Accountants Firm Reg. No. 104607W Viraf R. Merita Partner Membership No: 32083 Place: Mumbai Date: May 24, 2010

Mar 31, 2009

1) We have audited the attached Balance Sheet of The Bombay Dyeing and Manufacturing Company Limited as at March 31, 2009 and also the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Corripanys management. Our responsibility is to express an opinion on these financial statements based on our audit.

4) Without qualifying our report, we draw attention to the following:

i) Note 9 of Schedule 19 Notes to Accounts, regarding the sale of a portion of the commercial building under construction to its wholly owned subsidiary and recognition of revenue there against of Rs. 235.02 crore (including revenue from the undivided interest in the underlying freehold land therein amounting to Rs. 193.34 crore) in the Profit and Loss Account. Attention is also drawn to the exclusion of the said subsidiary from consolidation, based on managements representation that control over it is temporary, i.e. being held exclusively with a view to its subsequent divestment in the near future.

ii) Note 19 (iii) of Schedule 19 Notes to Accounts, regarding the adoption of the principles of hedge accounting enunciated in Accounting Standard (AS) 30 - Financial Instruments Recognition and Measurement with effect from April 1, 2008, in respect of derivative transactions entered into to hedge currency risk. Accordingly, the unrealized losses amounting to Rs. 37.69 crore on such derivative transactions which qualify as effective hedges have been recorded in the Hedging Reserve account. The loss for the year is lower to that extent.

5) Further to our comments in the Annexure referred to in paragraph (3) above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the n^es thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009;

ii) in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

6) On the basis of written representations received from the Directors of the Company as on March 31, 2009, and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on March 31, 2009, from being appointed as a Director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956. ANNEXURE TO THE AUDITORS REPORT

Annexure to the report of the Auditors to the members of The Bombay Dyeing and Manufacturing Company Limited on the accounts for the year ended March 31, 2009 (referred to in paragraph 3 of our report of even date)

1. (a) The Company has maintained proper records showing

full particulars, including quantitative details and situation of fixed assets up to the previous year. The particulars of additions during the year are in the process of being updated.

(b) A major portion of the assets has been physically verified by the management during the year, which is in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. The reconciliation between the book records and physical inventory of assets verified is still in progress, in view of which, we are unable to report on the discrepancies, if any.

(c) The fixed assets disposed off during the year are not substantial and therefore do not affect the going concern assumption.

2. (a) The inventory has been physically verified by the

management during the year. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the Company and nature of its business.

3. (a) The Company had given unsecured loans to two companies

covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year is Rs. 7.5 crore. Of the said loans, one loan amounting to Rs.3.5 crore which was provided for in earlier years, has been written off and the year-end balance of the other loan is Rs. 0.5 crore. The company has also placed an interest free shareholders deposit of Rs.15.22 crore with a joint venture company, as stated in Note 12 of Schedule 19.

(c) As explained to us, in respect of one of the companies, the amount of Rs 3.5 crore has not been recovered and has been written off during the year and the other company has been regular in payment of interest, where the principle amount of Rs 0.5 crore is repayable on call.

(d) According to the information and explanation given to us, except for the loan of Rs. 3.5 crores referred in paragraph 3 (c) above, which has been written off during the year, there is no overdue amount for more than rupees one lakh.

(e) According to the information and explanation given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. In view of the foregoing, the question of reporting

on clauses 4 (iii) (f) and 4 (iii) (g) of the said Order does arise.

4. In our opinion and according to the information and explanations given to us, the Company has internal control procedures which are generally adequate, commensurate with the size of the Company and nature of its business, with regard to purchases of inventory, fixed assets, and for the sale of goods and services, however the Company is implementing steps for further strengthening of the same. Further, on the basis of our examination of the books and records and the information and explanations given to us, we have not come across any continuing failure to correct major weakness in the internal control system.

5. (a) According to the information and explanations given to

7. In our opinion, the Company has an internal audit system, commensurate with the size and nature of its business.

9. (a) According to the records of the Company, undisputed

statutory dues including Provident fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise duty, Customs duty, Cess, and other material statutory dues applicable to it have been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts were in arrears, as on 31s1 March 2009 for a period of more than six months from the date they became payable.

No. Name of the statute Nature of Dues Amount (Rs. in crores)

1 The Income Tax Act, 1961 Tax deducted at 2.64 source

2 The Wealth Tax Act, 1957 Wealth Tax 023

3 The Customs Act, 1962 Customs Duty 0.64 Customs Duty 0.25 Customs Duty 0.13

4 The Central Excise Act, Excise Duty 0.31 1944 Excise Duty 0.16 Excise Duty 0.25 Excise Duty 0.68 Excise Duty 0.08 Excise duty 0.01

Period to which the Forum where dispute is pending amount relates

A.Y. 1995-96 Income Tax Appellate Tribunal, Mumbai

A.Y. 1993-94 to A.Y. Income Tax Appellate Tribunal, 1998-99 Mumbai

1989 Deputy Commissioner of Customs, Nhava Sheva 1997 Commissioner of Customs(Appeals), Mumbai

1992-93 Commissioner of Customs Bond Department, Mumbai

1985-86 to 2003-04 Customs, Excise and Service Tax Appellate Tribunal(CESTAT), Mumbai

1989-90 to 1995-96 Commissioners of Central Excise, Mumbai

1998-99 High Court, Mumbai

1997-98 to 2000-01 Customs, Excise and Service Tax Appellate Tribunal(CESTAT), Mumbai

1999-00 to 2000-01 Customs, Excise and Service Tax Appellate Tribunal(CESTAT), Mumbai

2005-06 Assistant Commissioner of Customs, Mumbai

10. The Company does not have any accumulated losses at the end of the financial year. The company has incurred a cash loss of Rs. 138.89 crore during the financial year covered by our audit but not in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks, financial institution or debenture holders.

13. The company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, the provision of clause 4 (xiii) of the said Order are not applicable to the Company.

16. In our opinion and according to the information and explanations given to us, the term loans have/are being applied for the purpose for which they were obtained.

17. In our opinion and according to the information and explanations given to us and on an overall examination of the balance sheet

of the Company, in our opinion, no funds raised on short term basis have been used for long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. According to the information and explanation given to us, the Company had issued debentures aggregating Rs. 30 crore during the previous year, which have been repaid during the year; however no securities or charge was created in respect of the same.

20. The Company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise.

21. Based on the audit procedures performed and information and explanations given by the management, we report that the Company has based on certain acts of omission and commission detected, filed suits against an Executive Director of the Company in the High Court of Judicature at Mumbai and the matter is subjudice. Other than this no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of Kalyaniwalla & Mistry Chartered Accountants Viraf R. Mehta Partner Membership No: 32083

Place: Mumbai Date: June 30, 2009

Mar 31, 2008

1. We have audited the attached balance sheet of The Bombay Dyeing and Manufacturing Company Limited, as at 31st March, 2008, and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our report, we invite attention to Note 13 on Schedule 19 regarding treatment of the Textile Processing Plant as a Continuous Process Plant.

5. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

(i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) in our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

(iii) the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

(iv) in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(v) on the basis of written representations received from the directors, as on 31st March, 2008, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2008 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the balance sheet, of the state of affairs of the company as at 31st March, 2008;

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

ANNEXURE TO THE REPORT OF THE AUDITORS TO THE MEMBERS OF THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2008 (referred to in paragraph 3 of our report of even date)

(i) (a) The company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) A major portion of the assets has been physically verified by the management during the year, which in our opinion is reasonable, having regard to the size of the company and the nature of its assets. To the best of our knowledge, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year are not substantial and therefore the question of reporting on Clause 4(i)(c) of the Companies (Auditors Report) Order, 2003 (hereinafter referred to as the said Order) does not arise.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are generally reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is generally maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The company has given loans to two companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year as well as the year end balance of such loans is Rs. 7.50 crores. The company has also placed an interest free shareholders deposit of Rs. 15.22 crores with a joint venture company, as stated in Note 4 on Schedule 19.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which loans have been granted to companies listed in the register maintained under section 301 of the Companies Act, 1956 were not, prima facie, prejudicial to the interest of the company, at the time when the loans were granted.

(c) As explained to us, in respect of one of the company, the amount of Rs. 3.50 crores has not been recovered for which a provision has been made in the books of account and the other company has been regular in payment of interest, where the principal amount of Rs. 4.00 crores is repayable on call.

(d) According to the information and explanations given to us, except for the loan of Rs. 3.50 crores referred in paragraph (iii) (c) above for which a provision has been made in the books of account, there is no overdue amount for more than rupees one lakh.

(e) According to the information and explanations given to us, the company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. In view of the foregoing, the question of reporting on Clauses 4(iii)(f) and 4(iii)(g) of the said Order does not arise.

(iv) In our opinion and according to the information and explanations given to us, the internal control system is generally commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have generally been so entered.

(b) According to the information and explanations given to us, transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices or at prices for which similar transactions have been made with other parties, except for transactions where a comparison of prices could not be made since there were no similar transactions with other parties or transactions of a special nature where comparable alternative quotations were not available

(vi) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of sections 58A 58AA or any other applicable provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(vii) In our opinion, the company has an internal audit system commensurate with the size and the nature of its business.

(viii) We have broadly reviewed, without carrying out a detailed examination, the books of account maintained by the company pursuant to the Notification issued/ Order made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of Polyester Division and Textile Division of the Company and are of the opinion that prima facie the prescribed records have been maintained and the prescribed accounts are in the process of being made up.

(ix) (a) According to the records of the company, undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it have been regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales tax, customs duty, excise duty, cess and other material statutory dues applicable to it were in arrears, as at 31st March, 2008, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of income-tax, wealth-tax, service tax, sales tax, customs duty, excise duty and cess which have not been deposited on account of any dispute, except as stated below:

Sr. Nature of the dues Amount no. (Rs. in Crores)

1 The Income-tax Act, 1961: Tax Deducted at source 2.64

2 The Wealth-tax Act, 1957: Wealth Tax 0.23

3 The Customs Act, 1962: Customs Duty 0.64

Customs Duty 0.25

Customs Duty 0.13

4 The Central Excise Act, 1944:

Excise Duty 0.31 Excise Duty 0.10 Excise Duty 0.25 Excise Duty 0.68 Excise Duty 0.08 Excise Duty 0.01

Period to which Forum where dispute is the amount pending relates

A. Y. 1995-96 Income Tax Appellate Tribunal, Mumbai A. Y. 1993-94 to Income Tax Appellate Tribunal, Mumbai A. Y. 1998-99 1989 Deputy Commissioner of Customs, Nhava Sheva

1997 Commissioner of Customs (Appeals), Mumbai

1992-93 Commissioner of Customs, Bond Department, Mumbai

1985-86 to Customs, Excise and Service Tax Appellate 2003-04 Tribunal (CESTAT), Mumbai

1989-90 to Commissioner of Central Excise, Mumbai 1995-96

1998-99 High court, Mumbai 1997-98 to Customs, Excise and Service Tax Appellate 2000-01 Tribunal (CESTAT), Mumbai

1999-00 to Customs, Excise and Service Tax Appellate 2000-01 Tribunal (CESTAT), Mumbai

2005-06 Assistant Commissioner of Customs, Mumbai

(x) The company does not have any accumulated losses at the end of the financial year. Also, the company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks, financial institutions or debenture holders.

(xii) In our opinion and according to the information and explanations given to us, the company has maintained adequate records where the company has granted loans and advances on the basis of security by way of pledge of shares.

(xiii) The company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4(xiii) of the said Order are not applicable to the company.

(xiv) According to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein, where the company is dealing or trading in shares, securities, debentures and other investments, and such securities are held by the company in its own name, except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

(xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantees for loans taken by others from banks or financial institutions are not prima facie prejudicial to the interest of the company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been / are being applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the company has used funds of Rs. 209.89 crores raised on short-term basis for long-term investment.

(xviii) The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the question of reporting on whether the price at which such shares have been issued is prejudicial to the interest of the company, does not arise.

(xix) According to the information and explanations given to us, the company had issued during the year debentures aggregating Rs. 1120.00 crores (amount outstanding as at 31st March, 2008: Rs.30.00 crores). The security or charge in respect of such debentures has not been created. Debentures aggregating Rs.1100.00 crores have been repaid during the year.

(xx) The company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For A. F. Ferguson & Co. Chartered Accountants

H. L. Shah Partner Mumbai: 30th June,2008 Membership No. 33590

Mar 31, 2007

1. We have audited the attached balance sheet of The Bombay Dyeing and Manufacturing Company Limited, as at 31st March, 2007, and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

(i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) in our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

(iii) the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

(v) on the basis of written representations received from the directors, as on 31st March, 2007, and taken on record by the Board of Directors, we report that none of the directors is disqualified as OR 31st March, 2007 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(a) in the case of the balance sheet, of the state of affairs of the company as at 31st March, 2007;

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

For A. F. FERGUSON & CO. Chartered Accountants

H. L. SHAH Partner Membership No. 33590

MUMBAI : 24th May, 2007

ANNEXURE TO THE REPORT OF THE AUDITORS TO THE MEMBERS OF THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2007 (referred to in paragraph 3 of our report of even date)

(i) (a) The company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(c) The fixed assets disposed off during the year are not substantial and therefore the question of reporting on Clause 4(i)(c) of the Companies (Auditor's Report) Order, 2003 (hereinafter referred to as the said Order) does not arise.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The company has given loans to two companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year as well as the year end balance of such loans is Rs. 7.50 crores. The company has also placed an interest free shareholders' deposit of Rs. 15.22 crores with a joint venture company, as stated in Note 4 on Schedule 19.

(iv) In our opinion and according-to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(vi) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of sections 58A, 58AA or any other applicable provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(vii) In our opinion, the company has an internal audit system commensurate with the size and the nature of its business.

(viii) We have broadly reviewed, without carrying out a detailed examination, the books of account maintained by the company pursuant to the Order made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the Textile Division and are of the opinion that prima facie the prescribed records have been maintained and the prescribed accounts are in the process of being made up.

(ix) (a) According to the records of the company, undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales tax, wealth-tax, service tax, customs duty, excise duty and other material statutory dues applicable to it have been regularly deposited with the appropriate authorities.

Further, since the Central Government has not yet prescribed the amount of cess payable under section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise in depositing the same by the company.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, service tax, sales tax, customs duty and excise duty were in arrears, as at 31st March, 2007, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of income-tax, wealth-tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any dispute, except as stated below:

Sr. Nature of the dues Amount Period to which no. (Rs. in Crores) the amount relates

1 The Income-tax Act, 1961: Tax Deducted at source 2.64 A. Y. 1995-96

2 The Wealth-tax Act, 1957: Wealth Tax 0.23 A. Y. 1993-94 to A. Y. 1998-99 3 The Customs Act, 1962: Customs Duty 0.64 1989 Customs Duty 0.25 1997 Customs Duty 0.13 1992-93

4 The Central Excise Act, 1944: Excise Duty 0.36 1985-86 to 2003-04 Excise Duty 0.01 2005-06 Excise Duty 0.10 1989-90 to 1995-96 Excise Duty 0.25 1998-99 Excise Duty 0.68 1997-98 to 2000-01 Excise Duty 0.20 1999-00 to 2000-01

Sr. Forum where dispute is pending No.

1. Income Tax Appellate Tribunal, Mumbai

2. Income Tax Appellate Tribunal, Mumbai

3. Deputy Commissioner of Customs, Nhava Sheva Commissioner of Customs (Appeals), Mumbai Commissioner of Customs, Bond Department, Mumbai

4. Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Assistant Commissioner of Customs, Mumbai Commissioner of Central Excise, Mumbai High court, Mumbai Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks, financial institutions or debenture holders.

(xiii) The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of Clause 4(xiii) of the said Order are not applicable to the company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been/are being applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, in our opinion, generally no funds raised on short-term basis have been used for long-term investment.

(xix) According to the information and explanations given to us, the company had issued during the year debentures aggregating Rs.515.00 crores (amount outstanding as at 31st March, 2007: Rs.10.00 Crores). The security or charge in respect of such debentures has not been created. Debentures aggregating Rs.505.00 crores have been repaid during the year.

(xx) The company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For A. F. FERGUSON & CO. Chartered Accountants

H. L. SHAH Partner Membership No. 33590

MUMBAI : 24th May, 2007

Mar 31, 2006

1. We have audited the attached balance sheet of The Bombay Dyeing and Manufacturing Company Limited, as at 31st March, 2006, and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that;

(i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) in our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

(iii) the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

(v) on the basis of written representations received from the directors, as on 31st March, 2006, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2006 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(a) in the case of the balance sheet, of the state of affairs of the company as at 31st March, 2006;

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

For A. F. FERGUSON & CO. Chartered Accountants R. K. HIRANANDANI Partner Membership No. 36920

MUMBAI : 30th May, 2006

ANNEXURE TO THE REPORT OF THE AUDITORS TO THE MEMBERS OF THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2006 (referred to in paragraph 3 of our report of even date)

(i) (a) The company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(c) The fixed assets disposed off during the year are not substantial and therefore the question of reporting on clause 4(i)(c) of the Companies (Auditor's Report) Order, 2003 (hereinafter referred to as the said Order) does not arise.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The company has given loans to four companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year was Rs. 22.50 crores and the year end balance of such loans was Rs. 7.50 crores. The company has also placed an interest free shareholders' deposit of Rs. 15.22 crores with a joint venture company, as stated in Note 4 on Schedule 18.

(c) As explained to us, in respect of one of the companies, an amount of Rs. 3.50 crores has not been recovered for which a provision has been made in the books of account and the other companies have been regular in repaying the principal amounts as stipulated or as rescheduled, where applicable and have been regular in the payment of interest.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to.be entered into the register maintained under section 301 of the Companies Act, 1956 have generally been so entered.

(vii) In our opinion, the company has an internal audit system commensurate with the size and the nature of its business.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, service tax, sales tax, customs duty and excise duty were in arrears, as at 31st March, 2006, for a period of more than six months from the date they became payable.

Sl. Nature of the dues Amount Period to which no. (Rs. in Crores) the amount relates 1 The Income-tax Act, 1961: Tax Deducted at source 2.64 A. Y. 1995-96

2 The Wealth-tax Act, 1957: Wealth Tax 0.23 A. Y. 1993-94 to A. Y. 1998-99

3 The Customs, Act, 1962: Customs Duty 0.64 1989 Customs Duty 0.25 1997

4 The Central Excise Act, 1944: Excise Duty 0.36 1985-86 to 2003-04 Excise Duty 0.10 1989-90 to 1995-96 Excise Duty 1.12 1995-96 to 2000-01 Excise Duty 0.61 1999-00 to 2000-01

Sr. No. Forum where dispute is pending

1. Income Tax Appellate Tribunal, Mumbai

2. Income Tax Appellate Tribunal, Mumbai

3. Deputy Commissioner of Customs, Nhava Sheva Commissioner of Customs (Appeals), Mumbai

4. Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Commissioner of Central Excise, Mumbai Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Deputy Commissioner of Central Excise, Mumbai

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks, financial institutions or debenture holders.

(xiii) The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the said Order are not applicable to the company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been/are being applied for the purpose for which they were raised.

(xix) According to the information and explanations given to us, the company has issued during the year debentures aggregating Rs. 210.00 crores which have been repaid prior to the year end. The security or charge in respect of such debentures had not been created.

(xx) The company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For A. F. FERGUSON & CO. Chartered Accountants R. K. HIRANANDANI Partner Membership No. 36920

MUMBAI: 30th May, 2006

Mar 31, 2005

1. We have audited the attached balance sheet of The Bombay Dyeing and Manufacturing Company Limited, as at 31st March, 2005, and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 and amendment thereto by the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1966, we enclose in the annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books.

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

(v) On the basis of written representations received from the directors, as on 31st March, 2005, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2005 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the balance sheet, of the state of affairs of the company as at 31st March, 2005;

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

For A. F. FERGUSON & CO. Chartered Accountants

R. K. HIRANANDANI Partner MUMBAI: 8th June, 2005 Membership No. 36920

ANNEXURE TO THE REPORT OF THE AUDITORS TO THE MEMBERS OF THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2005 (referred to in paragraph 3 of our report of even date)

(i) (a) The company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(c) The fixed assets disposed off during the year are not substantial and therefore the question of reporting on clause 4(i)(c) of the Companies (Auditor's Report) Order, 2003 and amendment thereto by the Companies (Auditor's Report) (Amendment) Order, 2004 (hereinafter referred to as the said Order) does not arise.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed, by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The company has given loans to two companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year as well as the year end balance of such loans is Rs. 7.50 crores. The company has also placed an interest free shareholders' deposit of Rs. 15.22 crores with a joint venture company, as stated in Note 4 on Schedule 18.

(c) As explained to us, in respect of one of the companies, the amount of Rs. 3.50 crores has not been recovered for which a provision has been made in the books of account and the other company has been regular in the payment of interest, where the principal amount of Rs. 4.00 crores is repayable on call.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with, regard to purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of.the Companies Act, 1956 have generally been so entered.

(b) According to the information and explanations given to us, transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices or at prices for which similar transactions have been made with other parties, except for transactions of a special nature where comparable alternative quotations were not available or where a comparison of prices could not be made since there were no similar transactions with other parties.

(vi) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of sections 58A, 58AA or any other applicable provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 19.75 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(vii) In our opinion, the company has an internal audit system commensurate with the size and the nature of its business.

(viii) We have broadly reviewed, without carrying out a detailed examination, the books of account maintained by the company pursuant to the Order made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of the Textile Division and are of the opinion that prima facie the prescribed records have been maintained and the prescribed accounts are in the process of being made up.

(ix) (a) According to the records of the company, undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it have been regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March, 2005, for a period of more than six months from the date they became payable.

(ix) (c) According to the information and explanations given to us, there are no dues of income-tax, wealth-tax, service tax, sales tax, customs duty, excise duty and cess which have not been deposited on account of any dispute, except as stated below:

Sr. Nature of the dues Amount Period to which no. (Rs. in Crores) the amount relates

1. The Income Tax Act, 1961: Tax Deducted at source 2.64 A. Y. 1995-96

2. The Wealth Tax Act, 1957: Wealth Tax 0.23 A. Y. 1993-94 to A. Y. 1998-99

3. The Customs Act, 1962: Customs Duty 0.64 1989

Customs Duty 0.25 1997 4. The Central Excise Act, 1944:

Excise Duty 1.77 1985-86 to 2003-04 Excise Duty 0.10 1989-90 to 1995-96 Excise Duty 1.12 1995-96 to 2000-01 Excise Duty 0.61 1999-00 to 2000-01 Penalty 0.07 1999-00 to 2000-01 Excise Duty 1.88 2001-02 to 2002-03

Sr. Nature of the dues Forum where dispute is no. pending

1. The Income Tax Act, 1961: Tax Deducted at source Income Tax Appellate Tribunal, Mumbai

2. The Wealth Tax Act, 1957: Wealth Tax Income Tax Appellate Tribunal, Mumbai 3. The Customs Act, 1962: Customs Duty Deputy Commissioner of Customs, Nhava Sheva

Customs Duty Commissioner of Customs (Appeals), Mumbai

4. The Central Excise Act, 1944: Excise Duty Commissioner of Central Excise (Appeals), Mumbai

Excise Duty Commissioner of Central Excise, Mumbai Excise Duty Central Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Excise Duty Deputy Commissioner of Central Excise, Mumbai Penalty CESTAT, Mumbai Excise Duty Commissioner of Central Excise (Appeals), Mumbai

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks, financial institutions or debenture holders,

(xiii) The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the said Order are not applicable to the company,

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been/are being applied for the purpose for which they were raised,

(xix) According to the information and explanations given to us, the company had issued during the year debentures aggregating Rs. 445.00 crores (amount outstanding as at 31st March, 2005: Rs.65.00 crores). The security or charge in respect of such debentures has not been created. Debentures aggregating Rs. 455.00 crores have been repaid during the year,

(xx) The company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise,

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For A. F. FERGUSON & CO. Chartered Accountants R. K. HIRANANDANI Partner MUMBAI: 8th June, 2005 Membership No. 36920

Mar 31, 2004

1. We have audited the attached balance sheet of The Bombay Dyeing and Manufacturing Company Limited, as at 31st March, 2004, and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books.

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account.

(v) On the basis of written representations received from the directors, as on 31st March, 2004, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2004 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(a) in the case of the balance sheet, of the state of affairs of the company as at 31st March, 2004;

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

For A. F. FERGUSON & CO. Chartered Accountants

R. K. HIRANANDANI Partner MUMBAI: 11th May, 2004 Membership No. 36920

ANNEXURE TO THE REPORT OF THE AUDITORS TO THE MEMBERS OF THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2004 (referred to in paragraph 3 of our report of even date)

(i) (a) The company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The company has given loans to four companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year was Rs. 7.75 crores and the year-end balance of such loans is Rs. 7.50 crores. The company has also placed an interest free shareholders' deposit of Rs. 15.22 crores with a joint venture company, as stated in Note 4 on Schedule 18. The company has not taken any loans from companies, firms or other parties covered in the said register.

(c) As explained to us, except in respect of one of the companies, where the amount of Rs. 3.50 crores has not been recovered for which a provision has been made in the books of account during the previous year, the parties have repaid the principal amounts as stipulated, where applicable, and have been regular in the payment of interest.

(d) According to the information and explanations given to us, except for the loan referred in paragraph (iii) (c) above for which a provision has been made in the books of account, there is no overdue amount for more than rupees one lakh.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have generally been so entered.

(b) According to the information and explanations given to us, transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices or at prices for which similar transactions have been made with other parties, except for transactions of a special nature where comparable alternative quotations were not available or where a comparison of prices could not be made since there were no similar transactions with other parties.

(vi) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to. the deposits accepted from the public. No order has been passed by the Company Law Board.

(vii) In our opinion, the company has an internal audit system commensurate with the size and the nature of its business.

(viii) We have broadly reviewed, without carrying out a detailed examination, the books of account maintained by the company pursuant to the Order made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of the Textile Division and are of the opinion that prima facie the prescribed records have been maintained and the prescribed accounts are in the process of being made up.

(ix) (a) According to the records of the company, undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales tax, wealth-tax, customs duty, excise duty, cess and other material statutory dues applicable to it have generally been regularly deposited with the appropriate authorities, though there have been delays in a few cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March, 2004, for a period of more than six months from the date they became payable.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks, financial institutions or debenture holders.

(xiii) The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the said Order are not applicable to the company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, in our opinion, no funds raised on short-term basis have been used for long-term investment. Also, no long-term funds have been used to finance short-term assets except permanent working capital.

(xix) According to the information and explanations given to us, the company had issued during the year debentures aggregating Rs. 434.00 crores (amount outstanding as at 31" March, 2004: Rs.75.00 crores). The security in respect of such debentures has not been created. Debentures aggregating Rs. 359.00 crores have been repaid during the year.

(xx) The company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For A. F. FERGUSON & CO. Chartered Accountants

R. K. HIRANANDANI Partner MUMBAI: 11th May, 2004 Membership No. 36920

Mar 31, 2003

1. We have audited the attached balance sheet of The Bombay Dyeing and Manufacturing Company Limited, as at 31st March, 2003, and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books.

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account.

(v) On the basis of written representations received from the directors, as on 31st March, 2003, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2003 from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

(a) in the case of the balance sheet, of the state of affairs of the company as at 31st March, 2003;

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

For A. F. FERGUSON & CO. Chartered Accountants R. K. HIRANANDANI Partner Mumbal, 11th June, 2003 Membership No. 36920

ANNEXURE TO THE REPORT OF THE AUDITORS TO THE MEMBERS OF THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2003 (referred to in paragraph 3 of our report of even date)

1. The company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets. A major portion of the assets has been physically verified by the management during the year, which in our opinion is reasonable having regard to the size of the company and the nature of its assets. To the best of our knowledge, no material discrepancies have been noticed on such verification.

2. None of the fixed assets of the company has been revalued during the year.

3. The stocks of finished goods, stores, spare parts and raw materials have been physically verified by the management at reasonable intervals during the year.

4. In our opinion and according to the information and explanations given to us; the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

5. The discrepancies noticed on verification between the physical stocks and the book records were not material.

6. In our opinion and on the basis of our examination of the stock records, the valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year.

7. In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed In the registers maintained under section 301 of the Companies Act, 1956 are prima facie not prejudicial to the interests of the company. We are informed that there are no companies under the same management as this company within the meaning of section 370(1 B) of the Companies Act, 1956.

8. In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which loans have been granted to companies, firms or other parties listed in the registers maintained under section 301 of the Companies Act, 1956 are prima facie not prejudicial to the interests of the company.

9. According to the information and explanations given to us, in respect of loans or advances in the nature of loans given by the company, where stipulations have been made, the parties are generally repaying the principal amounts as stipulated and are generally regular in the payment of interest, or as rescheduled, except in the case of certain parties where, as explained to us, reasonable steps have been taken by the company for the recovery of the principal and the interest.

10. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to the purchase of stores, raw materials including components, plant and machinery, equipment and other assets and with regard to the sale of goods.

11. In our opinion and according to the information and explanations given to us, in respect of the transactions of purchase of goods and materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the registers maintained under section 301 of the Companies Act, 1956 and aggregating during the year to Rs. 50,000 or more in respect of each party; transactions of purchases have been made at prices which are reasonable having regard to the prevailing market price for such goods or prices at which transactions for similar goods have been made with other parties, except that for purchase of items of a special nature, comparable alternative quotations were not available, and as regards sales, a comparison of prices could not be made, as according to the information given to us, there were no transactions for similar goods with other parties.

12. As explained to us, the company has a regular procedure for the determination of unserviceable or damaged stores, raw materials and finished goods. Adequate provision has been made in the accounts for the loss arising on the items so determined.

13. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public.

14. In our opinion and according to the information and explanations given to us, the company is maintaining reasonable records for the sale and disposal of realisable by-products and scrap.

15. In our opinion, the company has an internal audit system commensurate with the size and the nature of its business.

16. We have broadly reviewed, without carrying out a detailed examination, the books of account maintained by the company pursuant to the Order made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the Textile Division and are of the opinion that prima facie the prescribed records have been maintained and the prescribed accounts are in the process of being made up.

17. According to the records of the company, the provident fund and Employees State Insurance dues have been regulariy deposited during the year with the appropriate authorities.

18. According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales tax, customs duty and excise duty were outstanding as at 31st March, 2003 for a period of more than six months from the date they became payable.

19. According to the information and explanations given to us, no personal expenses of employees or directors have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practice.

20. The company is not a sick industrial company within the meaning of clause (o) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

For A. F. PERQUSON & CO. Chartered Accountants R. K. HIRANANDANI Partner Mumbai, 11th June, 2003 Membership No. 36920

Mar 31, 2002

We have audited the attached balance sheet of The Bombay Dyeing and Manufacturing Company Limited, as at 31st March, 2002 and also the profit and loss account of the company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988, issued by the Company Law Board in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the annexure referred to in paragraph 2 above:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of the books.

(d) On the basis of written representations received from the directors, as on 31st March, 2002, and taken on record by the Board of directors, we report that none of the directors is disqualified as on 31st March, 2002 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(e) The company has been legally advised that: (i) incremental liability of Rs. 1.62 crores for gratuity to employees in respect of past services, can be withdrawn from, and, off-set against general reserve [see Note 5 on Schedule 17]; and (ii) loss of Rs. 48.63 crores on sale of long term investments referred in Note 6 on Schedule 17 can be withdrawn from, and, off-set against investment reserve. On the basis of the foregoing:

(i) in our opinion, the balance sheet and profit and loss account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(ii) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(A) in the case of the balance sheet, of the state of affairs of the company as at 31st March, 2002;

and

(B) in the case of the profit and loss account, of the loss for the year ended on that date.

ANNEXURE TO THE REPORT OF THE AUDITORS TO THE MEMBERS OF THE BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2002

(referred to in paragraph 2 of our report of even date)

2. None of the fixed assets of the company has been revalued during the year.

3. The stocks of finished goods, stores, spare parts and raw materials have been physically verified by the management at reasonable intervals during the year.

4. In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

5. The discrepancies noticed on verification between the physical stocks and the book records were not material.

7. In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the registers maintained under section 301 of the Companies Act, 1956 are prima facie not prejudicial to the interests of the company. We are informed that there are no companies under the same management as this company within the meaning of section 370(1 B) of the Companies Act, 1956.

11. In our opinion and according to the information and explanations given to us, in respect of the transactions of purchase of goods and materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the registers maintained under section 301 of the Companies Act, 1956 and aggregating during the year to Rs. 50,000 or more in respect of each party; transactions of purchases have been made at prices which are reasonable having regard to the prevailing market price for, such goods or prices at which transactions for similar goods have been made with other parties except that for purchase of items of a special nature comparable alternative quotations are not available and as regards sales, a comparison of prices could not be made as according to the information given to Us, there were no transactions for similar goods with other parties.

14. In our opinion and according to the information and explanations given to us, the company is maintaining reasonable records for the sale and disposal of realisable by-products and scrap.

15. In our opinion, the company has an internal audit system commensurate with the size and the nature of its business.

16. We have broadly reviewed the books of account maintained by the company pursuant to the Order made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed records have been maintained and the prescribed accounts are in the process of being made up.

17. According to the records of the company, provident fund and Employees State Insurance dues have been regularly deposited during the year with the appropriate authorities.

18. According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales tax, customs duty and excise duty were outstanding as at 31st March, 2002 for a period of more than six months from the date they became payable.

20. The company is not a sick industrial company within the meaning of clause (o) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

For A. F. FERGUSON & CO. Chartered Accountants

R. K. HIRANANDANI Mumbai, 21st June, 2002 Partner

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