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Directors Report of Bombay Dyeing & Manufacturing Company Ltd.

Mar 31, 2022

Your Directors present the One Hundred and Forty Second (142nd) Annual Report on the business and operations of the Company along with the Audited Financial Statements (Standalone as well as Consolidated) for the Financial Year ("FY") ended 31st March, 2022.

1. FINANCIAL RESULTS

('' in crore)

Particulars

Financial Year ended

Standalone

Consolidated

31/03/2022

31/03/2021

31/03/2022

31/03/2021

GROSS TURNOVER AND OTHER INCOME

2,106.22

1,225.71

2,106.22

1,225.71

Profit before Finance Cost, Depreciation, Amortization expenses and Exceptional Item

255.44

57.79

255.44

57.79

Less: Finance Costs

524.00

588.39

524.00

588.39

Profit/(Loss) before Depreciation, Amortization expenses and Exceptional Item

(268.56)

(530.60)

(268.56)

(530.60)

Less: Depreciation and Amortization expenses

32.78

33.72

32.78

33.72

PROFIT/(LOSS) BEFORE TAX AND EXCEPTIONAL ITEM

(301.34)

(564.32)

(301.34)

(564.32)

Add/(Less): Exceptional item

(233.03)

57.78

(233.03)

57.78

Add: Share of profit of equity accounted investees

-

-

0.11

0.21

PROFIT/(LOSS) BEFORE TAX

(534.37)

(506.54)

(534.26)

(506.33)

Less: Tax (net)

(73.92)

(37.44)

(73.92)

(37.44)

PROFIT / (LOSS) FROM CONTINUING OPERATIONS AFTER TAX

(460.45)

(469.10)

(460.34)

(468.89)

PROFIT / (LOSS) from DISCONTINUED OPERATIONS

-

-

0.02

(0.24)

Add: Other Comprehensive Income

(102.06)

218.43

(102.08)

218.38

Total Comprehensive Income

(562.51)

(250.67)

(562.40)

(250.75)

Add: Balance in Statement of Profit and Loss of Previous Year (Incl. OCI)

(557.96)

(302.87)

(561.38)

(306.21)

SURPLUS AVAILABLE FOR APPROPRIATIONS

Appropriations to:

Dividend

-

(4.42)

-

(4.42)

Balance carried to Balance Sheet (Incl. OCI)

(1,120.47)

(557.96)

(1,123.78)

(561.38)

Previous year figures have been regrouped where necessary and have been re-stated as per Ind AS.


2. COMPANY RESULTS AND DIVIDEND

With normalcy slowly returning, the Company''s turnover and other income have grown by 72% from '' 1,225.71 Crore in 202021 to '' 2,106.22 Crore in the current year. Correspondingly the operating loss has also reduced from '' 564.32 Crore to '' 301.34 Crore in the current year. The global business climate is facing uncertainty given the unresolved conflict in Europe impacting raw material prices and unrestricted movement of goods.

Considering the financial results of the Company for 2021-22 and the unsettled business environment, the Company is unable to declare a dividend for the current year. Consequently, no dividend shall also be paid on 8% Redeemable Non-Convertible NonCumulative Preference Shares for the financial year 2021-22.

The Company''s revenues from real estate activity as per Ind AS reporting for FY 2021-22 was '' 430.76 Crore as compared to '' 410.17 Crore in FY 2020-21.

The construction of the two towers at Island City Center ("ICC"), Dadar, by Bombay Realty, is completed and final snag rectifications are in progress. Full Occupation Certificate for TWO

ICC is received and for ONE ICC Full Occupation Certificate is expected shortly which was delayed due to Covid-19 pandemic.

The real estate sector continued to suffer for part of the previous financial year due to Covid. During the year the lockdowns continued to impact sales and the walk-in on the site remained relatively low. Despite the odds, the Company used innovative distribution strategies to achieve sales numbers which were higher than the previous year. In the latter half of this year, we have seen positivity come back to the real estate sector and have put together a detailed distribution & marketing plan to capitalize on the positive sentiments and to further increase our sales numbers.

The Polyester Division ("PSF Division") achieved a turnover of '' 1,548.45 Crore during the year ended 31st March, 2022 as compared to '' 755.26 Crore in the previous year. The average capacity utilisation was 93%, significantly higher than previous year''s 63% and the industry average capacity utilization of around 80%. Impact of COVID-19 2nd and 3rd wave combined with geopolitical events affected the crude oil prices, petrochemical

prices and demand for Polyester products. Ocean freights and Energy costs increased sharply in line with rising crude oil prices impacting the margins. However, your Company was able to maintain higher capacity utilization and stable margins by focusing on specialty fibres and innovative product mix. Geographical and product diversification with continuing efforts on energy efficiency should help your Company sustain higher volume and margins for Polyester Division.

Home & You, the Company''s retail business achieved a turnover of '' 21.71 Crore during the year ended 31st March, 2022, as compared to '' 27.99 Crore in the previous year. Globally the retail industry was amongst the severely wedged sector by the Pandemic and subsequent lockdowns. The Company was also affected with supply side challenges during the period. The Company has further taken necessary initiatives to reduce the cost and lead time of distribution.

The Company has adopted a Dividend Distribution Policy in accordance with the requirements of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"). The same is available on the website of the Company https://bombaydyeing.com/pdfs/corporate/Dividend_ Distribution_Policy.pdf

3. CONSOLIDATED FINANCIAL RESULTS

As stipulated by Regulation 33 of the Listing Regulations, the Company has prepared Consolidated Financial Statement in accordance with the applicable accounting standards as prescribed under the Companies (Accounts) Rules, 2014 of the Companies Act, 2013 ("the Act"). The Consolidated Financial Statement reflects the results of the Company and that of its subsidiary and associates. As required under Regulation 34 of the Listing Regulations, the Audited Consolidated Financial Statement together with the Independent Auditors'' Report thereon is annexed and forms part of this Report.

The summarized Consolidated Financial Statement is provided above in point No.1 of this Report.

4. SUBSIDIARIES AND ASSOCIATES

Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Company''s subsidiary and associates in Form AOC-1 is forming part of the Consolidated Financial Statements.

5. FIXED DEPOSITS

During the year, the Company repaid the deposits aggregating to '' 0.13 Crore. Total deposits outstanding as on 31st March, 2022 amounted to '' 0.67 Crore out of which 51 deposits aggregating '' 0.44 Crore had matured but remained unclaimed.

6.

CREDIT RATING

Brickwork Ratings India Pvt. Ltd. has assigned the following ratings to the Company:

Facility

Tenure

Previous

Ratings

Current

Ratings

Fund Based

Term Loan Cash Credit

Long Term

BWR BBB (Pronounced as BWR BBB Plus) Outlook: Negative

BWR BBB (Pronounced as BWR BBB Plus) Outlook: Negative

Non Fund Based

Letter of Credit/ Bank Guarantee

Short

Term

BWR A2 (Pronounced as BWR A Two)

BWR A2 (Pronounced as BWR A Two)

Fund Based Fixed Deposit

Long Term

BWR FBBB (Pronounced as BWR F BBB ) Outlook: Negative

BWR FBBB (Pronounced as BWR F BBB ) Outlook: Negative

7. SHARE CAPITAL

The total Paid-up Share Capital as on 31st March, 2022 was '' 45.20 Crore comprising of 20,65,34,900 Equity Shares of '' 2/-each aggregating to '' 41.31 Crore and 3,88,800, 8% Redeemable Non-Convertible Non-Cumulative Preference Shares of '' 100/-each aggregating to '' 3.89 Crore. Unlisted 3,88,800, 8% Redeemable Non-Convertible Non-Cumulative Preference Shares of '' 100/- each which were due for redemption on 1st May, 2022 have been extended for redemption anytime within seven years from 1st May 2022 with the consent ofthe preference shareholders. There is no change in any other terms and conditions of the said Non-Convertible Non-Cumulative Preference Shares.

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

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure A.

9. RELATED PARTY TRANSACTIONS

There were no materially significant transactions with related parties during the year under review which were in conflict with the interest of the Company. All the transactions entered into by the Company with Related Parties during the year under review were at arms-length basis and in ordinary course of business. Suitable disclosure required under the Accounting Standard (Ind AS 24) have been made in the notes to the Financial Statement.

As required under Regulation 23 of the Listing Regulations, the Company has formulated a Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions which is available on the website of the Company https://bombaydyeing.com/pdfs/corporate/RPT%20Policy.pdf

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statement.

11. INSURANCE

All the properties including buildings, plant and machinery and stocks have been adequately insured.

12. ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, Annual Return of the Company as at 31st March, 2022 is uploaded on the website of the Company at www.bombaydyeing.com

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

At the 141st Annual General Meeting the AGM of the Company held on 9th September, 2021, following appointment/re-appointment were approved by the members:

a) Mr. Suresh Khurana was appointed as Manager of the Company for a period of two years commencing from 9th August, 2021 to 8th August, 2023.

b) Mr. Rajesh Batra was appointed as a Non-Executive Independent Director of the Company for a period of five years commencing 9th August, 2021 to 8th August, 2026.

c) Mr. Vinesh Kumar Jairath was re-appointed as a Non-Executive Independent Director of the Company to hold the office for a second term of five years commencing from 9th February, 2022 to 8th February, 2027.

Pursuant to the provisions of Section 152 of the Act and the Articles of Association of the Company, Mr. Ness N. Wadia, Director of the Company, retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.

Mr. Keki M. Elavia, who was appointed as an Independent Director of the Company for a term of five years upto 21st May, 2022 by the members at the 137th AGM, in terms of Section 149 of the Act, is eligible for being re-appointed as an Independent Director of the Company. Consequently, the Board of Directors at its meeting held on 28th March, 2022 re-appointed Mr. Elavia for a second term commencing from 22nd May, 2022 till the conclusion of 144th AGM of the Company

to be held in the year 2024, not liable to retire by rotation. The appointment of Mr. Keki M. Elavia is subject to the approval of Members of the Company at the 142nd Annual General Meeting. Necessary resolutions for the re-appointment of Mr. Keki M. Elavia for the second term have been included in the Notice convening the ensuing AGM and requisite details have been provided in the explanatory statement of the Notice. Brief profile of Mr. Keki M. Elavia is also provided in the Notice convening the ensuing AGM for reference of the members. The Board recommends his appointment.

Mr. Hitesh Vora, Chief Financial Officer (CFO) and Chief Risk Officer (CRO) has resigned from the services of the Company and he ceases to be CFO and CRO from the close of business hour w.e.f. 8th May, 2022. The Board of directors at their meeting held on 4th May, 2022 appointed Mr. Vinod Jain as CFO and CRO of the Company w.e.f. 9th May, 2022.

All the Independent Directors have given a declaration that they meet the criteria of independence as laid down under Section 149 of the Act and affirmed compliance with Wadia Code of Ethics and Business Principles as required under Regulation 26(3) of the Listing Regulations.

In the opinion of the Board, all the Independent Directors possess the integrity, expertise and experience including the proficiency required to be Independent Directors of the Company, fulfill the conditions of independence as specified in the Act and the Listing Regulations and are independent of the management and have also complied with the Code for Independent Directors as prescribed in Schedule IV of the Companies Act, 2013.

Apart from reimbursement of expenses incurred in the discharge of their duties, Non-Executive Directors are entitled for remuneration as permissible under the Act.

Eight Board Meetings were duly convened and held during the year and the details of Board/Committee meetings held are provided in the Corporate Governance Report. The gap between meetings was within the period prescribed under the Act and Listing Regulations.

Board Evaluation

Pursuant to the provisions of the Act and Regulation 17 of Listing Regulations, the Board has carried out an annual performance evaluation of its own performance and that of its statutory committee''s viz. Audit Committee, Stakeholder Relationship Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Risk Management Committee and that of the individual Directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

The Board of Directors of the Company has adopted, on recommendation of the Nomination and Remuneration Committee, a Policy for Selection and Appointment of Directors, Senior Management and their Remuneration.

A brief detail of the policy is given in the Corporate Governance Report and also posted on the website of the Company http:// www.bombaydyeing.com/pdfs/corporate/corporatepdf09.pdf

14. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

a) In the preparation of the annual financial statements for the year ended 31st March, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) Have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the company for that period;

c) Have taken proper and sufficient care for the 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 fraud and other irregularities;

d) Have prepared the annual accounts on a going concern basis;

e) Have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

f) Have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively;

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2021-22.

15. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34(2)(e) of the Listing Regulations, Management Discussion and Analysis Report is given in Annexure B to this Report.

16. CORPORATE GOVERNANCE

A separate report on Corporate Governance pursuant to Regulation 34(3) of the Listing Regulations, read with Part C of Schedule V thereof, along with a certificate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to this Report as Annexure C.

17. BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34(2)(f) of the Listing Regulations the Business Responsibility Report ("BRR") of the Company for FY 2021-22 is forming part of the Report as Annexure D.

18. PARTICULARS OF EMPLOYEES

Details of remuneration of Directors, KMPs and employees as per Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of Report as Annexure E. However, as per the provisions of Section 136 of the Companies Act, 2013, the Annual Report is being sent to the Members and others entitled thereto, excluding the information on employees'' remuneration particulars as required under Rule 5 (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, The disclosure is available for inspection by the Members at the Registered Office of your Company during business hours on all working days of the Company up to the date of the ensuing AGM. Any Member interested in obtaining a copy thereof, may write an email to grievance_redressal_cell@ bombaydyeing.com.

19. DISCLOSURE ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder and same is posted on the website of the Company and can be accessed at https://bombaydyeing.com/pdfs/ corporate/corporatepdf08.pdf

The Company has Complaint Redressal Committee for providing a redressal mechanism pertaining to sexual harassment of women employees at workplace. No complaint under above said policy has been received during the FY 2021-22.

20. AUDITORS Statutory Auditors

Pursuant to Section 139 of the Act and Rules made thereunder, the Company at its 138th AGM appointed M/s. Bansi S. Mehta & Co. (Firm Registration No. 100991W) as the Statutory Auditors of

the Company for a period of 5 years from the conclusion of 138th AGM until the conclusion of 143rd AGM of the Company. The Company has received confirmation from the Auditors that they are eligible to continue as the statutory auditors of the Company.

Pursuant to amendments in Section 139 of the Act, the requirements to place the matter relating to such appointment for ratification by Members at every AGM has been done away with.

The Reports given by M/s. Bansi S. Mehta & Co., Chartered Accountants on the standalone and consolidated financial statements of the Company for FY 2021-22 are part of the Annual Report.

Cost Auditors

Pursuant to Section 148 of the Act read with Rule 14 of the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records of the Company are required to be audited. The Directors, on the recommendation of the Audit Committee, appointed M/s. D. C. Dave & Co., (Firm Registration No. 000611) Cost Accountants, to audit the cost accounts of the Company for the FY ending 31st March, 2023 on a remuneration of '' 5,50,000/- (Rupees Five Lakh Fifty Thousand) plus out of pocket expenses and applicable taxes. The remuneration payable to the Cost Auditor is required to be ratified by the shareholders at the ensuing AGM.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of Listing Regulations, the Company has appointed M/s. Parikh & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as Annexure F.

Internal Auditors

At the Board Meeting held on 4th May, 2022, M/s. PKF Sridhar & Santhanam LLP, were appointed as the Internal Auditors of the Company for FY 2022-23.

21. REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act, details of which needs to be mentioned in Director''s Report.

22. SIGNIFICANT AND MATERIAL ORDERS

There were no significant and material orders passed by the regulators or courts or tribunals, which would impact the going

23. MATERIAL CHANGES AND COMMITMENTS

There was no reportable material event in the Company during the year.

24. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal Audit plays a key role in providing an assurance to the Board of Directors with respect to the Company having adequate Internal Financial Control Systems. The Internal Financial Control Systems provide, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Company''s assets. Details about the adequacy of Internal Financial Controls are provided in the Management Discussion and Analysis Report.

25. CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Act, comprising of three Directors including Independent Director. The composition and report on CSR is attached herewith as

Annexure G.

26. AUDITORS QUALIFICATIONS

Statutory Auditors'' Report, Cost Auditors'' Report and Secretarial Auditors'' Report do not contain any qualification, reservation or adverse remarks.

27. RISK MANAGEMENT

The Company has constituted a Risk Management Committee in terms of the requirements of Regulation 21 of the Listing Regulations. The details of the same are disclosed in the Corporate Governance Report.

28. AUDIT COMMITTEE

The Company has constituted an Audit Committee in terms of the requirements of the Act and Regulation 18 of the Listing Regulations. The details of the same are disclosed in the Corporate Governance Report.

29. VIGIL MECHANISM

Pursuant to Rule 7 of the Companies (Meetings of Board and its Powers) Rules 2014 read with Section 177(9) of the Act and as per Regulation 22 of the Listing Regulations (as amended from time to time), the Company has framed Vigil Mechanism/ Whistle Blower Policy ("Policy") to enable Directors and employees to report genuine concerns or grievances, significant deviations from key management policies and reports on any non-compliance and wrong practices, e.g., unethical behavior, fraud, violation of law, inappropriate behavior/conduct, etc.

The functioning of the Vigil Mechanism is reviewed by the Audit Committee from time to time. None of the Directors or employees have been denied access to the Audit Committee of the Board.

The objective of this mechanism is to maintain a redressal system that can process all complaints concerning questionable accounting practices, internal controls, or fraudulent reporting of financial information.

The Policy framed by the Company is in compliance with the requirements of the Act and the Listing Regulations and is available on the website of the Company.

30. INVESTOR EDUCATION PROTECTION FUND

During FY 2021-22, the Company has transferred '' 27,25,655 to Investor Education and Protection Fund (IEPF) in accordance with the provisions of Section 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

In accordance with the aforesaid provisions, the company has transferred 1,79,595 equity shares held by 638 Shareholders as on 31st March, 2014 whose dividends were remaining unpaid/ unclaimed for seven consecutive years i.e. from FY 2013-14 to IEPF Authority. Any shareholder whose shares are transferred to IEPF Authority can claim the shares by making an online

application in Form IEPF-5 (available on www.iepf.gov.in) with a copy to the Company.

31. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS.

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

32. APPRECIATION

The Directors express their appreciation to all employees of the various divisions for their diligence and contribution to performance. The Directors also record their appreciation for the support and co-operation received from franchisees, dealers, agents, suppliers, bankers and all other stakeholders. Last but not the least, the Directors wish to thank all shareholders for their continued support.

On behalf of the Board of Directors NUSLI N.WADIA

Place : Mumbai Chairman

Date: 4th May 2022. (DIN:0 0 015731)


Mar 31, 2018

The Directors have pleasure in presenting their Report on the business and operations of the Company along with the audited financial statements for the year ended 31st March, 2018.

1. FINANCIAL RESULTS

(Rs. in crore)

Particulars

Financial Year ended

Standalone

Consolidated

31/03/2018

31/03/2017

31/03/2018

31/03/2017

GROSS TURNOVER AND OTHER INCOME

2744.00

2100.60

2744.00

2100.60

Profit before Finance Cost, Depreciation, Amortization expenses and Exceptional item

632.83

351.35

632.83

351.35

Less: Finance Costs

412.51

368.45

412.51

368.45

Profit/(Loss) before Depreciation, Amortization expenses and Exceptional item

220.32

(17.10)

220.32

(17.10)

Less: Depreciation and Amortization expenses

29.88

34.09

29.88

34.09

PROFIT/(LOSS) BEFORE TAX AND EXCEPTIONAL ITEM

190.44

(51.19)

190.44

(51.19)

Less: Exceptional item

153.25

67.48

153.25

45.81

Add: Share of profit of equity accounted investees

-

-

0.77

0.05

PROFIT/(LOSS) BEFORE TAX

37.19

(118.67)

37.96

(96.95)

Less: Tax (net)

2.78

29.57

2.78

29.57

PROFIT/(LOSS) AFTER TAX

34.41

(148.24)

35.18

(126.52)

Add: Other Comprehensive Income

284.76

604.73

284.76

604.73

Total Comprehensive Income

319.17

456.49

319.94

478.21

Add: Balance in Statement of Profit and Loss of Previous Year (Incl. OCI)

SURPLUS AVAILABLE FOR APPROPRIATIONS

Appropriations to:

(25.72)

(469.78)

(26.26)

(492.04)

Dividend

14.46

10.33

14.46

10.33

Dividend Distribution Tax

2.94

2.10

2.94

2.10

Balance carried to Balance Sheet (Incl. OCI)

276.05

(25.72)

276.28

(26.26)

Previous year figures have been regrouped where necessary and have been re-stated as per Ind AS.

2. COMPANY RESULTS AND DIVIDEND

The Company has drawn up its accounts for the first time under Ind AS. The figures for the previous year have been suitably adjusted, as appropriate to conform to the Ind AS requirements.

The Company’s turnover and other income for the year was Rs.2,744.00 crore as against Rs.2,100.60 crore in the previous year. The profit after tax is Rs.34.41 crore as against a loss of Rs.148.24 crore in the previous year. The profit for the current year would have been even higher but for an exceptional provision of Rs.153.25 crore made in regard to the perceived doubtful recovery of advance made to the Company’s Joint Venture, P.T. Five Star Textile Indonesia, spelt out in detail in Note 41 to the accounts.

During the year the Company successfully rationalised number of lenders to improve operating efficiency. This greatly helped management of large volume of cash outflows. In this process it will also help tightly monitor and control finance costs in future.

The construction of the two towers at Island City Center (“ICC”), Dadar, by Bombay Realty, is nearing completion and handover to the buyers will be done as committed which will generate net cash inflows thereby easing the company’s debt burden.

Polyester Staple Fibre (“PSF”) industry saw a sluggish growth of 3% in volume in the country, which was mainly met through new capacities commissioned during the year. Continuing cheap imports from China disrupted the domestic market impacting the Company’s PSF business. The PSF Division will continue to focus on innovative product mix and cost reduction initiatives in order to counter these factors.

Home & You, the Company’s Retail business, will be investing in design expansion, owning the digital printing space through TVC media campaigns to reinforce its leadership position. Sales channels proliferation will be a thrust area. The Company would be launching new franchise model and explore high volume institutional business in the current year.

Having regard to the above, your Directors have recommended a higher dividend of Rs.1/- per equity share of Rs.2/- each which is subject to shareholders’ approval.

3. CONSOLIDATED FINANCIAL RESULTS

As stipulated by Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations, 2015”), the Company has prepared Consolidated Financial Statement in accordance with the applicable accounting standards as prescribed under the Companies (Accounts) Rules, 2014 of the Companies Act, 2013 (“the Act”). The Consolidated Financial Statement reflects the results of the Company and that of its associates. As required under Regulation 34 of Listing Regulations, 2015, the Audited Consolidated Financial Statement together with the Independent Auditors’ Report thereon is annexed and forms part of this Report.

The summarized Consolidated Financial Statement is provided above in point No. 1 of this Report.

4. BOMBAY REALTY

Bombay Realty had a highly satisfactory year. With the receipt of the regulatory approvals and the consequent pick up in construction activity, the Division is now fully geared to complete the construction as per schedule and ensure timely delivery of the two ICC towers.

The revenues from real estate activity as per Ind AS reporting for FY 2017-18 adopted during the year were Rs.1182.91 crore as compared to Rs.515.28 crore in FY 2016-17, reporting a growth of 130% over last year. The business is poised to become the single largest revenue earning Division of the Company on topline basis and will be a substantial contributor to the bottom line growth of the Company.

The Division is complying with the Real Estate (Regulation and Development) Act, 2016 (“RERA”) requirements and giving the clients a transparent and fully compliant project information, the promise of timely delivery with world class construction quality and amenities. The increased pace of construction will mean completion of two ICC towers within a record construction time of 42 months. The construction of the slum project at ICC is ready for delivery.

The ICC flats are uniquely positioned in market and the demand for the units has picked up substantially driving faster sales in an otherwise struggling real estate market impacted by changing policy framework, the demonetization effect and general economic slowdown. Ever growing enquiries and higher footfalls are likely to result in increased sales and the resultant cash flow.

The Division is well poised to monetise its assets both in ICC and WIC and with the DCR 2034 enhancing the land potential for development; it is looking at forging additional projects in the coming year.

With the experience of successfully executing the two large ICC projects, the Division is aiming to becoming a best in class with a name to reckon with in the real estate industry.

5. HOME & YOU

For first half of the year under report the Division experienced revenue pressure led by weak market demand. However, there was recovery in the latter half of the year with revival of general trade channel, which was showing de-growth in the first six months and reported growth of 24% in the second half. Modern trade channel opened 842 stores by end of the financial year. The coming year shows even more promise when the Division will look to consolidate leadership position by owning digital bed sheet platform as well as through the launch of innovative make your own bed sheet campaign.

6. POLYESTER DIVISION

The Division achieved a turnover of Rs.1,251.95 crore during the year as compared to Rs.1,214.45 crore in the previous year. In volume terms, there was an increase of slightly over 3 %. The raw material and PSF prices remained volatile during the year tracking the movement in petrochemicals and crude oil prices. The average capacity utilization was 93%, significantly better than the industry average capacity utilization of below 80%.

The sluggish market sentiment in the domestic polyester staple fibre industry was reflected in an overall growth of 3% compared to the previous year. New capacities of around 12% of existing capacity, became fully operational during the year far exceeding the growth in domestic demand resulting in underutilization of domestic capacity. Increased volatility in raw material prices, surplus production capacities and imports at significantly lower prices has posed challenges to the Company’s Polyester business, which it will seek to counteract with innovative product mix and cost reduction initiatives.

7. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Company’s Associates and Joint Venture (in Form AOC-1) is forming part of the Consolidated Financial Statement.

8. FIXED DEPOSITS

During the year, the Company repaid the deposits aggregating to Rs.0.80 crore.

Total deposits outstanding as on 31st March, 2018 amounted to Rs.77.09 crore out of which 80 deposits aggregating Rs.0.47 crore had matured, but remained unclaimed.

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

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as “Annexure A”.

10. RELATED PARTY TRANSACTIONS

There were no materially significant transactions with related parties during the financial year under review, which were in conflict with the interest of the Company. Suitable disclosure as required by the Accounting Standards (Ind AS 24) has been made in the notes to the Financial Statement.

As required under Regulation 23 of SEBI (Listing Obligations and Disclosures) Regulations, 2015, the Company has formulated a policy on Related Party Transactions which has been put up on the website of the Company: http://www.bombaydyeing.com/ pdfs/corporate/corporatepdf11.pdf

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statement.

12. INSURANCE

All the properties including buildings, plant and machinery and stocks have been adequately insured.

13. REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Directors’ Report.

14. ANNUAL RETURN

The extract of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in form MGT - 9 in “Annexure B” of this Report.

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL

At the Annual General Meeting (AGM) of the Company held on 10th August, 2017, the members of the Company appointed Mr. Vinesh Kumar Jairath as an Independent Director for a term of five years with effect from 9th February, 2017 and Mr. Keki M. Elavia, as an Independent Director for a term of five years with effect from 22nd May, 2017. Dr. (Mrs.) Minnie Bodhanwala was also appointed in the said AGM, as a Non-Executive, Non-Independent Director, liable to retire by rotation with effect from 29th March, 2017.

Mr. Ishaat Hussain ceased to be a Director of the Company w.e.f 10th August, 2018. The Board places on record its appreciation towards valuable contribution made by Mr. Ishaat Hussain during his tenure as a Director of the Company.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Nusli N. Wadia (DIN: 0 0 015731) retires by rotation and is eligible for reappointment.

By the Notification dated 9th May, 2018, Securities and Exchange Board of India (“SEBI”) amended the Listing Regulations, 2015 by incorporating Regulation 17(1A) in the Listing Regulations, 2015 to be effective from 1st April, 2019. According to the said Regulation, no listed company shall appoint or continue the directorship of a person who has attained age of 75 years unless special resolution is passed to that effect.

Mr. Nusli N. Wadia is 74 years as on date and therefore, a special resolution is proposed in ensuing Annual General Meeting for continuation of holding office of Non- Executive Director of the Company, by Mr. Nusli N. Wadia, who will be above the age of 75 years as on 1st April, 2019 to comply with the above amendment.

Similarly, Mr. A. K. Hirjee, Mr. S. M. Palia, Mr. S. S. Kelkar and Mr. R. A. Shah have also attained the age of 75 years. However, Mr. S. M. Palia and Mr S. S. Kelkar have expressed their desire to step down from the Board during the financial year 2018-19. Therefore, it is proposed to pass special resolutions at the ensuing AGM of the Company for continuation of remainder term of only Mr. A. K. Hirjee (DIN: 00044765) and Mr. R. A. Shah (DIN: 00009851) i.e. upto 7th August, 2019.

Necessary resolutions for re-appointment/continuation of Directorship past the age of 75 years, of aforesaid Directors have been included in the notice of the ensuing AGM and requisite details have been provided in the explanatory statement of the notice. The Board recommends their re-appointment/ continuation as Directors of the Company.

All the Independent Directors have given a declaration that they meet the criteria of independence as laid down under Section 149 of the Act and affirmed compliance with Wadia code of conduct as required under Regulation 26(3) of SEBI (LODR) Regulations, 2015.

For the Non-Executive Directors, apart from reimbursement of expenses incurred in the discharge of their duties, the remuneration that these directors were entitled to under the Act as Non-Executive Directors and the remuneration that a NonExecutive Director may receive for professional services rendered to the Company through a firm in which he is a partner, none of these directors have any other pecuniary relationship with your Company.

Seven Board Meetings were duly convened and held during the year and the details of Board/Committee meetings held are provided in the Corporate Governance Report. The gap between meetings was within the period prescribed under the Companies Act, 2013 and Listing Regulations.

Key Managerial Personnel

During the year under review, Mr. Pushpamitra Das, Chief Financial Officer, resigned with effect from 30th June, 2017.

Mr. Vishnu Peruvemba, was appointed as the Chief Financial Officer (“CFO”) of the Company at the Board Meeting held on 8th November, 2017. He joined as CFO of the Company w.e.f. 5th January, 2018.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of Listing Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance and that of its statutory committees viz. Audit Committee, Stakeholder Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee and that of the individual Directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

The Board has adopted, on recommendation of the Nomination & Remuneration Committee, a policy for selection and appointment of Directors, Senior Management and their remuneration. A brief detail of the policy is given in the Corporate Governance Report and also posted on the website of the Company: http://www. bombaydyeing.com/pdfs/corporate/corporatepdf09.pdf

16. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed and there are no material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) they have taken proper and sufficient care for the 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 fraud and other irregularities;

d) they have prepared the Annual Accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2017-18.

17. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 17(7) of Listing Regulations, 2015, the Management Discussion and Analysis Report is given in “Annexure C” to this Report.

18. CORPORATE GOVERNANCE

A separate report on Corporate Governance pursuant to Regulation 34(3) of Listing Regulations, 2015, read with Part C of Schedule V thereof along with a certificate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to this Report as “Annexure D”.

19. BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2) of Listing Regulations, 2015, the Business Responsibility Report (“BRR”) of the Company for FY 2017-18 is forming part of this Report as “Annexure E”.

20. PARTICULARS OF EMPLOYEES

The details of remuneration of directors, KMPs and employees as required under Section 197 of the Companies Act, 2013 (“the Act”), read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report as “Annexure F”. However, as per the provisions of Section 136 of the Act, the Annual Report is being sent to the Members and others entitled thereto, excluding the information on employees’ remuneration particulars as required under Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which is available for inspection by the Members at the Registered Office/Corporate Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof such Member may write to the Company in this regard.

21. AUDITORS

Statutory Auditors

Pursuant to Section 139 of the Companies Act, 2013 the Company’s Auditors, M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants, Mumbai retire at the ensuing Annual General Meeting of the Company. The Company proposes to appoint, M/s. Bansi S. Mehta & Co. (Firm Registration No. 100991W) as the Statutory Auditors of the Company for a period of 5 years from the conclusion of 138th Annual General Meeting until the conclusion of 143rd Annual General Meeting. They have confirmed their eligibility under Section 141 of the Act and the Rules framed there under for appointment as Auditors of the Company.

As required under Regulation 33 of Listing Regulations, 2015, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records of the Company are required to be audited. The Directors, on the recommendation of the Audit Committee, appointed M/s. D. C. Dave & Co., Cost Accountants, to audit the cost accounts of the Company for the financial year ending 31st March, 2019 on a remuneration of Rs.5,00,000/-(Rupees Five Lakh) plus out of pocket expenses and applicable taxes. The remuneration payable to the Cost Auditor is required to be ratified by the shareholders at the ensuing AGM.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Parikh & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as “Annexure G”.

Internal Auditors

At the Board Meeting held on 14th May, 2018, M/s. Ernst & Young, Chartered Accountants, were re-appointed as the Internal Auditors of the Company for financial year 2018-19.

22. SIGNIFICANT OR MATERIAL ORDERS

There were no significant and material orders passed by the regulators or courts or tribunals, which would impact the going concern status and the Company’s operations in future.

23. MATERIAL CHANGES

There was no reportable material event in the Company during the year.

24. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal Audit plays a key role in providing an assurance to the Board of Directors with respect to the Company having adequate Internal Financial Control Systems. The Internal Financial Control Systems provide, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Company’s assets. Details about the adequacy of Internal Financial Controls are provided in the Management Discussion and Analysis Report.

25. INDIAN ACCOUNTING STANDARDS (Ind AS)

Your Company has adopted Indian Accounting Standards (“Ind AS”) for the accounting period beginning on 1st April, 2017 pursuant to Ministry of Corporate Affairs Notification dated 16th February, 2015 notifying the Companies (Indian Accounting Standard) Rules, 2015.

26. CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013, comprising of four Directors including Independent Directors.

For the current financial year 2017-18, as the average profit for the last three years is negative, the Company decided not to spend any amount on CSR. However, the unspent CSR amount of Rs.4 lakh of the previous year was spent for CSR activity during the financial year (Refer Annexure - H).

27. AUDITORS QUALIFICATIONS

Statutory Auditors’ Report and Secretarial Auditors’ Report do not contain any qualification, reservation or adverse remark.

28. RISK MANAGEMENT POLICY

The Company has formulated a Risk Assessment & Management Policy. Your attention is drawn to the Report on Corporate Governance for details.

29. AUDIT COMMITTEE

The Audit Committee of the Company comprises of 6 Independent Directors. The composition of directors and other details are provided in the Corporate Governance Report of the Company. The Company has established a vigil mechanism through the Committee, wherein the genuine concerns can be expressed by the employees and directors. The Company has also provided adequate safeguards against victimisation of employees who express their concerns. The Company has provided the details of the vigil mechanism in the Whistle Blower Policy in the Corporate Governance Report and also posted these on the website of the Company: http://www.bombaydyeing.com/pdfs/corporate/ Whistle_Blower_Policy.pdf

30. APPRECIATION

The Directors express their appreciation to all employees of the various divisions for their diligence and contribution to performance. The Directors also record their appreciation for the support and co-operation received from franchisees, dealers, agents, suppliers, bankers and all other stakeholders. Last but not the least, the Directors wish to thank all shareholders for their continued support.

On behalf of the Board of Directors

Place: Mumbai NUSLI N.WADIA

Date: 14th May, 2018. Chairman


Mar 31, 2017

DIRECTORS'' REPORT to the members

The Directors have pleasure in presenting their Report on the business and operations of the Company along with the audited financial statements for the year ended 31st March, 2017.

1. FINANCIAL RESULTS

(Rs, in crore)

PARTICULARS

Financial Year ended

Standalone

Consolidated

31/03/2017

31/03/2016

31/03/2017

31/03/2016

GROSS TURNOVER AND OTHER INCOME

1,884.54

1,983.72

1,887.20

1,995.29

Profit before Finance Costs and Depreciation and amortization expenses

168.95

231.31

185.15

233.83

Finance Costs

368.44

282.64

370.66

289.92

(Loss/Profit before Depreciation and amortization expenses

(199.49)

(51.33)

(185.51)

(56.09)

Depreciation and amortization expenses

31.66

33.91

31.85

34.36

(Loss/Profit before extraordinary items and tax

(231.15)

(85.24)

(217.36)

(90.45)

Extraordinary items

302.43

-

302.43

-

PR0FIT/(L0SS) BEFORE TAX

71.28

(85.24)

85.07

(90.45)

Less: Tax (net)

29.57

-

29.57

-

Add: Minority interest and share of profit/loss in associates

-

-

1.91

0.53

PROFIT / (LOSS) AFTERTAX

41.71

(85.24)

57.41

(91.09)

Add: Balance in Statement of Profit and Loss of Previous Year

5.83

103.50

(72.16)

31.18

Add: Gain on amalgamation of subsidiary

12.71

-

10.47

-

Add: Gain on reversal of minority interest

-

-

0.54

-

Add/(Deduct): Depreciation on assets where remaining life is Nil, recognized in retained earnings

-

-

-

-

Add/(Deduct): Share in jointly controlled entity and accumulated surplus in associates on consolidation SURPLUS AVAILABLE FOR APPROPRIATIONS

(2.44)

0.18

Appropriations to: Proposed Dividend

14.46

10.33

14.46

10.33

Dividend Distribution Tax

2.94

2.10

2.94

2.10

Transferred to General Reserve

-

-

-

-

Balance carried to Balance Sheet

42.85

5.83

(23.58)

(72.16)

Previous year figures have been regrouped where necessary.

2. COMPANY RESULTS AND DIVIDEND

The Company''s turnover and other income for the year was Rs, 1,885 crore as against Rs, 1,984 crore in the previous year, the net profit for the year was Rs, 41.71 crore compared to a loss of Rs, 85.24 crore in the previous year. Income pursuant to the amalgamation of Archway Investment Company Ltd., a wholly owned subsidiary of the Company, mainly contributed to the Results. However, the impact of this on the interest burden of the Company would be reflected in 2017-18.

The construction of the two towers at Island City Centre (“ICC"), Dadar, is in full swing, the increased pace of construction has resulted in achieving six days per slab cycle and is a testimony to the commitment for timely delivery, the towers are expected to be completed as per schedule by August, 2018. the introduction of Real Estate (Regulation and Development) Act, 2016 ("RERA"), a major policy initiative, is expected to be positive for the organized Real Estate Sector and may result in pickup in sales. the Real Estate Division is already witnessing increased enquiries as well as footfalls.

Home & You, the Company''s Bed, Bath Coordinates Retail Business, will continue to expand its distribution footprint through new franchise model as well as recently launched e-com website, the Division''s thrust would be to acquire and retain consumers through innovations and enlarged portfolio of products to cater to diverse consumer preferences.

PSF Industry saw a volume growth of 3% during the year under review and is expected to grow by 5% in 2017-18. Government of India''s push to increase the size of the Textile Industry output will pave the way for larger man-made fibre consumption due to limited availability of cotton, the implementation of GST effective 1st July, 2017 will remove the anomaly of lower tax rate on recycled fibre and this will help virgin fibre manufacturers including your Company, in achieving higher volumes and better margins.

Taking into consideration the foregoing, the Directors have recommended a dividend of Rs, 0.70 (Seventy Paise) per equity share of Rs, 2/- each for the Financial Year ended 31st March, 2017, which is subject to shareholders'' approval.

3. CONSOLIDATED FINANCIAL RESULTS

The Company has prepared Consolidated Financial Statements in accordance with the applicable Accounting Standards as prescribed under the Companies (Accounts) Rules, 2014 of the Companies Act, 2013. the Consolidated Financial Statements reflect the results of the Company and that of its associates. As required under Regulation 34 of the SEBI [Listing Obligations and Disclosure Requirements ("LODR")] Regulations, 2015, the Audited Consolidated Financial Statements together with the Independent Auditors'' Report thereon are annexed and form part of this Report.

The summarized consolidated Financial Statements are provided above in point no. 1 of this Report.

4. BOMBAY REALTY

The business of Bombay Realty had to face adverse conditions in the recent past on account of changing policy framework, demonetization effect, general economic slowdown and delay in the receipt of regulatory approvals. This resulted in a slowdown in construction activity, sales and buildup of unsold inventory.

The revenues from real estate activity for FY 2016-17 was Rs, 297 crore as compared to Rs, 470 crore in FY 2015-16. With the receipt of some of the regulatory approvals and the consequent pick up in construction activity, the Company is confident and fully geared to complete the construction as per schedule and ensure timely delivery of the two towers.

The Company is also geared up towards complying with RERA requirements to give the clients a transparent and fully compliant project coupled with the surety of timely delivery with world class construction quality. On visible evidence of construction activity, sales enquiries have improved.

The construction on the slum project at ICC has also commenced and is expected to be completed as per schedule by August, 2017.

5. HOME & YOU

For the second consecutive year, the domestic textile market experienced volume as well as value pressure led by weak demand. Latter half of the year saw demonetization further hurting the business with significant drop in consumer demand as well as inventory reduction by trade. However, by holding on to our domestic market leadership amongst organized retailers, the Company has been able to limit the impact of these adverse conditions.

Sale of Textile unit at Ranjangaon

The Company has entered into an Agreement to Sale (ATS) of the Ranjangaon Processing Unit''s MIDC Land & Building thereon for a total consideration amount of Rs, 168.85 crore.

The Company has also entered into an Agreement to sell the Plant & Machinery situated at Ranjangaon for Rs, 36.25 crore.

6. POLYESTER DIVISION

The Division achieved a turnover of Rs, 1,214.45 crore during the year as compared to Rs, 1,168.45 crore in the previous year. In volume terms there was an increase of about 2%. the raw material prices and PSF prices were stable in the first half of the year, however, the second half of the year saw increased volatility in prices of raw materials, the average capacity utilization during the year was 93%, higher than 91% achieved in the previous year, significantly higher than the industry average of less than 80%.

The market sentiment in the domestic polyester staple fibre industry was reflected in an overall growth of 3% compared to the previous year. It is however expected that the Industry will grow by 5% during the current year. Global cotton acreage in August-July 2016-17 is reported to have further declined benefiting the polyester industry at large. This, together with the benefits likely to accrue to the Division following the introduction of GST is expected to improve the financial performance of the Division.

7. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

During the year under review, Archway Investment Company Ltd. ("Archway") became wholly owned subsidiary of your Company. hereafter, your Company applied for amalgamation of Archway with it which was duly sanctioned by the Hon''ble National Company Law Tribunal, Bench at Mumbai vide its order dated 20th June, 2017.

Pursuant to Section 129(3) of the Companies Act, 2013 ("the Act") read with Rule 5 of the Companies (Accounts) Rules,

2014, the statement containing salient features of the financial statements of the Company''s Associates and Joint Venture (in Form AOC-1) is forming part of the Consolidated Financial Statements.

8. FIXED DEPOSITS

During the year, the Company repaid the deposits aggregating to Rs, 1.24 Lakh, the Company also accepted fixed deposits aggregating to Rs, 30.50 Lakh from 9 depositors.

Total deposits outstanding as on 31st March, 2017 amounted to Rs, 77.61 crore out of which 106 deposits aggregating Rs, 56.80 Lakh had matured, but remained unclaimed.

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

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure A".

10. RELATED PARTY TRANSACTIONS

There were no materially significant transactions with related parties during the financial year under review, which were in conflict with the interest of the Company. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements.

As required under Regulation 23 of SEBI (Listing Obligations and Disclosures) Regulations, 2015, with Stock Exchanges, the Company has formulated a policy on Related Party Transactions which has been put up on the website of the Company: www.bombaydyeing.com/media/bd/corporate/corporatepdf11.pdf

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

12. INSURANCE

All the properties including buildings, plant and machinery and stocks have been adequately insured.

13. ANNUALRETURN

The extract of Annual Return pursuant to the provisions of Section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in form MGT - 9 in "Annexure B" of this Report.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year Dr. (Mrs.) Sheela Bhide resigned as a Director of the Company, the Board has appointed Dr. (Mrs.) Minnie Bodhanwala as an Additional Director of the Company with effect from 29th March, 2017 who holds office upto the date of this Annual General Meeting ("AGM") of the Company in terms of Section 161 of the Companies Act, 2013 ("Act") and is eligible for appointment.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ness N. Wadia retires by rotation and is eligible for re-appointment.

In line with the provisions of Sections 149, 160 and other applicable provisions of the Companies Act, 2013 read with applicable rules made there under Mr. Vinesh Kumar Jairath and Mr. Keki M. Elavia, Additional Directors of the Company, are being appointed as Independent Directors for five consecutive years from their respective date of appointment by the Board.

Necessary resolutions for the appointment/ re-appointment of the aforesaid Directors have been included in the Notice convening the ensuing AGM and requisite details have been provided in the explanatory statement of the Notice, the Board recommends their appointments / re-appointment.

All the Independent Directors have given a declaration that they meet the criteria of independence as laid down under Section 149 of the Act and Regulation 26(3) of SEBI (LODR) Regulations, 2015.

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company.

Nine Board Meetings were duly convened and held during the year and the details of Board/Committee meetings held are provided in the Corporate Governance Report, the gap between meetings was within the period prescribed under the Companies Act, 2013.

Key Managerial Personnel

During the year Mr. Sanjive Arora, joined the Company as Company Secretary on 11th July, 2016.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI (LODR) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance and that of its statutory committees viz. Audit Committee, Stakeholder Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee and that of the individual Directors. the manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

The Board has adopted, on recommendation of the Nomination & Remuneration Committee, a policy for selection and appointment of Directors, Senior Management and their remuneration. A brief detail of the policy is given in the Corporate Governance Report and also posted on the website of the Company: www.bombaydyeing.com/media/bd/corporate/corporatepdf09.pdf

15. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed and there are no material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) they have taken proper and sufficient care for the 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 fraud and other irregularities;

d) they have prepared the Annual Accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2016-17.

16. CORPORATE GOVERNANCE

Pursuant to Regulation 17(7) of SEBI (LODR) Regulations, 2015, a Management Discussion and Analysis Report is given in "Annexure C" to this Report. A separate report on Corporate Governance pursuant to Regulation 34(3) of SEBI (LODR) Regulations, 2015, read with Part C of Schedule V thereof, along with a certificate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to this Report as "Annexure D".

17. PARTICULARS OF EMPLOYEES

The Information as per Section 197 of the Companies Act, 2013, ("the Act") read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report as "Annexure E". However, as per the provisions of Section 136 of the Act, the report and accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' remuneration particulars as required under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which is available for inspection by the Members at the Registered Office / Corporate Office of the Company during business hours on working days of the Company up to the date of the ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company in this regard.

18. AUDITORS Statutory Auditors

The Company''s Auditors, M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants, Mumbai who pursuant to Section 139 of the Companies Act, 2013, retire at the ensuing AGM of the Company and are eligible for re-appointment from the conclusion of current AGM up to the conclusion of the following AGM. TCiey have confirmed their eligibility under Section 141 of the Act and the Rules framed there under for re-appointment as Auditors of the Company. As required under Regulation 33 of SEBI (LODR) Regulations, 2015, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records of the Company are required to be audited, the Directors, on the recommendation of the Audit Committee, appointed M/s. D. C. Dave & Co., Cost Accountants, to audit the cost accounts of the Company for the financial year ending 31st March, 2018 on a remuneration of '' 5,00,000/-(Rupees Five Lakh) plus out of pocket expenses and applicable taxes. the remuneration payable to the Cost Auditor is required to be ratified by the shareholders at the AGM.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Parikh & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. the Report of the Secretarial Auditor is annexed herewith as "Annexure F".

Internal Auditors

M/s. Ernst & Young, Chartered Accountants, were re-appointed as the Internal Auditors of the Company for the financial year 201718 at the Board Meeting held on 22nd May, 2017.

19. SIGNIFICANT OR MATERIAL ORDERS

There were no significant and material orders passed by the regulators or courts or tribunals, which would impact the going concern status and the Company''s operations in future.

20. MATERIAL CHANGES

The Board of Directors of your Company had approved to sell / dispose of its textiles processing Unit at B-28, MIDC Industrial Area, Ranjangaon, Maharashtra, details of which have been provided in item no. 5 of this report.

21. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal Audit plays a key role in providing an assurance to the Board of Directors with respect to the Company having adequate Internal Financial Control Systems, the Internal Financial Control systems provide, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Company''s assets. Details about the adequacy of Internal Financial Controls are provided in the Management Discussion and Analysis Report.

22. CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013, comprising of three directors including Independent Directors, the small allocation available this year will be spent in the current year. (Refer Annexure - G)

23. AUDITORS QUALIFICATIONS

The remarks, if any, either by the Auditors or by the Practicing Company Secretary in their respective reports has been dealt with appropriately in this report.

24. RISK MANAGEMENT POLICY

The Company has formulated a Risk Assessment & Management Policy. Your attention is drawn to the Report on Corporate Governance for details.

25. AUDIT COMMITTEE

The Audit Committee of the Company comprises of7 Independent Directors, the composition of directors and other details are provided in the Corporate Governance Report of the Company. the Company has established a vigil mechanism through the committee, wherein the genuine concerns can be expressed by the employees and directors, the Company has also provided adequate safeguards against victimization of employees who express their concerns, the Company has provided the details of the vigil mechanism in the Whistle Blower Policy in the Corporate Governance Report and also posted these on the website of the Company: www.bombaydyeing.com/bombay-dyeing-corporate-governance.

26. APPRECIATION

The Directors express their appreciation to all employees of the various divisions for their diligence and contribution to performance, the Directors also record their appreciation for the support and co-operation received from franchisees, dealers, agents, suppliers, bankers and all other stakeholders. Last but not the least, the Directors wish to thank all shareholders for their continued support.

On behalf of the Board of Directors

Place: Mumbai NUSLI N. WADIA

Date: 28th June, 2017. Chairman


Mar 31, 2016

The Directors have pleasure in presenting their Report on the business and operations of the Company alongwith the audited financial statements for the year ended 31st March, 2016.

1. FINANCIAL RESULTS:

(Rs, in crore) Financial Year ended

Particulars Standalone Consolidated

31/03/2016 31/03/2015 31/03/2016 31/03/2015

GROSS TURNOVER AND OTHER INCOME 1983.72 2566.75 1995.28 2577.79

Profit before Finance Costs and Depreciation and amortization expenses 231.31 308.98 233.83 310.58

Finance Costs 282.64 227.22 289.92 232.12

Profit/(Loss) before Depreciation and amortization expenses (51.33) 81.76 (56.09) 78.46

Depreciation and amortization expenses 33.91 46.82 34.36 47.27

PROFIT/(LOSS) BEFORE TAX (85.24) 34.94 (90.45) 31.19

Less: Tax (net) - 10.38 0.53 10.68

Less: Minority interest and share of profit/loss in associates - - 0.09 (0.16)

PROFIT/(LOSS) AFTERTAX (85.24) 24.56 (91.09) 20.35

Add: Balance in Statement of Profit and Loss of Previous Year 103.50 100.37 31.18 100.37

Add/(Deduct): Depreciation on assets where remaining life is Nil, (1.46) (1.54) (1.46) (1.54) recognized in retained earnings

Add/(Deduct): Share in jointly controlled entity and accumulated - - 0.18 (68.11) surplus in associates on consolidation

SURPLUS AVAILABLE FOR APPROPRIATIONS

Appropriations to:

Proposed Dividend 10.33 16.52 10.33 16.52

Dividend Distribution Tax 2.10 3.37 2.10 3.37 Transferred to General Reserve

Balance carried to Balance Sheet 5.83 103.50 (72.16) 31.18

Previous year figures have been regrouped where necessary.

2. COMPANY RESULTS AND DIVIDEND:

The Company''s turnover & other income for the year was Rs, 1,984 crore as against Rs, 2,567 crore in the previous year. The loss for the year was Rs, 85.24 crore compared to a profit ofRs, 24.56 crore in the previous year. Lower sales in Textiles compared to previous year; lower capacity utilization resulting in lower production, inventory loss and volatile crude oil prices largely affected the PSF business; and delay in getting the approvals for construction, increase in time related overheads which remained unabsorbed and lower sales of flats due to difficult market scenario affected the Realty business of the Company. It was further compounded by increase in interest costs.

The construction of two towers at Island City Center ("ICC"), Dadar, by Bombay Realty, i.e. One ICC and Two ICC is in full swing and is expected to be completed as per schedule by 2018.

Home & You, which is the Company''s rebranded textile retail business, will cover larger markets and focus would be to grow the Company''s consumer base. It would do so through product, design innovations, offerings to cater diverse consumer preferences and expand product availability on multi channel platforms.

PSF industry saw a dismal growth of 2% in volume in the country, which was mainly met through increased cheap imports from China. This has in turn affected the Company''s PSF business. The PSF Division is focusing on innovative product mix and cost reduction initiatives in order to reduce its cost.

The Directors have recommended a dividend of 0.50 paise per equity share ofRs, 2/- which is subject to shareholders'' approval.

Despite loss in the year under review, your Directors have recommended dividend out of the balance of surplus in Statement of Profit & Loss.

3. CONSOLIDATED FINANCIAL RESULTS:

The Company has prepared Consolidated Financial Statements in accordance with the applicable Accounting Standards as prescribed under the Companies (Accounts) Rules, 2014 of the Companies Act, 2013. The Consolidated Financial Results reflect the results of the Company and that of its subsidiary and associates. As required under Regulation 34 of the SEBI [Listing Obligations and Disclosure Requirements ("LODR")] Regulations, 2015, the Audited Consolidated Financial Statements together with the Independent Auditors'' Report thereon are annexed and form part of this Report.

The summarized consolidated financial results are provided above.

4. BOMBAY REALTY:

The business of Bombay Realty had to face serious challenges in the past two years on account of weak global clues, general economic slowdown, high interest rates and delay in the receipt of regulatory approvals. This resulted in a slowdown in construction activity, sales and build up of unsold inventory.

The revenues from real estate activity for the year was Rs, 470 crore as compared to Rs, 444 crore in financial year 2014-15. With the receipt of some of the regulatory approvals and the consequent pick up in construction activity, the Company is now fully geared to complete the construction as per schedule and ensure timely delivery of the two towers.

The Company has appointed Hill International Project Management Pvt. Ltd. as the Project Management Consultant (PMC), Sunjaay Athanki Projects Management Pvt. Ltd. (earlier known as Gardiner and Theobald Construction and Property Consultancy Pvt. Ltd.) as the Professional Quantity Surveyor and Larsen & Toubro Limited as General Contractor to undertake the construction work for both the towers of ICC. The construction on the Slum project at ICC has also commenced and handover is expected as per schedule by August, 2018.

Construction of The Plaza'', a Luxury High-Street for International Brands at Worli, which was earlier held up due to legal issues, is expected to re-start in the current financial year.

5. HOME & YOU:

The domestic textile market experienced volume as well as value pressure led by weak demand. The influx of cheaper alternatives from unorganized sector and international markets only compounded the impact on the retail market. The Division''s gross revenue for 2015-16 wasRs, 306 crore as againstRs, 407 crore in the previous year.

Sale of Textile unit at Ranjangaon

The Members of your Company through postal ballot in June 2015, had approved to sell/dispose of its textiles processing unit at B-28, MIDC Industrial Area, Ranjangaon, Maharashtra, ("Undertaking") to Oasis Procon Pvt. Ltd., New Delhi ("Oasis") together with all specified tangible and intangible assets in relation to the Undertaking (excluding its brand name and the specific liabilities), on a slump sale basis as a going concern and on an "as is where is" basis for a consideration ofRs, 230 crore. The net proceeds from the sale of the Undertaking was to be utilized to repay loans and reduce the interest burden of the Company.

As per the terms and conditions reflected in the agreed Term Sheet, the prospective buyers were obliged to complete the transaction not later than 31st July, 2015. However, they failed to make the requisite payments under the contract and the sale deed could not be completed. The Company is in the process of finding a new buyer for the said Unit.

6. POLYESTER DIVISION:

The Division achieved a turnover of Rs, 1,168 crore during the year as compared to Rs, 1,498 crore in the previous year. In volume terms the reduction was about 6%. Sharp drop in crude oil and petrochemical prices during the year resulted in steep decrease in polyester prices and thereby reduction in turnover of the Division. The average capacity utilization at 91% was lower than 93% achieved in the previous year but was significantly better than the industry average capacity utilization of below 80% during the financial year.

The market sentiment in the domestic polyester staple fiber industry was reflected in an overall growth of 2% compared to the previous year. However, PSF imports increased by approximately 25% in volume far exceeding the growth in domestic demand. Increased volatility in raw material prices and increased imports at significantly lower prices have posed challenges to the Company''s Polyester business.

7. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES:

Pursuant to Section 129(3) of the Companies Act, 2013 ("the Act") read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Company''s Subsidiary, Associates and Joint Venture (in Form AOC-1) is forming part of the Consolidated Financial Statements. Your Company does not have any Material Subsidiary [as defined under the SEBI (LODR) Regulations, 2015] as on 31st March, 2016.

Pursuant to Section 136 of the Act, the Company is exempted from attaching to its Annual Report, the Annual Report of the Subsidiary Company viz. Archway Investment Company Limited.

The financial statement of the Subsidiary Company is kept open for inspection by the shareholders at the Corporate Office of the Company. The Company shall provide the copy of the financial statements of its Subsidiary Company to the shareholders upon their request free of cost. The statements are also available on the website of the Company at www.bombaydyeing.com.

8. FIXED DEPOSITS:

During the year, the Company repaid the deposits aggregating to Rs, 95.47 crore. The Company also accepted fixed deposits aggregating toRs, 77.06 crore from 5,119 depositors.

Total deposits outstanding as on 31st March, 2016 amounted to Rs, 78.54 crore out of which 247 deposits aggregatingRs, 1.36 crore had matured, but remained unclaimed.

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

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure A".

10. EMPLOYEE STOCK OPTION SCHEME (ESOS):

The Information pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, erstwhile SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and as per Section 62(1)(b) of the Companies Act, 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 has been provided in "Annexure B" to this Report.

11. RELATED PARTY TRANSACTIONS:

The Company has formulated a policy on dealing with Related Party Transactions. The policy is disclosed on the website of the Company: (we blink http://teknowits.com/bombaydyeing/ Corporategov.aspx). All transactions entered into with Related Parties as defined under the Companies Act, 2013, Clause 49 of the Listing Agreement and Regulation 2(1)(zc) and Regulation 23 of SEBI (LODR) Regulations, 2015, during the financial year were in the ordinary course of business and on an arm''s length basis and do not attract the provisions of Section 188 of the Companies Act, 2013.

During the year, the Company had not entered into any contract/ arrangement/transactions with related parties which can be considered as material in nature. The related party transactions are disclosed under Note No. 50 of the Notes to Financial Statements for the financial year 2015-16.

12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Note No. 51 of the Notes to the Financial Statements.

13. INSURANCE:

All the properties including buildings, plant and machinery and stocks have been adequately insured.

14. ANNUAL RETURN:

The extract of Annual Return pursuant to the provisions of Section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in form MGT - 9 in "Annexure C" of this Report.

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

At the Annual General Meeting (AGM) held on 6th August, 2015, the members of the Company had appointed Dr. (Mrs.) Sheela Bhide as Independent Director for a term of five years with effect from 6th August, 2015 up to 5th August, 2020.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Nusli N. Wadia (DIN: 00015731) retires by rotation and is eligible for re-appointment.

Necessary information for the re-appointment of Mr. Nusli N. Wadia has been included in the notice convening the ensuing AGM and requisite details have been provided in the explanatory statement of the notice. Your directors recommend his re-appointment.

Mr. Jehangir N. Wadia was appointed as the Managing Director of the Company for a period of five years from 1st April, 2011 up to 31st March, 2016. The Board of Directors at its Meeting held on 31st March, 2016, have re-appointed him as the Managing Director of The Company for a further period of five years from 1st April, 2016 up to 31st March, 2021, subject to the approval of the members of the Company.

Excess remuneration payable to Mr. Jehangir N. Wadia, Managing Director for the financial year 2015-16, is subject to the approval of Central Government, in respect of which the Company has made an application and the approval is awaited.

All the Independent Directors have given a declaration under sub- section (7) of section 149 of the Companies Act, 2013 ("the Act") that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 26(3) of SEBI (LODR) Regulations, 2015.

During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company.

Eight Board Meetings were duly convened and held during the year and the details of board/committee meetings held are provided in the Corporate Governance Report. The gap between meetings was within the period prescribed under the Companies Act, 2013.

Key Managerial Personnel

During the year under review, Mr. J. C. Bham retired as Company Secretary, with effect from the close of business hours on 31st May, 2015.

Mr. K. Subharaman joined as the Company Secretary of the Company with effect from 1st June, 2015. He resigned as the Company Secretary of the Company with effect from close of the business hours on 30th April, 2016. The new Company Secretary is expected to join in July, 2016.

Mr. Vinod Hiran, joined as the Chief Financial Officer ("CFO") of the Company with effect from 19th May, 2015 and ceased to be the CFO of the Company from 3rd November, 2015. Mr. Puspamitra Das was appointed as the CFO of the Company at the Board Meeting held on 31st March, 2016 and has joined the Company on 4th April, 2016.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013, and revised Clause 49 of the Listing Agreement and Regulation 17(10) of SEBI (LODR) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance and that of its statutory committees viz. Audit Committee, Stakeholder Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee and that of the individual directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

The Board has adopted, on recommendation of the Nomination & Remuneration Committee, a policy for selection and appointment of Directors, Senior Management and their remuneration. A brief detail of the policy is given in the Corporate Governance Report and also posted on the website of the Company (we blink http:// teknowits.com/Bombay dyeing/Corporategov.aspx).

16. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed and there are no material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

c) they have taken proper and sufficient care for the 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 fraud and other irregularities;

d) they have prepared the Annual Accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2015-16.

17. CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement and Regulation 17(7) of SEBI (LODR) Regulations, 2015, a Management Discussion and Analysis Report is given in "Annexure D" to this Report. A separate report on Corporate Governance pursuant to Clause 49 of the Listing Agreement and Regulation 34(3) and 53(f) of SEBI (LODR) Regulations, 2015, along with a certificate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to this Report as "Annexure E".

18. PARTICULARS OF EMPLOYEES:

The Information as per Section 197(12) of the Companies Act, 2013, ("the Act") read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report as "Annexure F". However, as per the provisions of Section 136 of the Act, the report and accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' remuneration particulars as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which is available for inspection by the Members at the Corporate Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company in this regard.

19. AUDITORS:

Statutory Auditors

The Company''s Auditors, M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai who pursuant to Section 139 of the Companies Act, 2013, retire at the ensuing Annual General Meeting (AGM) of the Company and are eligible for re-appointment from the conclusion of current AGM up to the conclusion of the following AGM. They have confirmed their eligibility under Section 141 of the Act and the Rules framed there under for re-appointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement and Regulation 33.1 (d) ii of SEBI (LODR) Regulations, 2015, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its Polyester and Real Estate Divisions are required to be audited. The Directors, on the recommendation of the Audit Committee, appointed M/s. N. I. Mehta & Co. to audit the cost accounts of the Company for the financial year ending 31st March, 2016 on a remuneration ofRs, 5,00,000/- (Rupees Five Lakh) plus out of pocket expenses and applicable taxes. The remuneration payable to the Cost Auditor is required to be ratified by the shareholders at the AGM.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Parikh & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as "Annexure G".

Internal Auditors

M/s. Aneja & Associates ceased to be internal auditors of the Company with effect from the closing of business hours on 31st December, 2015.

At the Board Meeting held on 18th December, 2015, M/s. Ernst & Young, Chartered Accountants, were appointed as the Internal Auditors of the Company.

20. SIGNIFICANT AND MATERIAL ORDERS:

There were no significant and material orders passed by the regulators or courts or tribunals, which would impact the going concern status and the Company''s operations in future.

21. MATERIAL CHANGES:

The Board of Directors of your Company had approved to sell/ dispose of its textiles processing Unit at B-28, MIDC Industrial Area, Ranjangaon, Maharashtra, details of which have been provided on Page No. 16 of this report.

22. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Internal Audit plays a key role in providing an assurance to the Board of Directors with respect to the Company having adequate Internal Control Systems. The Internal Control systems provide, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Company''s assets. Details about the adequacy of Internal Financial Controls are provided in the Management Discussion and Analysis Report.

23. CORPORATE SOCIAL RESPONSIBILITY:

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The CSR Committee was constituted by the Board of Directors of the Company comprising of three directors including Independent Directors. The CSR policy of the Company and the details about the development of CSR Policy and initiatives taken by the Company on Corporate Social Responsibility during the year are in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014 in "Annexure H" to this report provides the requisite details.

24. AUDITORS QUALIFICATIONS:

The remarks, if any, either by the Auditors or by the Practicing Company Secretary in their respective reports have been dealt with appropriately in this report.

25. RISK MANAGEMENT POLICY:

The Company has formulated a Risk Assessment & Management Policy. Your attention is drawn to the Report on Corporate Governance for details.

26. AUDIT COMMITTEE:

The Audit Committee of the Company comprises of 5 Independent Directors. The composition of directors and other details are provided in the Corporate Governance Report of the Company. The Company has established a vigil mechanism through the committee, wherein the genuine concerns can be expressed by the employees and directors. The Company has also provided adequate safeguards against victimization of employees who express their concerns. The Company has provided the details of the vigil mechanism in the Whistle Blower Policy in the Corporate Governance Report and also posted these on the website of the Company: (http://teknowits.com/bombaydyeing/Corporategov. aspx).

27. CHANGE OF REGISTRAR AND SHARE TRANSFER AGENT:

Securities and Exchange Board of India (SEBI) vide its Order - PR No. 66/2016 dated 22nd March, 2016 had passed an interim order against the Company''s Registrar & Transfer Agent (R&TA),

Sharepro Services (India) Pvt. Ltd. ("Sharepro") inter-alia restraining Sharepro and several entities linked with the management of Sharepro from buying, selling or dealing in the securities market or associating themselves with securities market, either directly or indirectly, in any manner, till further directions. Companies who are clients of Sharepro had also been advised by SEBI to change the R&TA.

The Company''s agreement with Sharepro came to an end on 31st March, 2016 by efflux of time.

In line with the SEBI directive, the Company at its Board Meeting held on 31st March, 2016, has appointed M/s. KARVY COMPUTERSHARE PRIVATE LIMITED, ("Karvy") having its Registered Office at "Karvy House" No 46, Avenue 4, Street No. 1, Banjara Hills, Hyderabad 500 034, as the Company''s Registrar and Transfer Agent with effect from 1st April, 2016.

Members are requested to note the change in the Company''s R&TA from Sharepro to Karvy.

28. LISTING AGREEMENT:

The Securities and Exchange Board of India (SEBI), on 2nd September, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective 1st December, 2015. Accordingly, all listed companies were required to enter into the Listing Agreement within six months from the effective date. The Company entered into Listing Agreement with BSE Limited and National Stock Exchange of India Limited in December 2015.

29. APPRECIATION

The Directors express their appreciation to all employees of the various divisions for their diligence and contribution to performance. The Directors also record their appreciation for the support and co-operation received from franchisees, dealers, agents, suppliers, bankers and all other stakeholders. Last but not the least, the Directors wish to thank all shareholders for their continued support.

On behalf of the Board of Directors

Place: Mumbai NUSLI N.WADIA

Date: 27th May, 2016. Chairman


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their Report on the business and operations of the Company along with the audited financial statements for the year ended March 31, 2015.

1. FINANCIAL RESULTS:

(Rs. in crore) Financial Year ended

Particulars Standalone

31/03/2015 31/03/2014

GROSS TURNOVER AND OTHER INCOME 2,566.75 2,822.68

Profit before Finance Costs and Depreciation 308.98 284.18 and amortization expenses

Finance Costs 227.22 191.02

Profit before Depreciation and amortization 81.76 93.16 expenses

Depreciation and amortization expenses 46.82 60.02

PROFIT BEFORE TAX 34.94 33.14

Less: Tax (net) 10.38 8.80

Less: Minority interest and share of profit/ - - loss in associates

PROFIT AFTER TAX 24.56 24.34

Add: Balance in Statement of Profit and Loss 100.37 97.79 of Previous Year

Add / (Deduct): Depreciation on assets where remaining life is Nil, recognized in retained earnings

Add / (Deduct): Share in jointly controlled entity and accumulated surplus in associates on consolidation

SURPLUS AVAILABLE FOR APPROPRIATIONS Appropriations to:

Proposed Dividend 16.52 16.52

Dividend Distribution Tax 3.37 2.81

Transferred to General Reserve - 2.43

Balance carried to Balance Sheet 103.50 100.37

Financial Year ended Particulars Consolidated 31/03/2015

GROSS TURNOVER AND OTHER INCOME 2,577.79

Profit before Finance Costs and Depreciation 310.58 and amortization expenses

Finance Costs 232.12

Profit before Depreciation and amortization 78.46 expenses

Depreciation and amortization expenses 47.27

PROFIT BEFORE TAX 31.19

Less: Tax (net) 10.68

Less: Minority interest and share of profit/ (0.16) loss in associates

PROFIT AFTER TAX 20.35

Add: Balance in Statement of Profit and Loss 100.37 of Previous Year

Add / (Deduct): Depreciation on assets where remaining life is Nil, recognized in retained earnings

Add / (Deduct): Share in jointly controlled (68.11) entity and accumulated surplus in associates on consolidation

SURPLUS AVAILABLE FOR APPROPRIATIONS Appropriations to:

Proposed Dividend 16.52

Dividend Distribution Tax 3.37

Transferred to General Reserve -

Balance carried to Balance Sheet 31.18

Previous year figures have been regrouped where necessary.

2. COMPANY RESULTS AND DIVIDEND

The Company''s turnover for the year was Rs. 2,512 crore as against Rs. 2,783 crore in the previous year. The profit for the year was Rs. 24.56 crore, which is similar to the previous year''s figure of Rs. 24.34 crore.

Bombay Realty has commenced the construction of two towers at Island City Center ("ICC"), Dadar, i.e. One ICC and Two ICC which is expected to be completed as per schedule. It has also resumed construction work at The Plaza, its Luxury High-Street for International brands at the Wadia International Center, Worli and the same is likely to be completed in the financial year 2015-16.

Home & You, which is the Company''s new and rebranded retail business, will see all its 300 stores refurbished with a ''new'' store, service and product experience. The Company will continue to invest and strengthen its product categories and their availability.

Polyester Staple Fibre (PSF) demand both in India and across overseas has grown by 4 to 5 % p.a. and this growth is expected to continue in the foreseeable future. The PSF Division is focusing on innovative product mix and cost reduction initiatives in order to reduce its cost.

The Directors have recommended a dividend of Rs. 0.80 per equity share of Rs. 2/- which is the same as per the previous year, subject to shareholders'' approval.

3. BOMBAY REALTY

The general economic slowdown witnessed in the last two years, coupled with high interest rates and delay in regulatory approvals seriously affected home-buying decisions, leading to a slowdown in sales and build up of unsold inventory across the market. Consequently, the revenues from real estate activity of your Company were Rs. 444 crore as compared to Rs. 803 crore in the previous year.

The issues of land handover and ''Stop Work Notice'' that were holding up the development projects of the Company have been resolved with the Order passed by the Hon''ble High Court, Mumbai. The Company has given advance possession of 32,829.02 sq. mt. of land to MCGM and 33,822.89 sq. mt. of land to MHADA. The Company is now concentrating on construction and timely delivery of the two towers at Dadar. The Company has appointed Hill International Project Management Pvt. Ltd. as the Project Management Consultant, Gardiner and Theobald Construction and Property Consultancy Pvt. Ltd. as the Professional Quantity Surveyor and many other international sub consultants. Larsen & Toubro Limited has been appointed as General Contractor to undertake the construction. Further, construction on the Slum Project at ICC has also commenced and handover is expected by August 2017.

Construction of ''The Plaza'', a Luxury High-Street for International Brands at Worli, which was held up due to legal issues has resumed and is now expected to be completed in the financial year 2015-16.

4. HOME & YOU

This Division''s turnover has increased from Rs. 535 crore to Rs. 570 crore for the year ended March 31, 2015 recording a growth of 6% over the previous year. Export turnover for the financial year 2014-15 was Rs. 54.85 crore as against previous year turnover of Rs. 67.72 crore.

Despite sluggish consumer demand and sentiment, domestic business grew by a sizeable 16%. Growth was driven by expansion in the retail channel and launch of new & differentiated products and designs in the Company''s core categories of bed and bath. The Company''s investment in brand building, as part of the growth & market strategy, resulted in a market share gain of 3% and helped it further consolidate its leadership position.

The Company had won the CNBC Textile Conclave 2013 Award "Best Domestic Retail Brand - Made Ups & Home Textile", "Brand Revitalization Award" by the World Brand Congress 2013 and the "Brand Leadership Award" in the retail sector, also by the World Brand Congress.

The Company has also won the Asia''s Best Marketing Brands 2014, conferred by World Consulting & Research Corporation - 2014.

Sale of Textile unit at Ranjangaon

The Board of Directors of your Company at its meeting held on May 25, 2015 have approved to sell / dispose of its textiles processing unit at B-28, MI DC Industrial Area, Ranjangaon, Maharashtra, ("Undertaking'') to Oasis Procon Pvt. Ltd., New Delhi ("Oasis") together with all specified tangible and intangible assets in relation to the Undertaking (excluding its brand name and the specific liabilities), on a slump sale basis as a going concern and on an "as is where is" basis for a consideration of Rs. 230 crore. The net proceeds from the sale of the Undertaking will be utilized to repay loans and reduce the interest burden of the Company.

The sale is conditional upon Shareholders'' approval of the Company and other customary closing conditions including legal due diligence. As a term of the sale, the Company has agreed not to directly and/or indirectly engage in the business of export of bed linen/bed linen fabric with any person in the territory of the United States of America for a period of 5 (five) years from the closing date.

The sale of Undertaking is not likely to have any impact on the Company''s existing retail business; Home & You.

5. POLYESTER DIVISION

The Division achieved a turnover of Rs. 1,498 crore during the year as compared to Rs. 1,444 crore in the previous year. The average capacity utilization at 93%, was higher than 85% achieved in the previous year and significantly better than the industry average capacity utilization of 80% during the year.

The domestic polyester industry witnessed mixed market sentiments during financial year 2014-15, reflecting an overall moderate growth of 4% compared to the previous year. However, the Polyester Division has recorded a sales volume growth of 15% during the year.

6. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Company''s Subsidiaries'', Associates and Joint Ventures (in Form AOC-1) is forming part of the Consolidated Financial Statements. Pursuant to Section 136 of the Companies Act, 2013 ("the Act"), the Company is exempted from attaching to its Annual Report, the Annual Report of the Subsidiary Company viz. Archway Investment Company Limited.

The financial statement of the subsidiary company is kept open for inspection by the shareholders at the Registered Office of the Company. The Company shall provide the copy of the financial statement of its subsidiary company to the shareholders upon their request free of cost. It is also available on the website of the Company.

7. FIXED DEPOSITS

During the year, the Company repaid the deposits aggregating to Rs. 32.93 crore. No new deposits were accepted.

Total deposits outstanding as on March 31, 2015 amounted to Rs. 96.95 crore out of which 466 deposits aggregating Rs. 2.28 crore had matured, but remained unclaimed.

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

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure A".

9. EMPLOYEE STOCK OPTION SCHEME (ESOS)

The Information pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, erstwhile SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and as per Section 62(1)(b) of the Companies Act, 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 has been provided in "Annexure B" to this Report.

10. RELATED PARTY TRANSACTIONS

The Company has formulated a policy on dealing with Related Party Transactions. The policy is disclosed on the website of the Company: (weblink http://teknowits.com/bombaydyeing/ Corporategov.aspx). All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year were in the ordinary course of business and on an arm''s length basis and do not attract the provisions of Section 188 of the Companies Act, 2013.

During the year, the Company had not entered into any contract/ arrangement/transactions with related parties which can be considered as material in nature. The related party transactions are disclosed under Note No. 50 of the Notes to Financial Statements for the financial year 2014-15.

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Note No. 51 of the Notes to the Financial Statements.

12. INSURANCE

All the properties including buildings, plant and machinery and stocks have been adequately insured.

13. ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in form MGT - 9 in "Annexure C" of this Report.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

At the Annual General Meeting of the Company held on August 8, 2014, the members of the Company had appointed the existing Independent Directors i.e. Mr. A. K. Hirjee, Mr. S. S. Kelkar, Mr. R. A. Shah, Mr. S. Ragothaman, Mr. S. M. Palia and Mr. Ishaat Hussain, as Independent Directors for a term of five years with effect from August 8, 2014 upto August 7, 2019.

The Board of Directors has appointed Dr. (Mrs.) Sheela Bhide as an Additional Director, designated as Independent Director of the Company. Her appointment as an Independent Director is for a term of five years with effect from August 6, 2015 upto August 5, 2020.

In accordance with the provisions of the Act and the Company''s Articles of Association, Mr. Ness N. Wadia retires by rotation and is eligible for re-appointment.

Necessary resolutions for the appointment / reappointment of Dr. (Mrs.) Sheela Bhide and Mr. Ness Wadia, have been included in the notice convening the ensuing AGM and requisite details have been provided in the explanatory statement of the notice. Your Directors recommend their appointments / reappointment.

The resignation of Ms. Vinita Bali as a Director of the Company was taken on record by the Board..

All the Independent Directors have given a declaration under sub-section (7) of section 149 of the Companies Act, 2013 ("Act") that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Clause 49 of the listing agreement. Excess Remuneration payable to Mr. Jehangir N. Wadia, Managing Director, is subject to the approval of the Central Government, in respect of which the Company has made an application and the approval is awaited.

During the year, six Board Meetings were duly convened and held, the details of which are given in the Corporate Governance Report. The gap between meetings was within the period prescribed under the Companies Act, 2013.

Key Managerial Personnel

Mr. Raghuraj Balakrishna resigned as Chief Financial Officer of the Company with effect from close of the office hours on August 8, 2014.

Mr. Vinod Hiran has been appointed as Chief Financial Officer of the Company with effect from April 24, 2015.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013, and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance and that of its statutory committees viz. Audit Committee, Stakeholder Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee and that of the individual directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

The Board has adopted, on recommendation of the Nomination & Remuneration Committee, a policy for selection and appointment of Directors, Senior Management and their remuneration. A brief detail of the policy is given in the Corporate Governance Report and also posted on the website of the Company: (weblink http:// teknowits.com/ bombaydyeing/Corporategov.aspx).

15. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed and there are no material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) they have taken proper and sufficient care for the 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 fraud and other irregularities;

d) they have prepared the Annual Accounts on a going concern basis.

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2014-15.

16. CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, a Management Discussion and Analysis Report is given in "Annexure D" to this Report. A separate report on Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to this Report as "Annexure E".

17. PARTICULARS OF EMPLOYEES

The Information as per Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report as "Annexure F". However, as per the provisions of Section 136 of the Act, the report and accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' remuneration particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

18. AUDITORS Statutory Auditors

The Company''s Auditors, M/s. Kalyaniwalla & Mistry, Chartered Accountants, Mumbai who pursuant to Section 139 of the Companies Act, 2013, retire at the ensuing Annual General Meeting (AGM) of the Company and are eligible for re-appointment from the conclusion of current AGM up to the conclusion of the following AGM. They have confirmed their eligibility under Section 141 of the Act and the Rules framed thereunder for re-appointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013, read with Rule 14 of the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its Textiles, Polyester and Real Estate Divisions are required to be audited. The Directors, on the recommendation of the Audit Committee, appointed M/s. N. I. Mehta & Co. to audit the cost accounts of the Company for the financial year ending 31st March, 2016 on a remuneration of Rs. 5,00,000/- (Rupees Five Lakh) plus applicable taxes. The remuneration payable to the Cost Auditor is required to be ratified by the shareholders at the AGM.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013, and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Parikh & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as "Annexure G".

19. SIGNIFICANT OR MATERIAL ORDERS

There were no significant and material orders passed by the regulators or courts or tribunals, which would impact the going concern status and the Company''s operations in future.

20. MATERIAL CHANGES

The Board of Directors of your Company had approved to sell / dispose of its textiles processing unit at B-28, MIDC Industrial Area, Ranjangaon, Maharashtra. The brief description of transaction is given in point no. 4 i.e. Home & You in this report.

21. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY Internal Audit plays a key role in providing an assurance to the Board of Directors with respect to the Company having adequate Internal Control Systems. The Internal Control Systems provide, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Company''s assets. The details about the adequacy of Internal Financial Controls are provided in the Management Discussion and Analysis Report.

22. CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The CSR Committee was constituted by the Board of Directors of the Company comprising of three directors including Independent Directors. The CSR Policy of the Company and the details about the development of CSR Policy and initiatives taken by the Company on Corporate Social Responsibility during the year are in terms of the Companies (Corporate Social Responsibility Policy) Rules, 2014; details of which are appended to this Report as "Annexure H".

23. AUDITORS QUALIFICATIONS

The remarks, if any, either by the Auditors or by the Practising Company Secretary in their respective reports have been dealt with, appropriately in this report.

24. RISK MANAGEMENT POLICY

The Company has formulated a Risk Assessment & Management Policy. The details of the Risk Management are covered in the Corporate Governance Report.

25. AUDIT COMMITTEE

The Audit Committee of the Company comprises of 5 Independent Directors. The composition of directors and other details are provided in the Corporate Governance Report of the Company. The Company has established a vigil mechanism through the Committee, wherein the genuine concerns can be expressed by the employees and Directors. The Company has also provided adequate safeguards against victimization of employees who express their concerns. The Company has provided the details of the vigil mechanism in the Whistle Blower Policy as stated in Corporate Governance Report and also posted on the website of the Company: (http://teknowits.com/bombaydyeing/ Corporategov.aspx).

26. APPRECIATION

The Directors express their appreciation to all employees of the various divisions for their diligence and contribution to performance. The Directors also record their appreciation for the support and co-operation received from franchisees, dealers, agents, suppliers, bankers and all other stakeholders. Last but not the least, the Directors wish to thank all shareholders for their continued support.

On behalf of the Board of Directors

Place: Mumbai NUSLI N.WADIA Date: 25th May, 2015. Chairman


Mar 31, 2014

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2014.

1. FINANCIAL RESULTS:

(Rs. in crores)

For the Year For the Year ended 31st ended 31st March, 2014 March, 2013

GROSS TURNOVER AND 2822.68 2501.37

OTHER INCOME

Profit before Finance Costs and Depreciation and amortization 284.18 334.58 expenses

Finance Costs 191.02 174.74

Profit before Depreciation and 93.16 159.84 amortization expenses

Depreciation and amortization 60.02 62.03 expenses

PROFIT BEFORE TAX 33.14 97.81

Less: Tax (net) 8.80 22.11

PROFIT AFTER TAX 24.34 75.70

Add: Balance in Statement of 97.79 53.82

Profit and Loss of Previous Year

SURPLUS AVAILABLE FOR 122.13 129.52

APPROPRIATIONS

Appropriations to:

Proposed Dividend 16.52 20.66

Dividend Distribution Tax 2.81 3.50

Transferred to General Reserve 2.43 7.57

Balance carried to Balance 100.37 97.79 Sheet

Previous year figures have been regrouped where necessary.

2. COMPANY RESULTS AND DIVIDEND

The Company''s turnover for the year rose to Rs. 2,783 crores from Rs. 2,458 crores in the previous year, registering a growth of 13%. Despite the growth in turnover, the profitability of the Company was adversely affected by the general economic slowdown, sustained inflationary pressures leading to higher interest rates and a volatile foreign exchange market. It is expected that with a stable and strong Government, the overall economic scenario will change for the better. We are already seeing some signs of that. Exchange rates have stabilized to a great extent and the Reserve Bank of India has signaled an end to the increasing interest rate cycle. Inflation also appears to be under control.

On the business front, Textile exports reported a substantial increase last year and the momentum is likely to continue in the current year. A higher rate of economic growth will also mean higher disposable income for domestic consumers and consequently a higher demand for quality textiles. The domestic retail business witnessed a strong turnaround and robust growth driven by greater investments in brand building, new product introductions and expansion & modernisation of the retail network.

Polyester Staple Fibre (PSF) markets both in India and across Western economies are showing signs of increasing demand which is expected to grow by 4 to 4.5% p.a. in the coming years. The impact of growing demand coupled with the Company''s focus on specialty fibre and an innovative product mix will lead to improved financial results of the Division. Also, cost reduction programs like the substitution of coal as fuel for the boiler instead of gas, will improve the Company''s cost competitiveness and profitability.

With all the regulatory road blocks out of the way, the Realty Division will soon commence construction of two Towers, One ICC & Two ICC, lending further strength to the Company''s operations.

Despite the drop in profitability in the current year and in view of the improved business environment in the future, your Directors have recommended a dividend of Rs. 0.80 per equity share of Rs. 2/- against Rs. 1/- per equity share in the previous year, subject to shareholders'' approval.

3. REAL ESTATE DIVISION:

The general economic slowdown witnessed in the last two years, coupled with high interest rates seriously affected home buying decisions, and led to a slowdown in sales and build up of unsold inventory across the market. Despite this, revenue from real estate activity for your Company was Rs. 803 crores as compared to Rs. 667 crores in the previous year. Operating Profit for the year was Rs. 372 crores as against Rs. 350 crores in the previous year.

The issue of land handover that was holding up the development project of the Company has been resolved with the Order passed by the Hon''ble High Court, Mumbai in November 2013. Work on the two towers i.e. One ICC and Two ICC is now expected to commence shortly.

Looking ahead, the investment sentiment is expected to improve with a strong new government coming to power at the Center and expected to undertake positive and crucial reforms in this sector. This will lead to substantial improvement in the performance of the Realty Division.

The initiation of major reforms in 2013 in the form of Real Estate Regulatory (RER) Bill and Land Acquisition, Resettlement and Rehabilitation (LARR) Bill are expected to boost the confidence of investors and home buyers.

4. TEXTILE DIVISION:

Textile turnover has increased from Rs. 455 crores in the previous year to Rs. 535 crores for the year ending 31st March, 2014 i.e. a growth of 18% over the previous year.

Domestic business grew by 12% led by mix improvement. Export turnover at Rs. 73.40 crore grew by 45% over the previous year, due to significant marketing efforts which led to an increase in the customer base and introduction of Chief Value Cotton (CVC) products. However, margins remained under pressure due to severe competition from China and other markets.

- Company''s expansion of its domestic retail business has been received very well by the market and the Company will continue to invest and strengthen its brands and their availability. Simultaneously, several new products in the existing space of bed & linen will be introduced to diversify the product range.

5. POLYESTER DIVISION:

- Division achieved a turnover of Rs. 1,445 crores during the year as compared to Rs. 1,328 crores in the previous year. The average capacity utilization of 85.1%, was higher than 81.5% achieved in the previous year and significantly better than industry average capacity utilization of 70% during the year.

- domestic polyester industry witnessed mixed market sentiments during FY 2013-14, reflecting an overall moderate and cautious growth pattern.

- margins of PSF Division were adversely impacted due to volatility in the raw material prices against the backdrop of fluctuating prices of petrochemicals, volatility in the Rupee - US Dollar exchange rate and sharp increase in conversion cost resulting from an increase in re-liquidified natural gas prices. However, demand conditions have improved both in the domestic and overseas markets. T is, together with product mix changes and cost control initiatives that are yielding good results, should lead to an enhanced financial performance.

6. FIXED DEPOSITS:

During the year, the Company continued to renew/repay maturing deposits. However, no new deposits were accepted.

Total deposits outstanding as on 31st March, 2014 amounted to Rs. 129.89 crores out of which 55 deposits aggregating Rs. 0.30 crores had matured, but remained unclaimed.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 ("the Act") read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure ''A'' to this Report.

8. EMPLOYEE STOCK OPTION SCHEME (ESOS):

Requisite disclosure in respect of the Employee Stock Option Scheme in terms of Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, has been provided in Annexure ''B'' to this Report.

9. INSURANCE:

All the properties including buildings, plant and machinery and stocks have been adequately insured.

10. DIRECTORS:

During the year Mr. Keshub Mahindra stepped down as Director of the Company after a long association of more than four decades. The Directors wish to place on record their deep appreciation of the immense contribution made by Mr. Mahindra to the growth and development of the Company''s business.

Mr. Durgesh Mehta resigned as Joint Managing Director of the Company on 15th February, 2014 and ceased to be a Director as from that date.

In accordance with the provisions of the Act and the Company''s Articles of Association, Mr. Nusli N. Wadia retires by rotation and is eligible for re-appointment.

In line with the provisions of Section 149 and other applicable provisions of the Companies Act, 2013, Mr. A. K. Hirjee, Mr. S. S. Kelkar, Mr. R. A. Shah, Mr. S. Ragothaman, Mr. S. M. Palia and Mr. Ishaat Hussain, directors of the Company, are being appointed as independent directors for five consecutive years from the date of the ensuing Annual General Meeting.

Necessary resolutions for the appointment/reappointment of the aforesaid directors have been included in the notice convening the ensuing AGM and requisite details have been provided in the explanatory statement of the notice. Your directors commend their appointments/reappointment.

All the directors of the Company have confirmed that they are not disqualified from being appointed as directors in terms of Section 274(1)(g) of the Companies Act, 1956 and Section 164(2) of the Companies Act, 2013.

11. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations from the Operating Management, confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) they have, in selection of the accounting policies consulted the statutory Auditors and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

12. CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement a Management Discussion and Analysis Report is given in Annexure ''C'' to this Report. A separate report on Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to this Report as Annexure ''D''.

13. PARTICULARS OF EMPLOYEES:

The Information required under Section 217(2A) of the Act read with the Rules framed there under forms part of this Report. However, as per provision of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to all shareholders excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Company''s Registered Office or Administrative Office.

14. AUDITORS:

Messrs. Kalyaniwalla & Mistry, Chartered Accountants, who are the Statutory Auditors of the Company, hold office up to the conclusion of the ensuing Annual General Meeting. Pursuant to the provisions of Section 139 of the Companies Act, 2013 ("the Act") and the rules made There under, the Board recommends the re-appointment of Messrs. Kalyaniwalla & Mistry as auditors of the Company. If reappointed, they will hold office from the conclusion of the current AGM to the conclusion of the following AGM.

Under Section 148 of the Companies Act, 2013 ("the Act") read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the Board of Directors on the recommendation of Audit Committee, have appointed M/s N. I. Mehta & Company as the Cost Auditors for the audit of the cost accounts relating to Textiles and Polyester Divisions. They will also submit a Compliance Report in respect of the Real Estate activities for the financial year 2014-15. T e remuneration payable to the Cost Auditor is required to be ratified by the shareholders at the AGM.

The Central Government had accorded its approval to the appointment of M/s. N. I. Mehta & Company, as the Cost Auditors for auditing the cost accounts relating to Textiles and Polyester for the Financial Year 2013-14. The Cost Audit Reports for Textiles and PSF Divisions for the Financial Year 2012-13 were submitted to the Central Government within the scheduled time period.

15. APPRECIATION:

The Directors express their appreciation to all employees of the various divisions for their diligence and contribution to performance. The Directors also record their appreciation for the support and co-operation received from franchisees, dealers, agents, suppliers, bankers and all other stakeholders. Last but not the least the Directors wish to thank all shareholders for their continued support.



On behalf of the Board of Directors



NUSLI N. WADIA

Chairman

Place: Mumbai

Date: 27th May, 2014.


Mar 31, 2013

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2013.

1. FINANCIAL RESULTS:

Rs. in crores

For the Year For the Year ended 31st ended 31st March, 2013 March, 2012

GROSS TURNOVER AND OTHER INCOME 2,502.12 2,402.63

Profit before Finance Costs and Depreciation and amortization 334.58 316.81 expenses

Finance Costs 174.74 180.57

Profit before Depreciation and 159.84 136.24 amortization expenses

Depreciation and amortization 62.03 61.39 expenses

PROFIT BEFORE TAX 97.81 74.85

Less: Tax (net) 22.11 15.50

PROFIT AFTER TAX 75.70 59.35

Add: Balance in Statement of 53.82 24.42 Profit and Loss of Previous Year

SURPLUS AVAILABLE FOR APPROPRIATIONS 129.52 83.77

Appropriations to:

Proposed Dividend 20.66 20.66

Dividend Distribution Tax 3.50 3.36

Transferred to General Reserve 7.57 5.93

Balance carried to Balance Sheet 97.79 53.82

Previous year figures have been regrouped where necessary.

2. COMPANY RESULTS AND DIVIDEND

The Company''s turnover for the year rose to Rs. 2,456 crores from Rs. 2,348 crores in the previous year, registering a growth of 5%. The revenue from Real Estate Division rose sharply from Rs. 566 crores in the previous year to Rs. 666 crores in the current year. The Textile Division registered a growth of 7% with a turnover of Rs. 462 crores as compared to Rs. 433 crores in the previous year. Polyester Staple Fibre (PSF) Division registered a turnover of Rs. 1,328 crores compared to Rs. 1,349 crores in the previous year.

The EBITDA for the year at Rs. 335 crores improved by 6% from Rs. 317 crores in the previous year. The Profit before Tax was Rs. 97.81 crores compared to Rs. 74.85 crores in the previous year. The Profit after Tax for the current year was Rs. 75.70 crores as against Rs. 59.35 crores in the previous year.

Your Directors recommend a dividend of Rs. 1/- per equity share ofRs. 2/- each for the year ended 31st March, 2013, to be paid, if declared by the members at the ensuing Annual General Meeting, as compared to dividend of Rs. 5/- per equity share of Rs. 10/- each paid in the previous year. The total dividend outgo for the year under review is Rs. 20.66 crores, the same as last year.

3. REAL ESTATE DIVISION:

The revenue from real estate activity was Rs. 666 crores as compared to Rs. 566 crores in the previous year. The operating profit for the year was Rs. 350 crores as against Rs. 269 crores in the previous year.

Bombay Realty (BR), the real estate division of the Company, has launched two high rise luxury residential towers viz. ''One ICC'' and ''Two ICC'' at Island City Center (ICC), which will have world class amenities and features.

A renowned Architect has been appointed as Lead Consultant for the project. Consultants for Structural Engineering, Mechanical, Electrical & Plumbing, Vertical transportation, Facade, LEED Gold certification etc. have also been appointed. The consultants would be supported by internal experts in these areas. The project will include energy efficient features and use of sustainable material which will ensure substantial operational cost savings in energy and water consumption leading to higher satisfaction levels of occupants as compared to conventional buildings.

During 2012, the Company was required to amend the building designs for ICC to meet the requirements of new Development Control Regulations. The modified building design has been prepared with a view to optimize the building efficiency.

MCGM has issued a Stop Work Order at Company''s Worli Textiles Mill site (WIC) pursuant to withdrawal of approval granted in 2004 for modification to the Textile Mill Modernisation scheme by the Textiles Department of Government of Maharashtra. This has been challenged by the Company in its Writ Petition before Hon''ble Bombay High Court.

Pursuant to the Order of Hon''ble Supreme Court dated 9th August, 2012 for handing over the share of land to MHADA and MCGM at the two mills respectively, the Company has submitted plans for consolidated hand over as per Integrated Development Scheme. Subsequently, as directed by MCGM, the Company has filed an application before Hon''ble Supreme Court for modification of its Order of 9th August, 2012 to enable hand over at single location.

The Directors believe that irrespective of the outcome of the case, the Company''s development plans are not likely to be affected.

The handover of land admeasuring over 66,000 square meters would be one of the largest handover of land in Mumbai. This will enable MHADA to provide housing to over 4,000 families. Besides, the Company would also be rehabilitating over 1,000 families currently residing on the site.

4. TEXTILE DIVISION:

The Textile turnover has increased from Rs. 433 crores in the previous year to Rs. 462 crores for the year ended on 31st March, 2013 i.e. a growth of 7% over previous year. Despite this the division suffered an operational loss of Rs. 12 crores in the current year compared to a profit of Rs. 5 crores in the previous year due to lower margin and adverse product mix.

Domestic business grew by 5% led by mix improvement. Exports turnover grew by 35% from Rs. 34 crores to Rs. 46 crores However, there was a severe pressure on the margins due to slowdown of growth both in domestic and international markets.

In order to provide thrust to domestic retail business, the Company has created a new Retail Division to drive growth in the domestic market.

5. POLYESTER DIVISION:

The Division achieved a turnover of Rs. 1,328 crores during the year as compared to Rs. 1,349 crores in the previous year. The demand and prices of PSF are to a significant extent linked to supply and prices of cotton. During the year, cotton prices continued to remain depressed, leading to lower realization for PSF. Further, it also led to a large number of spinners remaining away from PSF, thereby adversely impacting the volume. Increased capacity in the recycled PSF industry also adversely impacted the PSF business. The average capacity utilization of 81.5%, though lower than 84% achieved in the previous year was significantly better than industry capacity utilization of 71% during the year.

The margins of the PSF Division were adversely impacted due to a sharp increase in the raw material prices in the backdrop of escalating crude oil prices, continuing adverse impact of rupee depreciation and sharp increase in conversion cost due to increase in RLNG and power cost, during the year.

6. FIXED DEPOSITS:

During the year, all the matured fixed deposits were either renewed or repaid except those which were not claimed. The Company also accepted fresh deposits from public and shareholders. Total deposits outstanding as on 31st March, 2013 amounted to Rs. 131.80 crores out of which 122 deposits aggregating Rs. 0.70 crores had matured, but not been claimed.

7. SUB-DIVISION OF EQUITY SHARES:

In terms of the approval accorded by the shareholders through Postal Ballot, each equity share of the face value of Rs. 10/- each fully paid up was sub-divided into 5 equity shares of the face value of Rs. 2/- each fully paid up on and from 31st October, 2012.

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

Information pursuant to Section 217(1 )(e) of the Companies Act, 1956 ("the Act") read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure ''A'' to this Report.

9. EMPLOYEE STOCK OPTION SCHEME (ESOS):

Requisite disclosure in respect of the Employee Stock Option Scheme in terms of Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, has been provided in Annexure ''B'' to this Report.

10. INSURANCE:

All the properties including buildings, plant and machinery and stocks have been adequately insured.

11. DIRECTORS:

During 2012, Mr. R. N. Tata stepped down from the Board of various companies in pursuit of engaging in causes which were of personal interest to him. In line with this decision, he also tendered his resignation as Director of the Company vide his letter dated 22nd January, 2013.

The Directors place on record their appreciation of the invaluable contribution and guidance provided by Mr. R. N. Tata.

In accordance with the provisions of the Act and the Company''s Articles of Association, Mr. Keshub Mahindra, Mr. Ishaat Hussain and Mr. Ness N. Wadia retire by rotation and are eligible for re- appointment.

12. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Act, the Directors, based on the representations from the Operating Management, confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) they have, in selection of the accounting policies consulted the statutory Auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

13. CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement a Management Discussion and Analysis Report is given in Annexure ''C'' to this Report. A separate report on Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to this Report as Annexure ''D''.

14. PARTICULARS OF EMPLOYEES:

The Information required under Section 217(2A) of the Act read with the Rules framed thereunder forms part of this Report. However, as per provision of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to all shareholders excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Company''s Registered Office or Administrative Office.

15. AUDITORS:

Messrs. Kalyaniwalla & Mistry, Chartered Accountants, who are the Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. As required under the proviso to Section 224(1) of the Act, the Company has obtained written confirmation from Messrs. Kalyaniwalla & Mistry that their appointment, if made, would be in conformity with the limits specified in Section 224(1B) of the Act.

The Central Government accorded its approval to the appointment of Messrs. N. I. Mehta & Company, as the Cost Auditors for auditing the cost accounts relating to Textiles and Polyester for the Financial Year 2012-13. The Cost Audit Reports for Textiles and PSF Divisions were submitted to the Central Government well before the due date of filing the same.

16. APPRECIATION:

The Directors express their appreciation to all the employees at various divisions for their diligence and contribution. The Directors also record their appreciation for the support and co-operation received from the franchisees, dealers, agents, suppliers, bankers and all other stakeholders. Last but not the least the Directors wish to thank the shareholders for their continued support.

On behalf of the Board of Directors

NUSLI N.WADIA

Chairman

Place: Mumbai

Date: 28th May, 2013.


Mar 31, 2012

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2012.

1. FINANCIAL RESULTS:

(Rs.in crores)

For the Year ended For the Year ended

31st March, 2012 31st March, 2011

GROSS TURNOVER AND OTHER INCOME 2,285.36 1,911.46

Profit before Finance Costs and Depreciation and amortization expenses 316.81 267.61

Finance Costs 180.57 179.16

Profit before Depreciation and amortization expenses 136.24 88.45

Depreciation and amortization expenses 61.39 62.08

PROFIT BEFORE TAX 74.85 26.37

Less: Tax (net) 15.50 4.98

PROFIT AFTER TAX 59.35 21.39

Add: Balance in Statement of Profit and Loss of Previous Year 24.42 21.66

SURPLUS AVAILABLE FOR APPROPRIATIONS 83.77 43.05 Appropriations to:

Proposed Dividend 20.66 14.19

Dividend Distribution Tax 3.36 2.30

Transferred to General Reserve 5.93 2.14

Balance carried to Balance Sheet 53.82 24.42

Previous year figures have been regrouped where necessary.

2. COMPANY RESULTS AND DIVIDEND:

The Company''s turnover for the year rose to Rs 2,403 crores from Rs 2,014 crores in the previous year, registering a growth of 19.3%. The revenue from Real Estate Division rose sharply from Rs 240 crores in the previous year to Rs 575 crores in the current year. The Textile Division registered a growth of 10% with a turnover of Rs 439 crores as compared to Rs 399 crores in the previous year. Polyester Staple Fibre (PSF) Division registered a turnover of Rs 1,381crores compared to Rs 1,369 crores in the previous year.

The EBITDA for the year at Rs 317 crores improved by 18.3% from Rs 268 crores in the previous year. The interest cost at Rs 181 crores remained flat compared to Rs 179 crores, despite a significant increase in the interest rate environment through judicious fund management.

The Company earned Profit before Tax of Rs 74.85 crores compared to Rs 26.37 crores in the previous year. The Profit after Tax for the current year was Rs 59.35 crores as against Rs 21.39 crores in the previous year.

Your Directors recommend a dividend of Rs 5/- per share for the year ended 31st March, 2012, to be paid, if declared by the members at the ensuing Annual General Meeting, as compared to dividend of Rs 3.50 per share paid in the previous year.

3. REAL ESTATE DIVISION:

The revenue from real estate activity was Rs 575 crores as compared to Rs 240 crores in the previous year. The operating profit for the year was Rs 269 crores as against Rs 88 crores in the previous year.

During the year, the Company''s Realty Division was re-launched to operate under the name of ''Bombay Realty'' (BR). Bombay Realty will launch and execute new projects under this brand.

Bombay Realty launched the ''Island City Centre'' (ICC) in FY12 on the Company''s land at Spring Mills in Mumbai. During FY 2011-12, the Company launched two high-rise luxury residential towers (''One ICC ''and ''Two ICC'').

Further, the handing over of the apartments at the premium residential tower has been substantially completed. Besides, Bombay Realty has begun the construction of a high-end luxury retail space (''The Plaza'') at the 25-acre textile mills at Worli, as the ''Wadia International Center'' (WIC). The retail space will have leading luxury brands.

The Division Bench of the Bombay High Court has dismissed the Writ Petition filed by the Company for quashing and setting aside the stop work notices issued by the MCGM pursuant to the direction of the Monitoring Committee established under DCR58(9). The Stop Work notices were directed on the basis that the Company had not surrendered lands to MCGM and MHADA as per the provisions of DCR 58(1)(b) r/w Note (vii). Although the Bench dismissed the Writ Petition, it has continued the interim order passed till 31st July, 2012 to enable the Company to appeal. The Company proposes to challenge the same before the Supreme Court. The directors believe that irrespective of the outcome, the Company''s development plans are not likely to be affected.

4. TEXTILE DIVISION:

The overall turnover grew by 10% from Rs 399 crores to Rs 439 crores led by the domestic retail business while the average realization rose by 15% due to improved mix as also increase in prices. However, sales meter age dropped by 6% due to weaker consumer sentiments at retail level in the second half of the year. Exports turnover remained flat at Rs 38 crores, while the meter age declined by 29% due to sluggish market conditions in USA and Europe.

The Division has made a significant improvement at operating level in the current year by achieving an operating profit of Rs 9 crores as compared to operating loss of Rs 21 crores in the previous year. This was possible due to strengthening of product mix as well as improved realization.

5. POLYESTER DIVISION:

The division achieved a turnover of Rs 1,381 crores during the year as compared to Rs 1,369 crores in the previous year. There was a sharp fall in cotton prices compared to previous year which led to a large number of spinners switching away from PSF, thereby adversely impacting the volume. Overall market for PSF declined by 13%, while your Company''s volumes were lower by 11%. The Company achieved an average capacity utilization of 84% as compared to 94% in the previous year.

The margins were adversely impacted due to a sharp increase in the raw material prices in the backdrop of escalating crude oil prices, adverse impact of rupee depreciation and sharp increase in conversion cost due to over 100% increase in natural gas price, during the second half of the year. As a result, the division achieved breakeven compared to profit of Rs 150 crores in the previous year.

6. FIXED DEPOSITS:

During the year, your Company decided to offer renewal of fixed deposits which were raised in 2009. The Company also invited fresh fixed deposits from public and shareholders. Total deposits outstanding as on 31st March, 2012 amounted to Rs 102.72 crores out of which 684 deposits aggregating Rs 2.87 crores had matured, but not been claimed. These have been subsequently repaid or renewed, except 209 deposits of total value of Rs 0.83 crores.

7. PREFERENTIAL ISSUE OF WARRANTS TO PROMOTERS:

In accordance with the terms of warrants issued to the Promoters, 7,60,000 warrants were exercised in January 2012 and the Promoters were issued equal number of equity shares at a price of Rs 527.28 per share. The balance 12.67 lakh warrants lapsed due to non-exercise of the same.

8. WADIA BRAND EQUITY & BUSINESS PROMOTION AND SHARED SERVICES AGREEMENT:

The Wadia Group has several companies in diverse sectors like the airlines, food, textiles, chemicals etc. and employs various subject matter experts in areas such as Legal, Finance, Information Technology, Treasury, Taxation, Human Resources, Procurement, Risk Management etc. With a view to maximizing the efficiency and effectiveness of these specialized resources, a formal structure has been created under Nowrosjee Wadia & Sons Limited (NWS) to serve the common interests of all the Group Companies. The combined skills, knowledge and expertise of this structure will benefit all the Group Companies availing of this arrangement.

In order to formalize this structure of common services and avail of the standing of the Wadia Group Brand, the Board of your Company, during the year, approved an Agreement between NWS and your Company to enter into the ''WADIA Brand Equity & Business Promotion and Shared Services Scheme''.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 ("the Act,) read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure ''A'' to this Report.

10. INSURANCE:

All the properties including buildings, plant and machinery and stocks have been adequately insured.

11. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Mr. R. A. Shah, Mr. S. Ragothaman, Mr. S. M. Palia, and Ms. Vinita Bali retire by rotation and are eligible for re-appointment.

12. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors, based on the representations from the Operating Management, confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

(ii) they have, in selection of the accounting policies consulted the statutory Auditors and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

13. CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement a Management Discussion and Analysis Report is given in Annexure ''B'' to this Report. A separate report on Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to this Report as Annexure ''C''.

14. PARTICULARS OF EMPLOYEES:

The Information required under Section 217(2A) of the Act read with the Rules framed there under forms part of this Report. However, as per provision of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to all shareholders excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Company''s Registered Office or Administrative Office.

15. AUDITORS:

Messrs. Kalyaniwalla & Mistry, Chartered Accountants, who are the Statutory Auditors of the Company, hold office up to the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. As required under the proviso to Section 224(1) of the Act, the Company has obtained written confirmation from Messrs. Kalyaniwalla & Mistry that their appointment, if made, would be in conformity with the limits specified in Section 224(1B) of the Act.

The Central Government accorded its approval to the appointment of Messrs. N. I. Mehta & Company, as the Cost Auditors for auditing the cost accounts relating to Textiles and Polyester for the FY 2011-12. The Cost Audit Reports for Textiles and PSF Divisions were submitted to the Central Govt. well before the due date of filing the same.

16. APPRECIATION:

The Directors express their appreciation to all the employees at various divisions for their diligence and contribution. The Directors record their appreciation for the support and co-operation received from the franchisees, dealers, agents, suppliers, bankers and all other stakeholders. Last but not the least the Directors wish to thank the shareholders for their continued support.

On behalf of the Board of Directors

NUSLI N.WADIA

Chairman

Place: Mumbai

Date: 28th May, 2012


Mar 31, 2011

TO THE MEMBERS

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2011.

1. FINANCIAL RESULTS:

For the Year ended For the Year ended

31st March, 2011 31st March, 2010

Rupees in Crores Rupees in Crores

GROSS TURNOVER AND OTHER INCOME 2062.82 1732.04

Profit before Finance Costs, Depreciation and Voluntary Retirement Compensation 266.56 290.59

Finance Costs 178.11 207.46

Profit/(Loss) before Depreciation & Voluntary Retirement Compensation 88.45 83.13

Depreciation 62.08 59.54

Voluntary Retirement Compensation W/O - 1.40

PROFIT /(LOSS) BEFORE TAX 26.37 22.19

Less: Tax (net) 4.98 3.77

PROFIT/(LOSS) AFTER TAX 21.39 18.42

Add: Balance in Profit and Loss Account of Previous Year 21.66 16.34

SURPLUS AVAILABLE FOR APPROPRIATIONS 43.05 34.76

Appropriations to:

Dividend 14.19 9.66

Dividend Distribution Tax 2.30 1.60

General Reserve 2.14 1.84

Balance carried to Balance Sheet 24.42 21.66

2. COMPANY RESULTS AND DIVIDEND:

The Company''s turnover for the year rose to Rs. 2,063 crores from Rs.1,732 crores in the previous year, registering a growth of 19%. The Textile Division registered a growth of 36% with a turnover of Rs. 399 crores as compared to Rs. 294 crores in the previous year. Polyester Staple Fibre (PSF) Division registered a turnover of Rs.1,418 crores compared to Rs. 867 crores in the previous year, a growth of substantial 64%. The revenue from Real Estate Division, however, declined from Rs. 562 crores in the previous year to Rs. 240 crores in the current year.

The Company earned Profit Before Tax of Rs. 26.37 crores compared to Rs. 22.19 crores in the previous year. The Profit After Tax for the current year was Rs. 21.39 crores as against Rs. 18.42 crores in the previous year.

The financial performance of Textile Division has improved signifi cantly compared to the previous year, eventhough the Division is yet to become Profitable. The demand for textile products in domestic market improved signifi cantly despite a sharp rise in the cotton prices which had to be passed on to the consumer. The export market continued to be sluggish due to poor demand in USA and Europe. The PSF Division recorded signifi cant increase in top line, and registered a turnaround to Profit. The demand for PSF rose signifi cantly in the context of high cotton prices, consequent to which price realization improved signifi cantly. The Real Estate Division focused on completion of the commercial building at Worli and residential tower at Dadar. The Company also commenced sale in the proposed new residential towers at Dadar.

The fi nancing cost was brought down from Rs. 207 crores to Rs. 178 crores despite a sharp increase in the interest rates due to a signifi cant reduction in the borrowings on account of realization of sale proceeds of the commercial building as well as positive cash fl ow from the PSF business.

Your Directors recommend a dividend of Rs. 3.50 per share for the year ended 31st March, 2011, to be paid, if declared by the members at the ensuing Annual General Meeting, as compared to dividend of Rs. 2.50 per share paid in the previous year.

3. TEXTILE DIVISION:

The overall turnover grew by 36% from Rs. 294 crores to Rs.399 crores led by the domestic retail business, which reported a rise of over 47% in turnover. The average realization improved by 16% due to improved mix as also, price increases taken to offset the impact of sharp rise in raw material prices. The sales meterage grew by 17% on the strength of a wider design offering, introduction of new product range in the popular category and more aggressive institutional sales. Exports continued to be sluggish due to fl at markets in USA and Europe.

The operating loss came down from Rs. 38 crores in the previous year to Rs. 22 crores in the current year. The Company continues to focus on cost reduction measures and improve effi ciency to turnaround the business.

4. POLYESTER DIVISION:

Turnover for the year rose to Rs. 1,418 crores from Rs. 867 crores in the previous year – an increase of 64%. Sharp rise in the cotton prices particularly during second half of the current year, resulted in a signifi cantly increased demand for PSF, absorbing the excess capacity of the Industry. The price realization also improved signifi cantly supported by global trends. The Company achieved an average capacity utilization of 95% compared to 77% in the previous year. The gross realization per tonne improved substantially from Rs. 69,426/ton to Rs. 91,456/ton.

The Company focused on expanding its market share both, in domestic as well as international markets and managed better realization through a basket of speciality fi bre which offered better margins. Further, the conversion cost was brought down through improved effi ciency and higher capacity utilization. Consequently, the business delivered an operating Profit of Rs. 152 crores compared to an operating loss of Rs. 66 crores in the previous year.

5. REAL ESTATE DIVISION:

The revenue from Real Estate activity was Rs. 240 crores as compared to Rs. 562 crores in the previous year. The operating Profit for the year was Rs. 86 crores as against Rs. 349 crores in the previous year.

During the year, the Company has sold space in the proposed new residential towers to be constructed at Spring Mills (now renamed Island City Centre), Dadar.

The construction of commercial building at its Worli site was completed and the same was handed over to Axis Bank Ltd. for occupation during the year. We expect to hand over the apartments in the ''Springs'' shortly after receipt of necessary approvals.

The market for residential property has been adversely impacted during second half of the year, due to higher interest rates and delays in approvals at various stages faced by the industry in general. However, your Company is confident of a positive response to the proposed residential towers project due to the Company''s brand image as well as quality of development and construction.

6. FIXED DEPOSITS:

Your Company has discontinued acceptance of fixed deposits from June 2009. Deposits of Rs. 80.81 crores were outstanding as at 31st March, 2011. No deposits have matured as at 31st March, 2011.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 ("the Act") read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure ''A'' to this Report.

8. PREFERENTIAL ISSUE OF WARRANTS TO PROMOTERS:

The Shareholders of the Company had approved on 24th March 2010, through postal ballot, issue of 39,57,000 Warrants to the Promoter(s) / Promoter Group on a preferential basis in accordance with the applicable SEBI Regulations with an option to subscribe equivalent number of shares of Rs.10 each. Out of this, 19,30,000 Warrants were to be exercised before 31st March, 2011 and further 20,27,000 Warrants are to be exercised on or after 1st April, 2011 but not later than 18 months from the date of issue of the Warrants. Perman Project Supports Ltd. (PPSL), a Company in the Promoter Group, subscribed to the entire issue and made the initial payment of 25% of the issue price as required under the SEBI Regulations. PPSL exercised option of conversion of 19,30,000 Warrants into equity shares on 28th March, 2011 and paid Rs.76.40 crores towards the balance amount payable after adjusting the initial payment of 25% of the issue price paid in respect of the said Warrants. The Company has on 29th March, 2011 allotted to PPSL 19,30,000 equity shares of Rs. 10/- each at a premium of Rs. 517.83 per share on exercise of the equivalent number of Warrants.

9. INSURANCE:

All the properties including buildings, plant and machinery and stocks have been adequately insured.

10. DIRECTORS:

Dr. H. N. Sethna who was associated with the Company for over 25 years and had been a member of its Board since 1985, passed away on 5th September, 2010. During his long association with the Company, Dr. Sethna as a Director of the Company and also as a Member of the Audit Committee of the Board made valuable contribution to the deliberations of the Board and the Audit Committee. The Board has placed on record its deep sense of loss on the passing away of Dr. Sethna.

Mr. Ness N. Wadia stepped down as the Joint Managing Director of the Company effective from the close of business hours on 31st March, 2011. Mr. Ness N. Wadia had been with the Company for over 16 years and held various positions including as Deputy Managing Director and Joint Managing Director. In accordance with the Agreement, Mr. Ness N. Wadia, upon ceasing to be the Joint Managing Director of the Company, also ceased to be Director of the Company effective the same date.

The Board recorded its appreciation of the services rendered by Mr. Ness N. Wadia and the signifi cant contribution made by him during his tenure with the Company.

The Board appointed Mr. Ness N. Wadia as an additional Director w.e.f. 1st April, 2011, in accordance with the provisions of Section 260 of the Act and Article 117 of the Company''s Articles of Association. Mr. Ness N. Wadia holds office upto the date of the ensuing Annual General Meeting. Notice has been received by the Company from a member under Section 257 of the Act, proposing his appointment as a Director.

The Board of Directors appointed Mr. Jeh N. Wadia as Managing Director with effect from 1st April, 2011 in accordance with the provisions of Section 260 and 269 of the Act and Article 117 of the Company''s Articles of Association.

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association Mr. Nusli N. Wadia, Mr. R. N. Tata, Mr. A. K. Hirjee and Mr. S. S. Kelkar retire by rotation and are eligible for re-appointment.

11. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors, based on the representations from the Operating Management, confi rm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

(ii) they have, in selection of the accounting policies consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the fi nancial year and of the Profit of the Company for that period;

(iii) they have taken proper and suffi cient care, to the best of their knowledge and ability, for the 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

12. CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement a Management Discussion and Analysis Report is given in Annexure ''B'' to this Report. A separate report on Corporate Governance and a certifi cate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to this Report as Annexure ''C''.

13. PARTICULARS OF EMPLOYEES:

The Information required under Section 217(2A) of the Act read with the Rules framed thereunder forms part of this Report. However, as per provision of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to all shareholders excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Company''s Registered office or Administrative office.

14. AUDITORS:

Messrs. Kalyaniwalla & Mistry, Chartered Accountants, who are the Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. As required under the proviso to Section 224(1) of the Act, the Company has obtained written confi rmation from Messrs. Kalyaniwalla & Mistry that their appointment, if made, would be in conformity with the limits specifi ed in Section 224(1B) of the Act.

The Central Government vide its letters dated 28th May, 2010 and 31st January, 2011 respectively accorded its approval to the appointment of Messrs. N. I. Mehta & Company, as the Cost Auditors for auditing the cost accounts relating to Textiles and Polyester respectively for the financial year 2010-11. The due date for submission of the cost audit report for the financial year 2009-10 was 27th September, 2010 and the actual date of submission of the report was 23rd September, 2010.

15. APPRECIATION:

The Directors express their appreciation to all the employees at various divisions for their diligence and contribution. The Directors record their appreciation for the support and co- operation received from the franchisees, dealers, agents, suppliers, bankers and all other stakeholders. Last but not the least the Directors wish to thank the shareholders for their continued support.

On behalf of the Board of Directors

NUSLI N.WADIA

CHAIRMAN Mumbai, 24th May, 2011.


Mar 31, 2010

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2010.

1. FINANCIAL RESULTS:

For the Year ended For the Year ended 31st March, 2010 31st March, 2009 Rupees in Crores Rupees in Crores GROSS TURNOVER AND OTHER INCOME 1732.04 1417.77 Profit before Finance Costs, Depreciation and Voluntary Retirement Compensation 290.59 50.73 Finance Costs 207.46 186.54 Profif(Loss) before Depreciation & Voluntary Retirement Compensation 83.13 (135.81) Depreciation 59.54 55.73 Voluntary Retirement Compensation W/O 1.40 2.06 PROFIT /(LOSS) BEFORE TAX 22.19 (193.60) Less: Tax (net) 3.77 1.02 PROFIT/(LOSS) AFTER TAX 18.42 (194.62) Add: Balance in Profit and Loss Account of Previous Year 16.34 188.59 Debenture Redemption Reserve - 7.50 Transferred from General Reserve - 19.39 SURPLUS AVAILABLE FOR APPROPRIATIONS 34.76 20.86 Appropriations to: Dividend 9.66 3.86 Dividend Distribution Tax 1.60 0.66 General Reserve 1.84 - Balance carried to Balance Sheet 21.66 16.34

2. COMPANY RESULTS AND DIVIDEND:

The Companys turnover increased by over 22% to Rs. 1,732 crores during the current year as compared to Rs.1,418 crores in the previous year. The Textile division recorded decline in turnover from Rs. 334 crores last year to Rs. 294 crores in the current year. The PSF division recorded a turnover of Rs. 867 crores for the current year compared to Rs. 811 crores last year. The- revenue from the Real Estate division during the current year was Rs. 562 crores as compared to Rs. 273 crores last year. The profit after tax for the current year was Rs. 18.42 crores compared to a loss of Rs. 194.62 crores in the previous year.

The financial performance of the Company has improved compared to the last year. The demand for textile products remained stagnant in the domestic market. The export market declined due to low demand in USA and Europe. The performance of the PSF division was adversely impacted due to non availability of raw material and over-supply situation in the market.

The Real Estate Division showed marked improvement due to sale of residential units at a better realization per flat. The Division also sold the remaining space in the commercial building at Worli.

The Companys results were also impacted due to increase in finance costs arising from higher borrowings required for the operations.

Your Directors recommend a dividend of Rs. 2.50 per share for the year ended 31s1 March, 2010 to be paid, if declared by the members at the ensuing Annual General Meeting, as compared to dividend of Re. 1 per share in the previous year.

3. TEXTILE DIVISION:

The overall turnover declined by 12% from Rs. 334 crores to Rs. 294 crores, mainly on account of lower exports at Rs. 50

crores compared to Rs. 80 crores in the previous year. Domestic retail sales witnessed the effect of economic slow-down in the beginning of the year, but recovered during the later part of the year under review. Retail sales at Rs. 158 crores during the year were at the same level as last year.

The profitability of the Division suffered from the effects of falling exports, competition in the domestic market and sharp rise in raw material cost. Several steps have been initiated to improve the performance of the Division such as increased capacity utilization, reduction of factory cost through improved efficiency, lower wastages, reduction in selling & distribution expenses and administrative overheads etc. Inventory and receivables have been reduced considerably resulting in lower burden of interest on working capital.

The Division is striving to improve the sales volume by better marketing in domestic as well as exports market. The international and domestic demand has started looking up with the improved global economic environment.

4. POLYESTER DIVISION:

PSF industry in the country continued to face excess capacity. Despite the adverse conditions the Company could increase sales volume of PSF by 42% as compared to the previous year. The Company achieved average capacity utilization at 77% for the year which is comparable with the industry standards. In March quarter, the capacity utilization rose to 88%.

Division profitability suffered on account of low realization due to severe competition coupled with higher raw material prices. Although export markets expanded, the margins remained under pressure. Switch over from liquid fuel to Natural Gas in second half helped to reduce the energy cost.

The company is pursuing a strategy to increase capacity utilization, confine to focused profitable product range, reduce

cost in areas of operations including import of raw material on long term contract basis and expand the share in the domestic market to improve overall sales realization.

5. REAL ESTATE DIVISION:

The revenue from the Real Estate Division was Rs. 562 crores during the current year compared to Rs. 273 crores in the previous year. During the year the Company sold the remaining part of the commercial building under construction at Worli and also some flats in the building under construction at Spring Mills, Dadar. The Company has also leased out surplus space in the existing properties, income from which has started accruing from March quarter 2010.

The construction of the residential tower at Spring Mills and the commercial building at Textile Mills is nearing coinpletion. The demand for residential property has picked up and prices of the same have also witnessed a steady rise in the past few quarters. Your Company will be progressing the next phase of development with a view to leverage the market trends.

6. FIXED DEPOSITS:

Your Company has discontinued acceptance of fixed deposits from June 2009. Deposits of Rs. 81.14 crores were outstanding as at 31st March, 2010. No deposits have matured as at 31st March, 2010.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 ("the Act") read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure A to this -Report.

8. PREFERENTIAL ISSUE OF WARRANTS TO PROMOTERS:

The Board of Directors at its meeting held on 10,h February, 2010 approved the issue of 39,57,000 warrants with option to subscribe to equivalent number of equity shares of Rs. 10 each, subject to shareholders approval. The shareholders overwhelmingly approved the proposal for the issue of the warrants to the Promoters. The warrant will be converted into equity share at Rs. 527.83 per share as determined in accordance with the pricing formula given in terms of Chapter VII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. Allotment of warrants would be made on receipt of approvals from BSE and NSE under the listing agreements.

9. INSURANCE:

All the properties including buildings, plant and machinery and stocks have been adequately insured.

10. DIRECTORS:

Mr. P. V. Kuppuswamy retired as the Joint Managing Director of the Company effective 31st March, 2010. The Board appreciates the contribution made by Mr. P. V. Kuppuswamy during his tenure of 28 years with the Company, including 16 years as a Director.

The Board of Directors appointed Mr. Durgesh Mehta as an Additional Director designated as Joint Managing Director and Chief Financial Officer with effect from 1st April, 2010 in accordance with the provisions of Section 260 and 269 of the Act and Article 117 of the Companys Articles of Association. Mr. Mehta holds office up to the date of the ensuing Annual General Meeting. Notice has been received by the Company from a member under Section 257 of the Act, proposing his appointment as a Director.

In accordance with the provisions of the Act and the Companys Articles of Association, Mr. Keshub Mahindra, Mr. R. A. shah and Dr. H. N. Sethna retire by rotation and are eligible for re- appointment.

11. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Act, the Directors, based on the representations from the Operating Management, confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

(ii) they have, in selection of the accounting policies consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, forthe 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

12. CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement a Management Discussion and Analysis Report is given in Annexure B to this Report. A separate report on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to this Report as Annexure C.

13. PARTICULARS OF EMPLOYEES:

The Information required under Section 217(2A) of the Act read with the Rules framed thereunder forms part of this Report. However, as per provision of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to all shareholders excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Companys Registered Office.

14. AUDITORS:

Messrs. Kalyaniwalla & Mistry, Chartered Accountants, who are the Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. As required under the proviso to Section 224(1) of the Act, the Company has obtained written confirmation from Messrs. Kalyaniwalla & Mistry that their appointment, if made, would be in conformity with the limits specified in Section 224(1 B) of the Act.

As per the requirement of Central Government and pursuant to Section 233B of the Act, the Company carries out an audit of cost records relating to the textile division every year. Subject to the approval of the Central Government, the Company has appointed Messrs. N. I. Mehta & Co., Cost Accountants, as auditors to audit the cost accounts of the Textile division for the financial year 2010-11.

15. APPRECIATION:

The Directors express their appreciation to all the employees at various divisions for their diligence and contribution. The Directors record their appreciation for the support and co- operation received from the franchisees, dealers, agents, suppliers, bankers and all other stakeholders. Last but not the least the Directors wish to thank the shareholders for their continued support.

On behalf of the Board of Directors NUSLI N.WADIA CHAIRMAN

Mumbai, 24th May, 2010.


Mar 31, 2009

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2009.

1. FINANCIAL RESULTS:

For the year ended For the Year ended 31 st March, 2009 31st March, 2008 Rupees in Crores Rupees in Crores

GROSS TURNOVER AND OTHER INCOME 1417.77 1044.96

Profit before Gratuity provision, Finance Costs, Depreciation and Voluntary Retirement

Compensation 53.11 118.51

Contribution to Gratuity Fund 2.38 0.75

Finance Costs 186.54 73.40

Profit/(Loss) before Depreciation & Voluntary Retirement Compensation (135.81) 44.36

Depreciation 55.73 35.42

Voluntary Retirement Compensation W/O 2.06 1.39

Capitalisation of Voluntary Retirement Compensation W/O in Previous Year - (10.46) PROFIT/(LOSS) BEFORE TAX (193.60) 18.01

Less: Tax (net) 1.02 1.33

PROFIT/(LOSS) AFTER TAX (194.62) 16.68

Add: Balance in Profit and Loss Account of Previous Year 188.59 194.40

Debenture Redemption Reserve 7.50 2.50

Transferred from General Reserve 19.39 -

SURPLUS AVAILABLE FOR APPROPRIATIONS 20.86 213.58 Appropriations to:

Proposed Dividend 3.86 -

Final Dividend - 13.52

Corporate Dividend Tax 0.66 2.30

Debenture Redemption Reserve - 7.50

General Reserve - 1.67

Balance carried to Balance Sheet 16.34 188.59

(Note: The commercial production of Polyester Staple Fibre at Patalganga commenced from 1st October, 2007. Hence, the results for the current year are not comparable with the previous year).

2. COMPANY RESULTS AND DIVIDEND:

The Companys turnover increased to Rs. 1418 crores during the current year. The Textile Division has shown a marginal decline from Rs. 363 crores last year to Rs. 334 crores in the current year. The PSF Division recorded a turnover of Rs. 811 crores for the full year compared with Rs. 411 crores for October-March last year. The revenue of the Real Estate Division during the current year was Rs. 273 crores as compared to Rs. 240 crores in the previous year.

The financial performance of the Company was adversely impacted by the general economic slow down. The demand in respect of textile products was adversely impacted due to recessionary conditions especially during the second half of the year, both in domestic and international markets. The Textile Division also suffered a significant exchange loss in hedging its exports. The PSF Divisions results were adversely impacted due to high raw material prices during the first half of the year, as well as due to over supply situation in the market, resulting in significant under cutting of prices by major competitors. The Real Estate Division witnessed down fall in the prices, absence of buyers interest due to non availability of funds as well as weak sentiments.

The Companys results were further impacted by the sharp increase in finance costs arising from higher interest rates during most part of the year coupled with increase in borrowings for completion of the manufacturing facilities for the Textile as well as PSF businesses, as also for funding construction costs in the Real Estate Division.

Even though your Company incurred a net loss during the year, in order to maintain continuity, your Directors recommend a dividend of Re.1/- per share of Rs.10/- each for the year ended 31s March, 2009 out of accumulated profits of the past years, to be paid if declared by the members at the ensuing Annual General Meeting.

3. TEXTILE DIVISION:

The overall turnover declined by 8.7% from Rs. 363 crores to Rs. 334 crores. Export volumes were largely impacted by the slow down in the USA and pricing pressure arising from over supply in the market. In this scenario, your Company focused on retaining key customers at modest margin levels and explored other potential markets and customers.

Domestic sales reflected modest growth during the first half, but the momentum could not be maintained in the second half due to deferment of purchasing decisions by consumers in the wake of the general economic slow down.

Business profitability was impacted due to lower throughput, higher energy costs in the first half of the year as also lower realization.

The Company has taken steps to reduce its cost base, introduced a larger range of value for money products under the Blooms range and pursued newer customers in the export market.

4. POLYESTER DIVISION:

The PSF industry was faced with significant excess capacity, resulting in severe price erosion due to competition. Consequently it was not possible for the Company to profitably utilize its full capacity.

Business profitability was further impacted due to lower throughput, higher raw material as well as energy costs during the first half of the year and lower realization. Export markets remained extremely competitive and were also affected by economic down turn, especially in Europe.

The Company is pursuing a strategy to develop niche products with dedicated customers in order to have a stable and profitable portfolio. In addition there is a strong focus on reducing cost.

5. REAL ESTATE DIVISION:

The revenue from the Real Estate Division was Rs. 273 crores during the current year as compared to Rs.240 crores in the previous year. During the current year the Company sold a part of the commercial building under construction at the Worli site for a total consideration of Rs. 235.02 crores to its wholly owned subsidiary - a special purpose vehicle set up for this limited purpose with a view to its subsequent disposal in the near future.

The construction of a residential tower at Spring Mills was affected in the early part of the year due to delay in receiving municipal permits and is now slated for completion during the second half of this year. The Company has sold most of the apartments in this tower. However, in accordance with the accounting standards issued by the Institute of Chartered Accountants of India, the revenue from such sale is being recognized as per the progress of construction under percentage completion method of accounting. Construction of the commercial tower at Textile Mills, Worli is 30% complete. Both these buildings are expected to be ready for occupation during the current year.

The Company will progress with further development plans on both sites in line with market conditions which are already looking up in some of the segments of the realty sector.

6. TAXATION:

The Companys income-tax assessment for the assessment year 2005-06 has been completed. The department has raised a demand of Rs.0.13 crore. The Company is contesting the demand in appeal and expects to succeed. Consequently no further provision in the books of accounts is considered necessary. However, the same has been disclosed as a contingent liability.

7. FIXED DEPOSITS:

The Company resumed acceptance of fixed deposits from 16th February, 2009. Upto 31s1 March, 2009, the Company collected deposits aggregating Rs. 13.63 crores. There are no deposits matured or claimed and remaining unpaid as on 31s March, 2009.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 ("the Act") read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure A to this Report.

9. EMPLOYEE STOCK OPTION SCHEME, ISSUE OF CAPITAL AND PREFERENTIAL ISSUE OF WARRANTS:

No stock options which were granted in previous years under the Companys Employee Stock Option Scheme (ESOS) were outstanding for vesting or for exercise, at the beginning of the year under review. Further, no stock options were granted under the ESOS during the year under review.

The Share Capital of the Company has gone up marginally by Rs.18,400 as at 31 st March, 2009 consequent upon allotment of 1,840 equity shares based on the orders lifting the attachment on the corresponding tainted shares passed by the Special Court constituted under the Special Court (Trial of offences relating to transactions in Securities) Act, 1992, on exercise of the rights attached to first and second detachable warrants forming part of the Rights Issue made in 1993 but kept in abeyance pursuant to Section 206A of the Act.

During the previous year, the Company had allotted on a preferential basis to The Bombay Burmah Trading Corporation Ltd. ("BBTCL"), a company in the promoter group, 19,30,000 warrants carrying an option to apply for and be allotted in one or more tranches, one equity share of Rs.10/- each per warrant within 18 months from the date of the issue ("validity period") at an issue price of Rs.616 each as determined in accordance with the SEBI prescribed pricing formula as per the provisions of Chapter XIII of the SEBI (Disclosure and Investor Protection) Guidelines, 2000 (SEBI (DIP) Guidelines). The monies received from BBTCL in terms of SEBI guidelines equivalent to 10% of the price i.e. Rs.61.60 per warrant aggregating Rs. 11.89 crores on allotment of the warrants, were utilized for the object of the issue i.e. to augment the long term resources of the Company for meeting the fund requirements of existing and new businesses and for general corporate purposes. BBTCL did not exercise the option to subscribe to the equity shares of the Company, as attached to the warrants, within the validity period, whereupon the option expired and the amount aggregating Rs. 11.89 crores referred to hereinabove was forfeited in terms of the SEBI (DIP) Guidelines and conditions attached to the warrants.

10. INSURANCE:

All the properties including buildings, plant and machinery and stocks have been adequately insured.

11. DIRECTORS:

Mr. S. K. Gupta ceased to be a Director effective 5lh December, 2008.

The Board of Directors appointed Ms. Vinita Bali as an Additional Director with effect from 30th April, 2009 in accordance with the provisions of Section 260 of the Act and Article 117 of the Companys Articles of Association. Ms, Bali holds office up to the date of the ensuing Annual General Meeting. Notice has been received by the Company from a member under Section 257 of the Act, proposing her appointment as a Director.

The Board of Directors re-appointed Mr. P.V. Kuppuswamy and Mr. Ness N. Wadic as Joint Managing Directors for a period of 5 years with effect from 1st June, 2009, subject to the approval of the members.

In accordance with the provisions of the Act and the Companys Articles of Association, Mr. Nusli N. Wadia, Mr. S. Ragothaman and Mr. S. M. Palia retire by rotation and are eligible for re- appointment.

12. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Act, the Directors, based on the representations from the Operating Management, confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

(ii) they have, in selection of the accounting policies consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

13. CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement a Management Discussion and Analysis Report is given in Annexure B to this Report. A separate report on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to this Report as Annexure C 14. PARTICULARS OF EMPLOYEES:

The Information required under Section 217(2A) of the Act read with the Rules framed thereunder forms part of this Report.

However, as per provision of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to all shareholders excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Companys Registered Office.

15. AUDITORS:

Messrs Kalyaniwalla & Mistry, Chartered Accountants, who are the Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. As required under the proviso to Section 224(1) of the Act, the Company has obtained written confirmation from Messrs. Kalyaniwalla & Mistry that their appointment, if made, would be in conformity with the limits specified in Section 224(1 B) of the Act.

As per the requirement of Central Government and pursuant to Section 233B of the Act, the Company carries out an audit of cost records relating to the textile division every year. Subject to the approval of the Central Government, the Company has appointed Messrs N. I. Mehta & Co., Cost Accountants, as auditors to audit the cost accounts of the textile division for the financial year 2009-10.

16. APPRECIATION:

The Directors express their appreciation to all the employees at various divisions for their diligence and contribution. The Directors record their appreciation for the support and co- operation received from the franchisees, dealers, agents, suppliers, bankers and all other stakeholders. Last but not the least the Directors wish to thank the shareholders for their continued support.

On behalf of the Board of Directors NUSLI N. WADIA CHAIRMAN

Mumbai, 30th June, 2009.

Registered office

Neville House, J. N. Heredia Marg, Ballard Estate, Mumbai - 400 001.


Mar 31, 2008

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2008.

1. FINANCIAL RESULTS:

For the year ended For the Year ended 31st March,2008 31st March,2007 Rupees in Crores Rupees in Crores

GROSS TURNOVER AND OTHER INCOME 1013.95 536.15 Profit before Gratuity provision, Finance Costs, Depreciation and Voluntary Retirement Compensation 120.42 707.53 Contribution to Gratuity Fund 0.75 6.15 Finance Costs 75.31 31.70 Profit before Depreciation & Voluntary Retirement Compensation 44.36 69.72 Depreciation 35.42 17.45 Voluntary Retirement Compensation W/O 1.39 11.85 Capitalisation of Voluntary Retirement Compensation W/O in Previous Year (10.46) - PROFIT BEFORE TAX 18.01 40.41 Less: Tax (net) 1.33 4.43 PROFIT AFTER TAX 16.68 35.9.3 Add: Balance in Profit and Loss Account of Previous Year 194.40 187.15 Debenture Redemption Reserve 2.50 - SURPLUS AVAILABLE FOR APPROPRIATIONS 213.58 223.03

Appropriations to: Proposed Dividend Final Dividend 13.52 19.31 Corporate Dividend Tax 2.30 3.23 Debenture Redemption Reserve 7.50 2.50 General Reserve 1.67 3.59 Balance carried to Balance Sheet 188.59 194.40

2. COMPANY RESULTS AND DIVIDEND:

The Companys turnover has gone up from Rs.536 crores to Rs. 1014 crores during the current year. The turnover of the Textile Division has shown a marginal decline. The PSF Division, which commercially commissioned the plant on October 1, 2007 has recorded a turnover of Rs.411.32 crores during the six months period up to March 31, 2008. The revenue from the Real Estate Division has grown from Rs.124 crores last year to Rs.240 crores in the current year.

The financial performance of the two manufacturing divisions of the Company has been severely impacted by fierce price competition and an appreciating Rupee in the case of Textile business and high raw material prices and over-supply situation in the PSF business. This is reflected in Profit before Tax declining from Rs.40 crores to Rs.18 crores during the current year. While all efforts are being made to improve the margin in both the businesses, the impact is expected to be gradual, given the ground realities. The Real Estate Division will also require substantial infusion of funds, as construction activity picks up pace.

Your directors recommended a dividend of Rs. 3.50 per share of Rs. 10 each for the year ended 31st March, 2008, to be paid if declared by the members at the ensuing Annual General Meeting.

3. TEXTILE DIVISION

Overall sales turnover declined by 4.48% to Rs. 363 crores as against Rs.380 crores in the preceding year. However, sales of Rs.16 crores booked to capital account during trial runs at the Ranjangaon plant, and considering this there has been a marginal decline in the turnover. The financial performance of the Division has, however, been adversely affected with the year under review being major restructuring phase involving establishment of the new plant at Ranjangaon, relocation of part facilities from Worli and development of dedicated vendors for outsourcing of yarns, grey fabrics and job weaving.

Loss of production during the transition period and stabilization of processing plant at Ranjangaon coupled with unfavourable exchange rate and fierce price competition led to a steep fall in exports from Rs. 152 crores in the previous year to Rs 100 crores in the year under review. Domestic sales, however, maintained an upward trend recording a 12% increase with the sales through the Retail Distribution System (RDS) achieving a healthy growth of 24%.

Bombay Dyeing has won "Lycra Images Fashion Award" as the Most Admired Brand in the Home Fashion Category, for the third year in succession.

Partial commercial production of new state-of-the-art processing and sewing facilities has already commenced at Ranjangaon. Remaining balancing machines including coal-fired boilers and thermopacks are expected to be operational in the second quarter of 2008-09 followed by augmentation of wide-width printing capacity towards the last quarter.

As planned 14 new Company showrooms including the Concept Store at Worli were opened during the year under review in addition to upgradation and renovation of 12 franchise stores. The Division continues to upgrade and widen its bed-n-bath category by continually introducing new products straddling a wide price band.

The above initiatives in the manufacturing and marketing areas supported by strong supply chain will help the Division in re- capturing some of the export business lost during transition period as also achieving quantum growth in the domestic business in the years to come.

4. POLYESTER DIVISION

During the first half of the year, the balance facilities for use of PTA were erected even while the PSF Plant was being tested using DMT as feedstock. Following this, the Plant was shut down for tie-in of the PTA facilities. In September the Plant was re- started with PTA as feedstock.

The Plant went into commercial production from 1st October, 2007 after achievement of performance parameters in the PTA route. Since then the Plant capacity has been raised to over 80% of its rated capacity and various grades of PSF and Chips have been sold to the customers in India and abroad. The Plant performance and product acceptance in the market have been good.

The turnover of the Division for the 6-month period from October, 2007 was Rs.411 crores. The financial performance of the Division has, however, suffered owing to high prices of raw materials and fuels as also due to over-supply position particularly in the domestic market.

While options to enhance the value of the business in terms of better margins are being pursued vigorously, the improvement is expected to be only gradual at least for some time.

Since DMT has ceased to be a marketable product, DMT Plant has been disposed of on as is where is basis. Some of the facilities of the DMT Plant such as Substation, Effluent Treatment and such other utilities and offsites are, however, being retained to service the PSF Plant.

5. REAL ESTATE DIVISION

The construction of the Residential Tower at Spring Mills is 40% complete, and more than 80% of the apartments have been sold. Demand continues to be positive in a market that has slowed down during the course of the year. Construction work at Dadar and Worli is progressing, with emphasis on completion of the first two commercial and IT/ITES buildings in the year 2009-10.

Phase 1 of the development has been expanded to include larger commercial office and IT/ITES space at both the Dadar and Worli locations.

Inflationary impact on cement and steel prices, along with shortage of construction workers continues to be a problem for the Real Estate Industry. Larsen & Tubro, who have the overall responsibility for construction will focus on attempts at increasing the construction speed in line with the regulatory permissions from time to time.

6. TAXATION

The Income Tax Appellate Tribunal has passed an order for the assessment year 1989-90 and based on this the department has raised a demand of Rs.1.76 crores. The Company is contesting the demand in appeal before the High Court, Mumbai, and expects to succeed. Consequently no further provision in the books of accounts is considered necessary. However, the disputed demand has been disclosed as a contingent liability.

7. FIXED DEPOSITS

The Company had suspended acceptance of fresh deposits and renewal of existing deposits from 1st March, 1999. There are no outstanding deposits remaining unpaid as on 31st March, 2008.

8. PREFERENTIAL ISSUE OF WARRANTS

During the year under review the Company has issued on a preferential basis to a company in the Promoter Group 19,30,000 warrants in accordance with the Guidelines for Preferential Issues contained in Chapter XIII of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 (the SEBI Guidelines), with an option to apply for and be allotted an equivalent number of fully paid up equity shares of the Company. This option is exercisable any time within 18 months from the date of issue of the warrants. The issue price was determined at Rs. 616 per share in accordance with the pricing formula prescribed under the SEBI Guidelines. The issue was approved by the shareholders through postal ballot in accordance with Section 81(1 A) of the Companies Act, 1956 (the Act) read with Section 192A of the Act and the Rules made thereunder

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure A to this Report.

10. EMPLOYEE STOCK OPTION SCHEME

No stock options were granted under the Companys Employee Stock Option Scheme (ESOS) during the year under review. However, requisite disclosure in respect of the ESOS covering the options granted in the earlier years in terms of guideline 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Share Purchase Scheme) Guidelines 1999, has been provided in Annexure B to this Report.

The Share Capital of the Company has gone up marginally by Rs. 18,700 as at 31st March, 2008 and further by Rs. 15,800 as on the date of this Report consequent upon allotment of (i) 1,210 equity shares following the exercise of stock options granted under the ESOS and (ii) based on the orders lifting the attachment on the corresponding tainted shares passed by the Special Court constituted under the Special Court (Trial of offences relating to transactions in Securities) Act, 1992, 660 equity shares during the year under review and subsequently 1,580 equity shares on exercise of the rights attached to first and second detachable warrants forming part of the Rights Issue made in 1993 but kept in abeyance pursuant to Section 206A of the Companies Act, 1956.

11. PERSONNEL

Employees of the Textile Division were paid Bonus as per the provisions of the Bonus Act. An additional 4.17% ex-gratia payment was made to maintain harmonious industrial relations.

Ex-gratia payment to the employees of the PSF plant, covered by the Payment of Bonus Act, was made as a gesture of goodwill and for maintaining cordial industrial relations.

12. INSURANCE

All the properties including buildings, plant and machinery and stocks have been adequately insured.

13. DIRECTORS

The employment of Mr. M. K. Singh has been terminated and accordingly Mr. Singh will cease to be a Director of the Company with effect from 7th July, 2008.

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association Mr. A. K. Hirjee, Mr. R. N. Tata and Mr. S. S. Kelkar retire by rotation and are eligible for re-appointment.

14. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 (hereinafter referred to as "the Act"), your Directors, based on the representations from the Operating Management, confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

(ii) they have, in selection of the accounting policies consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

15. CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement a separate report on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to the Directors Report.

16. PARTICULARS OF EMPLOYEES

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, and forming part of the Directors Report for the year ended 31st March, 2008 has been provided in Annexure C to this Report.

17. AUDITORS

Messrs A. F. Ferguson & Co., Chartered Accountants, who are the Statutory Auditors of the Company, hold office, in accordance with the provisions of the Companies Act, 1956 (the Act), upto the conclusion of the forthcoming Annual General Meeting. They have communicated that [for the reasons indicated in the notice convening the Annual General Meeting (AGM)] they are not seeking re-appointment at the ensuing AGM. The Company has received a special notice from a Member of the Company in terms of the provisions of the Act, signifying the intention to propose the appointment of Messrs Kalyaniwalla & Mistry, Chartered Accountants, as the Statutory Auditors of the Company from the conclusion of the ensuing AGM until the conclusion of the next AGM. Messrs Kalyaniwalla & Mistry have also expressed their willingness to act as Auditors of the Company, if appointed, and have confirmed their eligibility. Members are requested to appoint Messrs Kalyaniwalla & Mistry as Auditors at remuneration to be fixed by the Board of Directors.

On behalf of the Board of Directors

NUSLI N.WADIA CHAIRMAN Mumbai, 30th June, 2008

Registered office Neville House, J. N. Heredia Marg, Ballard Estate, Mumbai 400 001


Mar 31, 2007

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2007.

FINANCIAL RESULTS:

For the year ended For the Year ended 31st March, 2007 31st March, 2006 Rupees in Crores Rupees in Crores

Gross turnover and other income 536.16 1143.64

Profit before Gratuity provision, Finance Costs, Depreciation and Voluntary Retirement Compensation 107.58 97.48

Contribution to Gratuity Fund 6.16 2.37 Finance Costs 31.70 17.61

Profit before Depreciation & Voluntary Retirement Compensation 69.72 77.50

Depreciation 17.46 16.90 Voluntary Retirement Compensation 11.85 1.38 Profit before tax 40.41 59.22 Less: Tax (net) 4.48 (2.12) Profit after tax 35.93 61.34

Add: Balance in Profit and Loss Account of Previous Year 187.15 137.71

Investment Allowance Reserve - - Debenture Redemption Reserve - 16.25 Surplus available for appropriations 223.08 2)5.30 Appropriations to: Proposed Dividend Final Dividend 19.31 19.30 Corporate Dividend Tax 3.28 2.77 Debenture Redemption Reserve 2.50 - General Reserve 3.59 6.14 Balance carried to Balance Sheet 194.40 187.15

COMPANY RESULTS AND DIVIDEND

The company's turnover has come down from Rs-1,144 crores to Rs.536 crores during the current year. The DMT plant of the company at Patalganga remained closed during a substantial part of the year to enable construction and tying in with polyester project being implemented at the same location and therefore registered negligible turnover. The turnover of Textile Division also declined by 5% on account of lower exports.

Profit Before Tax for the year is Rs.40 crores as compared to Rs.59 crores for the previous year. Standing charges and depreciation on the DMT plant have been debited to the Revenue account. The provision for Voluntary Retirement Compensation is higher by Rs.10 crores as compared to the previous year. Contribution to the Gratuity Fund is higher by Rs. 4 crores compared to the previous year. Finance costs have gone up in line with higher borrowings and the rise in interest rates in the second half of the current year. Consequently the profit for the current year is lower as compared to the previous year.

The Polyester Staple Fibre plant is currently undergoing trial runs and the textile processing facility at Ranjangaon is expected to commence trial production in the next 2 to 3 months.

The mixed use real estate development at both Dadar and Worli locations has started taking concrete shape. The proposed residential tower at Dadar has been well received by the market and majority of units have been pre-booked.

The directors recommended a dividend of Rs. 5 per share of Rs. 10 each for the year ended 31st March, 2007, to be paid if declared by the members at the Annual General Meeting to be held on 25th July, 2007.

TEXTILE DIVISION

The sales of the division for the year were lower at Rs.355 crores compared to Rs. 372 crores in the previous year on account of export business continuing to be impacted by over-supply and fierce price competition. 1921 workmen out of 1987 of the Company's Textile facility at Worli opted for VRS midway through the year causing some disruption in production. This, along with higher cost of inputs has affected the financial results of the division.

A new state-of-the-art processing unit along with in-house stitching facilities at Ranjangaon is expected to commence operations from September, 2007. A major part of the total capital expenditure of Rs. 206 crores approved for the project, had already been incurred/committed by 31st March, 2007. Arrangements have been made for dedicated spinning and weaving facilities to ensure uninterrupted supply of grey fabric to the process house. This will mitigate to a large extent the cost disadvantage suffered by the division at its current location in Mumbai.

Domestic retail sales continued to show upward trend and grew by 9% during the year. The entire bed and bath category was upgraded by successful launch of following premium collections

* Country Romance * Urban Living * Sabyasachi Signature Line * Embellished Terri-towels

Renewed focus on revamping of retail network and brand presence in large format stores has also helped establish a strong platform for quantum growth in the company's textile business in the year ahead.

Bombay Dyeing has once again been declared most admired brand of the year in the House Fashion category by `Lycra Images Fashion Awards'.

The division is also in the process of setting up a state-of-the-art design studio and show-room at Worli.

POLYESTER DIVISION

During the year, the execution of the Polyester Project was in full swing at the DMT Plant site at Patalganga and to enable the implementation of the Polyester Staple Fibre (PSF) Project the DMT plant remained shut during a major part of the current reporting period. In January, 2007, commissioning of PSF Plant in sections commenced and by 31" March, 2007, part of the PSF Plant was under operational testing.

By September, 2007, facilities will be available for use of PTA as an alternative feedstock in the PSF Plant. Given the current scenario with Petrochemical market, this would provide flexibility on cost effective basis to the Company's Polyester business.

Polyester intermediates market has recently been experiencing substantial volatility caused by swing in Crude Oil prices, mismatch between international Paraxylene supply and demand (arising from commissioning of new PTA Plants) and Rupee-Dollar Exchange movement. While this is expected to impact the Division's performance in the immediate future, steps are being taken to mitigate the adverse situation by instituting cost saving measures and also by diversifying into high value fibre business.

REAL ESTATE DIVISION

With the receipt of all the development permissions, the construction of the residential tower at Spring Mills, Dadar, has commenced, and more than 60% of the apartments have already been sold. The remaining will be sold through the current financial year. The construction of the residential tower will be completed within the next 15 to 18 months. Work has also commenced on Shopping Centre and Commercial Offices which are part of the initial development phase both at Dadar and Worli locations.

All these activities, comprising the first phase of development at the two locations, are expected to be progressively completed over the next three years.

Well landscaped gardens form an integral part of the developments at both Dadar & Worli sites and steps have been taken to ensure that the construction enhances the environment.

TAXATION

The assessment of the Company for the assessment year 2004-05 has now been completed. The department has raised a demand of Rs.0.18 crore. The Company is contesting the demand in appeal and expects to succeed. Consequently no further provision in the books of accounts Is considered necessary. However, disputed demand has been disclosed as a contingent liability.

FIXED DEPOSITS

The Company had suspended acceptance of fresh deposits and renewal of existing deposits from 1st March 1999. Despite reminders, cheques sent by the Company in repayment of deposits have not been encashed and consequently deposits from 18 depositors aggregating to Rs. 1.21 lacs have remained unpaid as on 31st March, 2007.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure A to this Report.

EMPLOYEE STOCK OPTION SCHEME

Requisite disclosure in respect of the Employee Stock Option Scheme in terms of guideline 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Share Purchase Scheme) Guidelines 1999, has been provided in Annexure B to this Report.

The Share Capital of the Company has gone up marginally from Rs.38.60 crores as at 31st March, 2006 to Rs.38.61 crores as at 31st March, 2007 consequent upon allotment in 2006 of equity shares following the exercise of stock options granted under the Company's Employee Stock Option Scheme.

PERSONNEL

Employees of the Textile Division were paid Bonus as per the provisions of the Bonus Act. An additional 4.17% ex-gratia payment was made to maintain harmonious industrial relations.

Ex-gratia payment to the employees of the DMT plant, covered by the Payment of Bonus Act, was made as a gesture of goodwill and for maintaining cordial industrial relations.

INSURANCE

All the properties including buildings, plant and machinery and stocks have been adequately insured.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association Mr. Nusli N. Wadia, Mr. Keshub Mahindra, Mr. R. A. Shah and Dr. H. N. Sethna retire by rotation and are eligible for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956 (hereinafter referred to as "the Act"), your Directors, based on the representations from the Operating Management, confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

(ii) they have, in selection of the accounting policies consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement a separate report on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to the Directors' Report.

PARTICULARS OF EMPLOYEES

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, and forming part of the Directors' Report for the year ended 31st March 2007 has been provided in •. Annexure C to this Report.

AUDITORS

Members are requested to appoint Messrs. A. F. Ferguson & Co. as Auditors at a remuneration to be fixed by the Board of Directors.

On behalf of the Board of Directors

NUSLI N. WADIA CHAIRMAN

Mumbai, 24th May, 2007

Registered office Neville House, J. N. Heredia Marg, Ballard Estate, Mumbai 400 001

ANNEXURE `A' TO THE DIRECTORS'REPORT

Information under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Report for the year ended 31st March, 2007.

A. CONSERVATION OF ENERGY :

(a) Energy Conservation Measures taken

Some of the measures your Company had undertaken/continued to implement during the year under report in the high priority area of energy conservation are given below:

Textile operations

- Replacement of 5 ft. tube lights with 4 ft. tube lights.

- Optimum working of humidification fans and pumps in line with outside ambient condition.

- Optimising usage of electrical equipments like lights fans air-conditioners and switching them off when not in use.

- Maintaining strict control on air leakages and optimising the working of air compressors.

- Reduction in maximum demand by regulating the sequence of machine start up.

- Improvement in power factor :

- Optimising the size and load of electric motors and electric pre-heaters.

- Optimising the running of machines to save on oil.

- Closely monitoring the steam leakages.

- Avoiding over drying of cloth.

- Increasing the speed of stenters.

DMT/PSF operations

- During the period, DMT Plant was shut down to install a downstream PSF Plant. Hence, there were no operational energy saving measures other than keeping Project and non-operational use of energy to the minimum.

- The PSF Plant design has ensured that a most energy optimum technology is chosen compared to designs of the past.

- In view of the DMT Plant shutdown, there is no specific energy consumption that could be quantified.

(b) Additional Investments and proposals, If any, being Implemented for reduction of consumption of energy.

Nil

(c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent Impact on the cost of production of goods.

There was a saving of Rs.9.03 lacs in energy cost in Textile Mill, Rs. 25.08 lacs at NBW and Rs. 62.96 lacs on account of furnace oil at NBW calculated on the basis of productivity improvement.

(d) Total Energy Consumption and Energy Consumption per unit of production In prescribed Form A.

As per `Form A' attached.

B. TECHNOLOGY ABSORPTION :

Research and Development (R&D)

1. Specific areas in which R& D carried out by the Company

- Process optimisation/Recipe modification in size mixing/introduction of new size mixing, dyes and chemicals for `cost economy' :

(i) By using left-over size liquor from previous batch;

(ii) By strict supervision and control; and

(iii) By taking controlled studies on sizing machines and closely monitoring the sized beam performance on loom.

- New Product Development such as Nylon wrapper by way of import substitution.

- Enhancement of wrapper production through installation of batchers and conversion of normal dobby looms to reinforced looms.

- Increase in batching capacity.

- Process standardization for consistent quality.

- New process development.

2. Benefits derived as a result of the above R&D

- Saving in size mixing recipe of Rs. 0.96 lac.

- Improvement in product marketability and business viability through consistent quality, lower cost and newer products.

- Meeting customer needs and in turn increased customer satisfaction.

3. Future plan of action

- To reduce production cost by stringent process parameters and new development of vendors.

- To develop value added special finishes on sheeting qualities for improvement in business vialibility.

- To reduce process cost by optimization of processes, reduction of chemical/auxiliaries and utilities cost without adversely affecting the quality of fabric.

4. Expenditure on R &D

Expenditure on R & D during the year under report amounted to Rs. 62.49 Lacs.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION,

1. Efforts In brief, made towards technology absorption, adaptation and Innovation

- Process optimization for dyeing of reactive shades, improvement in pilling, reduction in skewing and bowing, better luster and consistent residual shrinkage.

- Improvement in blotched printing and binder for cost reduction.

- Process development for enhanced wrinkle free finish.

2. Benefits derived as a result of the above efforts :

- Cost reduction due to process/recipe modification in various operations.

- Quality consistency due to standardisation of processes.

- Newer finishes/products.

3. Information regarding technology imported during the last 5 years:

(a) Technology imported - Invista Performance Technologies,

U.S.A.- For manufacture of polyester staple fibre with DMT & MEG as raw materials.

(b) Year of import - 2006.

(c) Has technology been fully absorbed - It is in the process of absorption, as the commissioning has started in January, 2007.

(d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action - The technology will be fully absorbed during 2007-08.

4. Foreign Exchange Earnings And Outgo :

1. Activities relating to exports, initiatives taken to Increase exports, development of export markets for products and services and export plans.

The International markets are in an oversupply position and with intense competition from both within and other countries, both the volume and margins are being adversely affected. The strengthening of the rupee is further eroding the competitiveness in the export business. However addition in terms of new markets, new product lines and finishes are expected to yield some gains.

2. Total foreign exchange used and earned.

Rs. in Crores

Total foreign exchange used 138.38 Total foreign exchange earnings 151.00

On behalf of the Board of Directors

NUSLI N. WADIA Chairman

Mumbai, 24th May, 2007


Mar 31, 2006

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2006.

FINANCIAL RESULTS:

Far the year ended For the Year ended 31st Match, 2006 31st March, 2005 Rupees in Crores Rupees in Crores

GROSS TURNOVER AND OTHER INCOME 1143.64 1172.41

Profit before Finance Costs, Depreciation & Voluntary Retirement Compensation 95.11 67.50

Finance Costs 17.61 14.44

Profit before Depreciation & Voluntary Retirement Compensation 77.50 53.06 Depreciation 16.90 19.38 Voluntary Retirement Compensation 1.38 - PROFIT BEFORE TAX 59.22 33.68 Less: Tax (net) (2.12) 7.12 PROFIT AFTER TAX 61.34 26.56

Add: Balance in Profit and Loss Account of Previous Year 137.71 119.00

Investment Allowance Reserve - 11.00 Debenture Redemption Reserve 16.25 2.50 SURPLUS AVAILABLE FOR APPROPRIATIONS 215.30 159.06 Appropriations to: Proposed Dividend Final Dividend 19.30 15.43 Corporate Dividend Tax 2.71 2.16 Debenture Redemption Reserve - - General Reserve 6.14 3.76 Balance carried to Balance Sheet 187.15 137.71

COMPANY RESULTS AND DIVIDEND:

The Company's profits grew by 131% as compared to last year. The increase in the profit is mainly in the Real Estate division. The earnings of the Textile and DMT divisions have on the other hand shown a decline. Falling export volume resulting from fierce international competition consequent upon abolition of quotas and rise in price of finer varieties of cotton have had an adverse impact on the results of the Textile division. The division has chalked out ambitious plans to refurbish the existing retail network and establish new format stores including shop-in-shops in select malls. A state-of-the-art greenfield processing unit is also being established at Ranjangaon near Pune to improve export competitiveness. This is expected to involve an investment of Rs. 189 crores.

The financial performance of the DMT Division suffered a setback on account of unprecedented increase in the international price of oil, lowering of import duties and unfavourable price differential between the prices of DMT and Paraxylene, its major raw material. The implementation of the Rs. 400 crore Polyester Staple Fibre (PSF) Project has progressed substantially and trial production is expected to commence in the third quarter of the current financial year. DMT plant operations have been temporarily suspended effective 6th March, 2006 for tying in the PSF Project being implemented at the same location.

The Supreme Court by its judgement on 7th March, 2006 has clarified the regulatory basis of the development of cotton textile mill lands. Accordingly the Company's Spring Mill land development at Dadar has commenced. Besides a residential segment the first phase of the Spring Mills Project also includes a Town/Shopping Centre development serving Central Mumbai and its residents. The development of Textile Mills at Worli has also commenced in phases in line with the modernization of the textile activity on the property. The Mumbai real estate market is buoyant and the demand for large sized residential units has increased.

The Directors recommend a dividend of Rs. 5/- per share of Rs.10/- each for the year ended 31st March, 2006, to be paid, if declared by the members at the Annual General Meeting to be held on 27th July 2006.

TEXTILE DIVISION

Decline in export volume owing to intense price competition in the post-quota period led to a 7% drop in sales turnover of the Division to Rs.368 crores against Rs.393 crores of the preceding year. This along with increase in input costs impacted profit margins. Contrary to expectations, cotton prices of finer varieties continue to rule high.

Domestic over-the-counter sales however recorded a 14% jump riding on the success of new product launches and supporting advertising and marketing campaigns. Selection of "Ebony & Ivory" bed and bath marketing campaign from amongst 121 entries across all lifestyle and retail brands with special mention from the IFF jury during "Images Fashion Award Forum 2006", is a testimony to Company's efforts in this direction.

In addition to continuing its focus on new product introductions, the Division has chalked out ambitious plans to refurbish existing retail net-work and establish new format stores including shop-in-shops in select malls, to provide world class shopping experience to its customers.

The following awards were conferred on the Division during the year under review:

"Best Brand in the Home Fashion Category" - by Images Fashion Forum (IFF) 2006.

"Home and Lifestyle retailer of the year 2005" - instituted by ICICI Bank and KSA Technopak.

To garner greater share of world markets through competitiveness a state-of-the-art greenfield processing unit is being established at Ranjangaon near Pune which will also house some of the critical equipments to be relocated from Mumbai unit for overall consolidation and ease of control. This facility is expected to be operative from the first quarter of the next financial year. Out of a total capex of Rs. 189 crores approved for the purpose, capital expenditure to the extent of Rs. 86 crores has already been committed. Simultaneous down-sizing of existing facilities at Mumbai is also being planned through the voluntary retirement scheme.

In the meantime, the Company is actively engaged in revamping its product design and development activities along with product rationalisation and speedier migration to higher value added made-ups.

DMT/PSF DIVISION:

The production and sale of DMT during the year were lower at 1,41.343 tonnes and 1.43,023 tonnes respectively, compared to the previous year. The turnover was Rs.630 crores compared to Rs.745 crores for the previous year. Production was adversely affected due to the collapse of 220 KV HT transmission towers supplying power to the DMT Plant, during the unprecedented rains on 26[n July, 2005. The Plant was restarted on 10th August, 2005, on alternative 22 KV grid supply while the 220 KV power was restored only on 21st September, 2005. DMT Plant operations have been suspended from 6th March, 2006 to enable implementation of the Polyester Staple Fibre (PSF) Project located at the same site. This was necessary as, by then, the plant site had received major part of the project equipment and substantial manpower was mobilized for expeditious completion of the PSF project.

A steep fall in the international prices of Paraxylene and DMT in April 2005 resulted in a substantial write-down of inventories both in pipeline and in stock, severely affecting the financial performance of the Division. A reduction of import duty in March 2005 from 20% to 15% (since further reduced to 10% in March 2006) unfavourable price differential between DMT and Paraxylene, its major raw material, as well as production losses during July-September 2005 further aggravated the situation. However, with the commencement of PSF production expected in the third quarter of the current financial year, the results of the Division are expected to show improvement.

DMT Division continued to excel in various Total Quality Initiatives and received the prestigious "Sword of Honour" from the British Safety Council during the year.

REAL ESTATE DIVISION

The Division has commenced the development of the two properties - Spring Mills, Dadar, and Textile Mills, Worli.

The Spring Mills development, planned in phases, consisting of residential, commercial, school segments, etc., was delayed due to the Public Interest Litigation (PIL) filed in February 2005. The PIL had challenged the 2001 amendment to the Development Control Regulation 58, which sets out the framework of the orderly development of land owned by Cotton Textile Mills. Aggrieved by the judgment of the Bombay High Court the Company approached the Supreme Court for relief. In Match 2006, the Supreme Court upheld the law and confirmed that the amended Development Control Regulation 58 does not violate any environmental laws. Construction on Spring Mill !and has commenced. Besides a residential segment the first phase of the Spring Mills Project also includes a Town/Shopping Centre development serving Central Mumbai and its residents.

The development of Textile Mills. Worli has commenced in phases, in line with the modernisation of the textile activity on the property.

TAXATION

The assessment of the Company for the assessment year 2003-2004 has now been completed. The department has raised a demand of Rs.3.53 crores. The Company is contesting the Demand in appeal and expects to succeed. Consequently no further provision in the books of accounts is considered necessary. However, the disputed demand has been disclosed as a contingent liability.

FIXED DEPOSITS

The Company has suspended acceptance of fresh deposits and renewal of existing deposits from 1st March, 1999. During the year under review the Company has repaid Rs.0.11 lac to two depositors. Deposits from 20 depositors aggregating to Rs.1.05 lacs were due and payable and despite reminders remained unclaimed for a period of 7 years. This amount has. therefore, been transferred to Government of India administered Investor Education and Protection Fund.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure `A' to this Report.

EMPLOYEE STOCK OPTION SCHEME

Requisite disclosure in respect of the Employee Stock Option Scheme in terms of guideline 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Share Purchase Scheme) Guidelines, 1999, has been provided in Annexure `B' to this Report.

The Share Capital of the Company has gone up from Rs.38.58 crores as at 31st March, 2005 to Rs.38.61 crores as at 31st March, 2006 consequent upon allotment in 2005 of equity shares following the exercise of stock options granted under the Company's Employee Stock Option Scheme.

PERSONNEL

Employees of the Textile Division were paid Bonus as per the provisions of the Bonus Act. An additional 4.17% Ex-gratia payment was made to maintain harmonious industrial relations.

Ex-gratia payment to the employees of the DMT plant, covered by the Payment of Bonus Act, was made as a gesture of goodwill and for maintaining cordial industrial relations.

INSURANCE

All the properties including buildings, plant and machinery and stocks have been adequately insured.

DIRECTORS

Mr. S. M. Palia and Mr. S. K. Gupta who were appointed as Additional Directors on 30th May, 2006 hold office up to the date of the forthcoming Annual General Meeting under Section 260 of the Companies Act, 1956 and Article 117 of the Articles of Association. Notices have been received by the Company from a member under Section 257 of the Companies Act proposing their appointments as Directors. Mr. S. K. Gupta was also appointed as a Whole-time Director designated as Executive Director for a period of 5 years with effect from 30th May, 2006.

Mr. Ness N. Wadia has been redesignated as Joint Managing Director of the Company effective 30th May, 2006.

During the year under report, Mr. Ninu Khanna resigned as Managing Director and consequently as a Director of the Company and his resignation takes effect from the close of business on 31st May, 2006.

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association Mr. R. N. Tata, Mr. S. S. Kelkar and Mr. S. Ragothaman retire by rotation and are eligible for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 217{2AA) of the Companies Act, 1956 (hereinafter referred to as "the Act"), your Directors, based on the representations from the Operating Management, confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

(ii) they have, in selection of the accounting policies consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement a separate report on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to the Directors' Report.

PARTICULARS OF EMPLOYEES

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, and forming part of the Directors' Report for the year ended 31st March, 2006 has been provided in Annexure `C' to this Report.

AUDITORS

Members are requested to appoint Messrs. A. F. Ferguson & Co. as Auditors at a remuneration to be fixed by the Board of Directors.

On behalf of the Board of Directors NUSLI N.WADIA CHAIRMAN

Mumbai, 30th May, 2006

Registered office Neville House, J. N. Heredia Marg, Ballard Estate, Mumbai 400 001

ANNEXURE `A' TO THE DIRECTORS' REPORT

Information under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Report for the year ended 31st March, 2006.

TECHNOLOGY ABSORPTION :

Research and Development (R&D)

1. Specific areas in which R& D carried out by the Company

- Process optimisation/Recipe modification in size mixing/introduction of new size mixing, dyes and chemicals for `cost economy'.

- Process standardization for consistent quality.

- Process Development.

- Product Development.

2. Benefits derived as a result of the above R&D

- Saving in size mixing recipe of Rs. 1.56 lacs p.a.

- Improvement in product marketability and business viability.

- Meeting customer needs and in turn increased customer satisfaction.

3. Future plan of action

- To reduce size cost by stringent process parameters and new development of vendors/recipes.

- To eliminate rejection due to failure in process parameters by modifying the process or recipe.

- To reduce the production cost by developing alternate recipe to improve the business.

4. Expenditure on R & D

Expenditure on R & D during the year under report amounted to Rs. 0.45 crore.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology absorption, adaptation and innovation

- Installation of small cooling towers for control room air conditioners for operation during shut down of the DMT plant.

- Reduction in Paraxylene specific consumption achieved in January and February, 2006 by (i) caustic cleaning of oxidizer, (ii) replacement of top bed of Paraxylene Still to minimize slip of Paraxylene from column bottoms and (iii) modification of Oxidate Stripper level Chamber to improve its performance.

- Implementation of energy conservation projects including provision of voltage optimizing system for lighting transformer, upgradation of two 40 watt luminaries with new reflectors.

- Introduction of a new process `bio-polishing' to improve `pilling' and overall performance of fabric.

- Introduction of `wet on wet' finishing process for increased production and cost reduction.

- Development of a new `insect repellant' finish for domestic market.

- Introduction of a process by open width route for cotton-polyester sheeting qualities to overcome problems of low gsm and tensile strength.

- Usage of economical pigment dyes in place of costlier vat dyes for dyeing for printed sheeting qualities.

- Introduction of a new auxiliary for washing of deep dyed red shades to overcome problems of unsatisfactory wash fastness.

- Introduction of a new aqueous printing system from BASF for printing 'black on white' designs for sheetings to achieve satisfactory fastness.

- Optimization of machine parameters of production machine to improve performance of fabric.

- Production of towels with more durable fragrance.

- Improvement in the quality of stamping for interlining by developing tracing with the help of in-house CAD system.

- Introduction of a new computerized Dot Roll on interlining machine for improving overall performance of the HOPE Microdot interlining fabric.

2. Benefits derived as a result of the above efforts :

- Cost reduction and faster fabric delivery due to process modification and optimization.

- Cost reduction due to improved packing performance. - Quality consistency due to standardisation of processes. - Cost saving of over Rs. 45 lacs in DMT Plant.

3. Information regarding technology imported during the last 5 years:

(a) Technology imported. - (b) Year of import. - (c) Has technology been fully absorbed. - (d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action. -

4. FOREIGN EXCHANGE EARNINGS AND OUTGO :

1. Activities relating to exports, initiatives taken to increase exports, development of export markets for products and services and export plans.

During the year selling prices have come under tremendous pressure resulting in reduced margins. However, quota removal has thrown open a lot of volume growth opportunities for the Company's business. To encash these opportunities, huge capacities are currently being built in the subcontinent. The Company's new state-of-the-art plant near Pune will provide a competitive edge to the Company.

2. Total foreign exchange used and earned. Rs in Crores.

Total foreign exchange used 111.09 Total foreign exchange earnings 269.63

It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs.584.79 crores.

On behalf of the Board of Directors NUSLI N. WADIA Chairman

Mumbai, 30th May, 2006


Mar 31, 2005

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2005.

FINANCIAL RESULTS:

For the year ended For the Year ended 31st March, 2005 31st March, 2004 Rupees in Crores Rupees in Crores

GROSS TURNOVER AND OTHER INCOME 1172.41 1072.51 Profit before Finance Costs, Depreciation & Voluntary Retirement Compensation 67.50 117.38 Finance Costs 14.44 10.39 Profit before Depreciation & Voluntary Retirement Compensation 53.06 106.99 Depreciation 19.38 34.43 Voluntary Retirement Compensation - - PROFIT BEFORE TAX 33.68 72.56 Less: Tax (net) 7.12 19.06 PROFIT AFTER TAX 26.56 53.50 Add: Balance in Profit and Loss Account of Previous Year 119.00 106.97 Investment Allowance Reserve 11.00 - Debenture Redemption Reserve 2.50 - SURPLUS AVAILABLE FOR APPROPRIATIONS 159.06 160.47 Appropriations to: Proposed Dividend Final Dividend 15.43 15.41 Corporate Dividend Tax 2.16 1.97 Debenture Redemption Reserve - 18.74 General Reserve 3.76 5.35 Balance carried to Balance Sheet 137.71 119.00

COMPANY RESULTS AND DIVIDEND:

The net profit for the year was Rs.26.56 crores as compared to Rs. 53.50 crores last year. The drop in profit has been caused by severe pressure on the margins of both the operating divisions i.e. Textile and DMT as also a drop in the other income consequent upon general increase in interest rates impacting security prices. Higher cotton prices and reduction in the DEPB rates have adversely impacted the profitability of the Textile Division. Although the DMT business recorded an increase in production and sales volumes, volatility in raw material costs and sharp drop in DMT prices resulted in lower profitability for the division, in the fourth quarter of the year.

The Textile Division has continued to focus on elimination of non-value added businesses, product mix upgradation and on cost reduction and control. The future financial performance of the division is expected to be better with the abolition of export quotas and the productivity improvements/cost savings flowing from the restructuring of its manufacturing base.

The DMT business has recorded an increase of 24% in turnover due to better price realizations in the earlier part of the year. The price margins, however, have been under severe pressure from the fourth quarter of the year under review mainly due to very high international oil prices. The division is going ahead with a downstream project for manufacture of polyester staple fibre to take advantage of market opportunities. The project is expected to be completed in the third quarter of 2006.

The Real Estate development activity on the Company's Spring Mills land, for which the requisite clearances from the State Government have been received, will commence shortly.

The Mumbai real estate market is enjoying favourable conditions and this augurs well for the performance of the Real Estate Division.

Having regard to the above, your Directors recommend a dividend of Rs.4/- per share of Rs.10/- each for the year ended 31st March, 2005 to be paid, if declared by the members at the Annual General Meeting to be held on 29th July, 2005.

TEXTILE DIVISION:

The Textile Division recorded a sales turnover of Rs.400 crores for the year under review, only marginally lower than the previous financial year. However, the profit margins of the division continued to be under considerable pressure. In anticipation of quotas being dismantled from January 2005, merchant exporters rushed to liquidate their stocks impacting the export prices. The Duty Entitlement Passbook Scheme (DEPB) rates were reduced by over 50% by the Government in two stages during the year under review further reducing export realization. Cotton prices also continued to rule high during the best part of the year.

Despite these setbacks, the division continues its focus on rationalisation of the product portfolio and migration to value added made-ups. As far as the domestic market for textile is concerned, the division was able to leverage its successful advertising campaigns to derive a positive growth in sales volumes and margins. Domestic bed and bath off take has increased substantially as compared to previous year.

The domestic cotton crop for season 2005 was higher by 30% as compared to the last season. This along with a good international crop position has meant lower domestic prices, but a major part of the benefit from lower prices will accrue to the division only in the current year.

As a part of the restructuring of the textile business and consolidation of manufacturing facilities at one location, the Company disposed of the old equipment at Spring Mills and rightsized the workforce. 450 positions were reduced under a scheme of voluntary separation resulting in considerable cost saving. The resultant shortfall in yarn and grey cloth production is being made good by outsourcing. Substantial cost savings in yarn production are expected as a result.

The Textile Division is restructuring its manufacturing base, by setting up processing and stitching facility at an alternate location in Maharashtra to take advantage of the export opportunities thrown open in the quota-free regime. In the meanwhile new finishing equipment for wide-width fabrics like singeing, mercerising and sanforizing has been installed at the Mumbai location and will enable the division to offer a product quality matching that of the leading international competitors.

In the domestic market, the company's brand image will be further strengthened through the opening of new showrooms each planned to cater to the requirements of the diversified and discriminating clientele. These showrooms will have international appeal and showcase a wide range of attractive bed and bath products.

DMT DIVISION:

The year under review bettered the earlier records of production and sale volumes at 1,60,210 tonnes and 1,62,504 tonnes respectively. The turnover for the year was Rs. 745.33 crores compared to Rs. 601.68 crores in the previous year. While the margins were reasonable in the first nine months, the performance in the last quarter of the year was affected by a drop in DMT prices consequent upon a sharp drop in the prices of Paraxylene, the major raw material. Customs duty reduction for DMT from 20% to 15% in the current year national budget has further aggravated the situation.

Anticipating limited opportunities for sale of DMT with the advent of new Continuous Polymerisation Plants and PTA capacities in the country, the Division is setting up a 1,65,000 tpa PSF Plant at the existing DMT Plant site. Superior Logistics and Energy Management owing to forward integration into PSF is expected to improve the profitability over the years.

Various initiatives under Environment, Health and Safety Management enabled the Division to obtain the 5-Star Safety rating from the British Safety Council.

REAL ESTATE DIVISION

This new division has taken initial steps to build the organization over the year, to be in a position to develop the two properties - Spring Mills, Dadar and Textile Mills, Worli.

The Spring Mills development planned in phases with residential usage, commercial usage, school, etc., was delayed due to the regulatory approvals as also the Public Interest Litigation (PIL) filed in February, 2005. The PIL has challenged the 2001 Amendment to the Development Control Regulation 58, which sets out the framework of the orderly development of Cotton Textile Mills. The matter went to the Supreme Court, and based on this order, your Company is hopeful of commencing construction and sales at the Spring Mills in the near future. However, these would be subject to the final disposal of the case in the appropriate Court, as also the adherence to and in conformity with the orders of the Supreme Court dated 11th May, 2005.

6. BUY-BACK OF SHARES

No public announcement was made pursuant to the third round of buy-back as per the Scheme approved on 24th September, 2003 by the Board of Directors of the Company in terms of Section 77A read with first proviso to Clause (b) of sub-section (2) thereof, since the market price of the shares remained above the maximum price of Rs. 90/- per share determined as per the Scheme throughout the validity period of the resolution of the Board which expired on 23rd September, 2004.

VOLUNTARY DELISTING OF SHARES

The Company's equity shares were Relisted from the Calcutta Stock Exchange Association Ltd. (CSE) with effect from 21st July, 2004 pursuant to the resolution passed by the shareholders at the 123rd Annual General Meeting held on 30th July, 2003.

FIXED DEPOSITS

The Company suspended acceptance of fresh deposits and renewal of existing deposits from 1st March, 1999. Despite several reminders, deposits from 22 depositors aggregating to Rs. 1.16 lacs have remained unclaimed as on 31st March, 2005.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the Company has transferred a sum of Rs. 16,55,518.85 representing the amount due and payable and remaining unpaid for a period of 7 years, as provided in Section 205C of the Companies Act, 1956.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure A to this Report.

EMPLOYEE STOCK OPTION SCHEME

Requisite disclosure in respect of the Employee Stock Option Scheme in terms of guideline 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Share Purchase Scheme) Guidelines 1999, has been provided in Annexure `B' to this Report.

The Share Capital of the Company has gone up from Rs.38.52 crores as at 31st March, 2004 to Rs.38.58 crores as at 31st March, 2005 and to Rs.38,61 crores as on the date of this Report consequent upon allotment of 55,000 and 23,700 equity shares upon the exercise by two of the working directors of stock options granted under the Company's Employee Stock Option Scheme in 2003 and 2004, respectively.

PERSONNEL

Employees of the Textile Division were paid Bonus as per the provisions of the Bonus Act. An additional 4.17% Ex-gratia payment was made to maintain harmonious industrial relations.

Ex-gratia payment to the employees of the DMT plant, covered by the Payment of Bonus Act, was made as a gesture of goodwill and for maintaining cordial industrial relations.

INSURANCE

All the properties including buildings, plant and machinery and stocks have been adequately insured.

DIRECTORS

Mr. M. K. Singh who was appointed as Additional Director on 24th July, 2004 holds office up to the date of the forthcoming Annual General Meeting under Section 260 of the Companies Act, 1956 and Article 117 of the Articles of Association. A notice has been received by the Company from a member under Section 257 of the Companies Act proposing his appointment as Director. Mr. Singh was also appointed as a Whole-time Director designated as Executive Director for a period of 5 years with effect from 24th July, 2004.

Mr. S. N. Desai who was associated with the Company for over 27 years as a Director and also as a member of the Audit Committee of the Board passed away on 10th November, 2004. During his long association with the Company, he made valuable contribution to the deliberations of the Board and the Audit Committee. The Board has placed on record its deep sense of loss on the passing away of Mr. Desai.

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association Dr. H. N. Sethna, Mr. A. K. Hirjee and Mr. Ness N. Wadia retire by rotation and are eligible for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 (hereinafter referred to as "the Act"), your Directors, based on the representations from the Operating Management, confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

(ii) they have, in selection of the accounting policies consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as. to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability for the 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement a separate report on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to the Directors Report.

PARTICULARS OF EMPLOYEES

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, and forming part of the Directors' Report for the year ended 31st March, 2005 has been provided in Annexure C to this Report.

AUDITORS

Members are requested to appoint Messrs. A. F. Ferguson & Co. as Auditors at a remuneration to be fixed by the Board of Directors.

On behalf of the Board of Directors

NUSLI N. WADIA CHAIRMAN Mumbai, 8th June, 2005

Registered Office Neville House, J. N. Heredia Marg, Ballard Estate, Mumbai 400 001

ANNEXURE `A' TO THE DIRECTORS' REPORT

Information under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Report for the year ended 31st March, 2005.

A. CONSERVATION OF ENERGY:

(a) Energy Conservation Measures taken

Some of the measures your Company had undertaken/continued to implement during the year under report in the high priority area of energy conservation are given below:

Textile operations

- Effective and controlled operation of humidification and chilling plant.

- Establishment of energy conservation cell to monitor constantly energy consumption and continuously explore ways and means to reduce energy consumption.

- Controlling maximum demand and improvement of power factor thereby saving cost of demand charges.

- Controlled working of tube lights and switching them off wherever not in use.

DMT operations

- Power saving by improved power recovery from expansion turbine of process air compressor by replacement of its rotor and guide vane, bypassing of process pumps and use of energy efficient light fittings.

- Fuel saving by replacement of old condensate headers, valves and traps.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.

Nil

(c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent Impact on the cost of production of goods.

Optimisation and control of energy related costs help your Company to remain competitive in both domestic and international markets.

Reduction in consumption of power and fuel during the year in DMT operations is equivalent to an energy saving of 17.6 KWH/MT compared to the previous year.

(d) Total Energy Consumption and Energy Consumption per unit of production in prescribed Form A.

As per Form `A' attached.

B. TECHNOLOGY ABSORPTION:

Research and Development(R&D)

1. Specific areas in which R&D carried out by the Company

(a) Process optimisation/Recipe modification/Introduction of new dyes and chemicals for `cost economy.'

(b) Process Standardisation.

(c) Process Development.

(d) Product Development.

2. Benefits derived as a result of the above R&D

(a) Meeting customer needs and in turn increased customer satisfaction.

(b) Improvement in Business Viability.

3. Future plan of action

(a) To optimise all production processes on the three newly installed machines.

(b) To assist production departments in achieving higher targets on packing performance.

(c) To re-establish process routes of all the qualities in order to take advantage of the newly installed machines.

(d) To find out and implement use of alternate dyes and chemicals for cost economy.

4. Expenditure on R&D

Expenditure on R&D during the year under report amounted to Rs 0.36 crore.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology absorption, adaptation and

Innovation

(a) Introduction of new mercerising, singeing & sanforising machines for improvement in the overall quality and competitiveness in the market.

(b) Implementation of bleaching of higher thread-count fabric process route by J-Box instead of costlier open width bleaching route.

(c) Setting of dyeing of satin-stripe qualities on CDR by `On-line' dyeing.

(d) Development of `APEO' free based products process to meet the international eco-standards of fabric test parameters.

(e) Introduction of superior quality of sodium silicate for use in dyeing & bleaching.

(f) Optimisation of the bleaching and finishing process for bleached-finished qualities for uniform and consistent whiteness.

(g) Introduction of a prepadding process with a new finishing auxiliary for specific printed sheeting qualities to get uniform prints.

(h) Introduction of new softener to get excellent feel on sheeting qualities for export market.

(i) Optimisation of process parameters for finishing and calendering of printed sheeting qualities for better brightness and feel of the fabric.

(j) Elimination of `Mercerising' process for producing lungi fabric to secure saving in chemical cost.

(k) Dechlorination of the municipal water used for dyeing reactive colours to get better reproducibility of shades.

(l) Fixation of reactive prints by silicate padding on Babcock Steamer-soaper to get increased production with lower chemical cost.

(m) Replacement of the existing fillets on raising machine with new ones to get higher production and raising effect.

2. Benefits derived as a result of the above efforts:

(a) Cost reduction and faster fabric delivery due to process modification and optimisation.

(b) Product quality improvement.

(c) Cost reduction due to improved packing performance.

(d) `Quality Consistency' due to standardisation of processes.

(e) Process improvement and energy conservation

3. Information regarding technology imported during the last 5 years:

(a) Technology imported. - (b) Year of import. - (c) Has technology been fully absorbed. - (d) If not fully absorbed, areas where this has not taken place, - reasons therefore and future plans of action.

4. FOREIGN EXCHANGE EARNINGS AND OUTGO:

1. Activities relating to exports.initiatives taken to increase exports, development of export markets for products and services and export plans.

The Company continued its efforts towards growth of sales in processed fabrics and finished madeups. From January 2005, with the removal of quota restrictions, price competition has become very severe. The Company has modernized its finishing facilities in Mumbai to successfully compete in the American and EEC markets. Participation in international fairs continues for added exposure to buyers in the value-added segments.

2. Total foreign exchange used and earned. Rs. in Crores

Total foreign exchange used 284.16 Total foreign exchange earnings 233.22

It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs. 599.67 crores.

On behalf of the Board of Directors

NUSLI N. WADIA Chairman

Mumbai, 8th June, 2005


Mar 31, 2004

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2004.

FINANCIAL RESULTS:

For the year ended For the Year ended 31st March, 2004 31s1 March, 2003 Rupees in Crores Rupees in Crores

GROSS TURNOVER AND OTHER INCOME 1072.51 1005.37

Profit before Finance Costs, Depreciation & Voluntary Retirement Compensation 117.38 88.71 Finance Costs 10.39 17.95

Profit before Depreciation & Voluntary Retirement Compensation 106.99 70.76 Depreciation 34.43 37.23 Voluntary Retirement Compensation - -

PROFIT BEFORE TAX 72.56 33.53 Less: Tax (net) 19.06 1.22

PROFIT AFTER TAX 53.50 32.31 Add: Balance in Profit and Loss Account of Previous Year 106.97 90.91

SURPLUS AVAILABLE FOR APPROPRIATIONS 160.47 123.22

Appropriations to:

Proposed Dividend: Final Dividend 15.41 11.54 Corporate Dividend Tax 1.97 1.48 Debenture Redemption Reserve 18.74 - General Reserve 5.35 3.23 Balance carried to Balance Sheet 119.00 106.97

COMPANY RESULTS AND DIVIDEND:

The Directors are happy to report a higher net profit of Rs. 53.50 crores as compared to Rs. 32.31 crores last year. Better margins in the Company's textile and DMT businesses, substantially lower finance costs and profits from sale of assets no longer required for the Company's operations have contributed to the improved results.

Despite a marginal drop in sales turnover, the textile business has reported a better financial performance by concentrating on elimination of non-value added businesses, product-mix upgradation, and sustained emphasis on cost reduction and cost control. The textile manufacturing activity is being consolidated at the Textile Mill, Worii location. The manufacturing activity at Spring Mill at Dadar is being wound down. Development activity at Spring Mill land, for which all the requisite clearances have been received, will commence shortly.

The DMT business registered record levels of production and sale volumes in spite of the year commencing on an adverse note. Turnover grew by 20%, though margins were slightly lower than the previous year.

The finance costs of the Company have come down significantly from Rs. 17.95 crores last year to Rs.10.39 crores this year given the Company's ability to access low cost funds both in the domestic and international markets. Both the operating divisions are expected to turn in good performance in the current year. Also, no significant increases in the finance cost are expected in the current year.

Having regard to the above, your Directors recommend a dividend of Rs.4/- per equity share of Rs.10 each for the year ended March 31, 2004 to be paid, if declared by the members at the Annual General Meeting to be held on 23rd July, 2004.

TEXTILE DIVISION:

The financial results of the Textile Division of the Company have improved considerably despite higher raw material prices and continuing challenges faced by it both in the domestic and international markets. The improvement in the financial performance of the division was achieved through sustained product mix improvement and cost control initiatives.

The sales turnover during the year under review was Rs. 407 crores which is 8% lower than the previous year.

Overall margins in the export business improved through a further rationalisation of the product portfolio and added focus on value added processed fabrics and made-up exports. Some of the initiatives taken during the year include development of higher thread count for bedlinen, new finishes and co-ordinated bedsets. The improvement in margins has also to be seen in the context of constrained quota availability and anti-subsidy levy imposed by the EEC. In the domestic market, the Company strengthened its brand image by a very successful advertising campaign which will be leveraged in the coming year.Better working capital management and substantial reduction in finished inventories was another highlight of the year under review.

The domestic cotton crop in the current season was higher by about 20% as compared to the last season. However lower crop in USA and China resulted in an increase in the international prices and the Indian cotton prices followed the international trend. Reasonable rains in the early part of monsoon season along with increased cotton sowing may see some softening of prices in the forthcoming season.

The abolition of the bilateral quotas under the Multi-Fibre Agreement in January 2005 will throw open huge opportunity both for sourcing good quality fabric at competitive prices as also for exports which are largely constrained by non-availability of quotas today. Although China and Pakistan are expected to offer stiff competition, the report of the International Textile Manufacturer's Federation (ITMF) highlights India's emergence as a competitive production base and places it almost on par with China as a cost efficient textile producer. The Company's inherent strengths in the textile business make it well positioned to take full advantage of the changing world scenario.

As a part of the restructuring of textile business and consolidation of the manufacturing facilities at one location, the Company disposed of some of the old technology equipment and right-sized the work force. About 1100 operative positions were reduced by a scheme of voluntary separation. This resulted in a 37.5% drop in the loom state production as compared to the previous year, mainly the lower end, lower margin category which was partly made up through outsourcing. The consequent drop in volumes has had little impact on the profitability of the division.

DMT DIVISION:

The year under review saw the best ever production and sale volumes of 1,59,345 tonnes and 1,61,067 tonnes respectively, in spite of poor sales in the first two months of the year owing to problems in the downstream POY sector. As the prices of DMT and its raw materials continued to rule high, the turnover for the year amounted to Rs.601.68 crores compared to Rs.503.94 crores in the previous year - an increase of almost 20%. However, margins were somewhat lower than the previous year mainly due to the strengthening of the Indian Rupee against the US dollar and abolition of special additional duties of customs in January 2004, resulting in reduction in landed prices of DMT/PTA.

Various initiatives under Total Quality Management and cost reduction continued throughout the year and the employees of the Division won several Quality Circle Awards at the State and National levels.

The polyester market is witnessing significant growth and a shortage of raw materials is envisaged in the coming year and possibly in the following year as well. Consequently, the DMT business expects to produce good results. The threat of significant reduction in import duty on DMT/PTA this year and next year, however, remains.

BUY-BACK OF SHARES.

The Company was unable to complete its second round of buyback owing to inadequate liquidity in the Company's shares in the market. As at the closure of the second round of buy-back on 27th August, 2003 the number of paid up equity shares stood reduced to 3,84,56,570 from 3,90,06,551 as at 31st March, 2003. Subsequently 70,000 equity shares were allotted to two of the working directors of the Company on the exercise by them of the stock options granted under the Company's Employee Stock Option Scheme. With this allotment, the number of paid up equity shares stands at 3,85,26,570 as at 31st March, 2004.

No public announcement was made pursuant to the third round of buy-back as per the Scheme approved on 24th September, 2003 by the Board of Directors of the Company in terms of Section 77A read with first proviso to Clause (b) of sub-section (2) thereof, since the market price of the shares continues to be above the maximum price of Rs. 90/- per share determined as per the Scheme. However, the above resolution of the Board remains valid until 23rd September, 2004.

VOLUNTARY DELISTINQ OF SHARES

The Company's equity shares were delisted from the Delhi Stock Exchange Association Ltd. (DSE) and the Madras Stock Exchange Ltd. (MSE) with effect from 26th September, 2003 and 20th October, 2003 respectively pursuant to the resolution passed by the shareholders at the 123rd Annual General Meeting held on 30th July, 2003.

LEASING

No fresh leasing business was transacted during the year.

FIXED DEPOSITS

The Company suspended acceptance of fresh deposits and renewal of existing deposits from 1st March 1999. Despite several reminders, deposits from 38 depositors aggregating to Rs. 2.54 lacs have remained unclaimed as on 31st March 2004.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the Company has transferred a sum of Rs. 15,94,450.54 representing the amount due and payable and remaining unpaid for a period of 7 years, as provided in Section 205C of the Companies Act, 1956.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure `A' to this Report.

EMPLOYEE STOCK OPTION SCHEME

Requisite disclosure in respect of the Employee Stock Option Scheme in terms of guideline 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Share Purchase Scheme) Guidelines, 1999, has been provided in Annexure `B' to this Report.

PERSONNEL

Employees of the Textile Division were paid Bonus as per the provisions of the Bonus Act. An additional 4.17% Ex-gratia payment was made to maintain harmonious industrial relations.

Ex-gratia payment to the employees of the DMT plant, covered by the Payment of Bonus Act, was made as a gesture of goodwill and for maintaining cordial industrial relations.

INSURANCE

All the properties including buildings, plant and machinery and stocks have been adequately insured.

DISPOSAL OF JAMNAGAR AND ROHA PLANTS

The Company has disposed of the land at Jamnagar as well as the land and building at Roha during the year.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association Mr. Nusli N. Wadia, Mr. Keshub Mahindra, Mr. R. A. Shah and Mr. Venu Srinivasan retire by rotation and are eligible for re-appointment. Mr. Srinivasan, however, does not wish to seek re-appointment due to his other pre-occupations. The Board has placed on record its appreciation of the valuable advice given by Mr. Srinivasan during his tenure as a director of the Company.

Mr. Ninu Khanna, Mr. P. V. Kuppuswamy and Mr. Ness N. Wadia were reappointed respectively as the Managing Director, Joint Managing Director and Deputy Managing Director for a period of five years with effect from 1st June, 2004.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 (hereinafter referred to as "the Act"), your Directors, based on the representations from the Operating Management, confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

(ii) they have, in selection of the accounting policies consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;

(Hi) they have taken proper and sufficient care, to the best of their knowledge and ability for the 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement a separate report on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to the Directors' Report.

PARTICULARS OF EMPLOYEES

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, and forming part of the Directors' Report for the year ended 31st March 2004 has been provided in Annexure `C' to this Report.

AUDITORS

Members are requested to appoint Messrs. A. F. Ferguson & Co. as Auditors at a remuneration to be fixed by the Board of Directors.

On behalf of the Board of Directors

NUSLI N.WADIA CHAIRMAN

Mumbai, 11th May, 2004

Registered office Neville House, J. N. Heredia Marg, Ballard Estate, Mumbai 400 001

ANNEXURE `A' TO THE DIRECTORS' REPORT

Information under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Report for the year ended 31st March, 2004.

A. CONSERVATION OF ENERGY:

(a) Energy Conservation Measures taken

Some of the measures your Company had undertaken/continued to implement during the year under report in the high priority area of energy conservation are given below:

Textile operations

- Effective and controlled operation of humidification and chilling plant.

- Establishment of energy conservation cell to monitor constantly energy consumption and continuously explore ways and means to reduce energy consumption.

- Controlling maximum demand and improvement of power factor thereby saving cost of demand charges.

- Controlled working of tube lights and switching them off wherever not in use.

DMT operations

- Power saving through rewinding of transformers, replacement of existing light fittings with energy efficient fittings, bypassing of process pumps, optimisation of pump running hours, replacement of existing equipment with energy efficient equipment.

- Fuel saving by further optimisation of use of steam at different pressures.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.

Nil

(c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods.

Optimisation and control of energy related costs help your Company to remain competitive in both domestic and international markets. Reduction in consumption of power and fuel during the year in DMT operations is equivalent to an energy saving of 57 KWH/T compared to the previous year.

(d) Total Energy Consumption and Energy Consumption per unit of production in prescribed Form A.

As per Form `A' attached.

B. TECHNOLOGY ABSORPTION:

Research and Development (R&D)

1. Specific areas in which R&D carried out by the Company

(a) Process optimisation/Recipe modification/Introduction of new dyes and chemicals for `cost economy.'

(b) Process Standardisation.

(c) Process Development.

(d) Product Development.

2. Benefits derived as a result of the above R&D

(a) Meeting customer needs and in turn increased customer satisfaction.

(b) Improvement in Business Viability.

3. Future plan of action

(a) To reset all production processes after commissioning of the proposed three new machines in the plant during the current year.

(b) To assist production departments in achieving higher targets on packing performance.

(c) To standardise production recipes/processes for achieving improved consistency in the finished products.

(d) To find out and implement use of alternate dyes and chemicals for cost economy.

4. Expenditure on R&D

Expenditure on R&D during the year under report amounted to Rs 0.34 crore.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology absorption, adaptation and Innovation

(a) Introduction of 'Causticising' process for improvement in overall fabric `quality' of processed fabrics,

(b) Introduction of `full' aquous system for printing with pigments.

(c) Development of a new process for improving `pilling' performance of polyester/cotton sheeting fabrics.

(d) Development and bulk implementation of a process for improving whiteness durability of bleached finished cotton fabrics.

(e) Development of a new process for fixation of reactive prints.

(f) Development of a new process for 'caledon' dyeing for releasing production capacity of a bottleneck machine.

(g) Process standardization/optimisation for reducing `reprocessing' of fabrics in production departments.

(h) Setting up of a `single' stage run bleaching process on open-width continuous bleaching range.

(i) Improving wet rub fastness for sulphur black dyed fabrics for an industrial customer by modification of finishing recipe.

(j) Process modification for improving quality of finish for medium and dark shade dyed fabrics.

2. Benefits derived as a result of the above efforts:

(a) Cost reduction and faster fabric delivery due to reduced `reprocessing'.

(b) Product quality improvement.

(c) Cost reduction due to improved packing performance.

(d) `Quality Consistency' due to standardisation of processes.

3. Information regarding technology imported during the last 5 years:

(a) Technology imported - (b) Year of import - (c) Has technology been fully absorbed - (d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action -

4. FOREIGN EXCHANGE EARNINGS AND OUTGO:

1. Activities relating to exports,initiatives taken to increase exports, development of export markets for products and services and export plans.

The Company further rationalised its export portfolio, focussing on value added processed fabric and made-up exports and reduction of low margin businesses, particularly grey fabrics. Most of the shift came from USA, Canada and South American segments. The Company continued its participation in international fairs to promote sales and establish new contacts in these value-added segments.

2. Total foreign exchange used and earned. Rs. in Crores.

Total foreign exchange used 175.52 Total foreign exchange earnings 190.02

It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs. 522.77 crores.

On behalf of the Board of Directors,

NUSLI N. WADIA Chairman

Mumbai, 11th May, 2004


Mar 31, 2003

The Directors hereby present their Report on the business and operations of the Company and the financial accounts tor 2003.

1. FINANCIAL RESULTS:

For the year ended For the Year ended 31st March, 2003 31st March, 2002 Rupees in Crores Rupees in Crores

GROSS-TURNOVER 1005.37 932.04

Profit before Interest & Depreciation & Voluntary Retirement Compensation 87.20 30.26

Interest 16.44 31.99

Profit before Depreciation and Voluntary Retirement Compensation 70.76 (1.73)

Depreciation 37.23 43.65

Voluntary Retirement Compensation - 5.30

PROFIT BEFORE TAX 33.53 (50.66)

Less: Tax (net) 1.22 (21.62)

PROFIT AFTER TAX 32.31 (29.06)

Add: Balance in Profit and Loss Account of Previous Year 90.91 105.59

Add: Transferred from Investment Allowance Reserve - 18.00

Add: Transferred from Debenture Redemption Reserve - 4.21

SURPLUS AVAILABLE FOR APPROPRIATIONS 123.22 98.74

Appropriations to:

Proposed Dividend:

Final Dividend 11.54 7.83

Corporate Dividend Tax 1.48 -

General Reserve 3.23 -

Balance carried to Balance Sheet 106.97 90.91

2. COMPANY RESULTS AND DIVIDEND:

Your Directors are happy to report that the Company has made a return to profitability In the current year. DMT margins have been significantly better during the year enabling the division to earn a reasonable return even after absorbing significant increases in the prices of Its raw materials. Textile business continued to face competitive pressures both at home and abroad.

However, substantial progress has been made in both the Divisions in the areas of cost control and cost containment. Cost savings in the DMT business were unfortunately restricted due to tower level of production caused by tower domestic demand. The interest bill for the Company has come down by nearly 50% from Rs.31.99 crores to Rs.19.44 crores mainly on account of softer interest rates • and the Companys ability to access lower cost finance in Foreign Exchange.

Though the DMT business has experienced considerable volatility in the first quarter of the current year arising out of unstable situation in the Middle East, it is expected that from the second quarter onwards the Division should see a near normal level of operations and profitability. The Textile business should also see better days ahead as access to developed country market becomes easier on account of abolition of quotas next year.

Having regard to the above, your Directors recommend a dividend of Rs. 3/- per Equity share of Rs.10 each for the year ended March 31, 2003 to be paid, if declared by the members, at the Annual General Meeting to be held on 30th July, 2003.

3. TEXTILE DIVISION:

The sales turnover of the division for the year ended March 31, 2003 was Rs.422.10 crores, 11% lower than last year. The decline in turnover was mainly in the domestic market while exports grew by 11%.

The sluggish domestic market conditions resulted in reduced consumer off-take, leading to approximately 8% lower cloth production. During the year, we entered Into a joint venture with "Proline India Ltd.", and transferred our Readymade Garment business to this new JV effective October 1, 2002. While the turnover of the Readymade Garment business was insignificant in the current year, considerable interest has been generated among the consumers since the transfer. The off-take to date is satisfactory and the business prospects are looking good.

In Export our performance Improved as compared to the last year. The major part of export growth came from made-up business in the US market. This was achieved despite difficult quota availability and the high cost of buying quota. Purchase of quotas at high premia added to the Companys cost making it very difficult for it to compete in the international markets not only with China and Pakistan but also with other developing countries. Exports to EEC declined drastically due to customs and proposed anti-subsidy duties on imports of cotton bed linen from India while countries like Pakistan enjoy a waiver of basic duty and no penalties.

In 2005, on abolition of quota, the Company will have a level playing field. In order to meet the challenges, the division has focussed on product development in higher thread count for bed sheets, introduced new finishes to enhance product attributes, and concentrated on value addition of fabrics and conversion into exclusive made-ups. The other initiatives include development of coordinated sets, bed in bag products of duvet, pillow, shams, bed skirts etc.

In our wholesale division, reduction In Excise duties for Interlining business will improve the turnover and margins from the year 2003-2004 onwards.

Despite tough operating conditions, the division was successful In making major improvements In our operating efficiencies and cost control. The domestic cotton crop was 10-15% lower than average, leading to a pressure on raw material price. This was compounded by a decline in international cotton crop and commensurating increase In prices internationally too. Reasonable rains in the early part of the monsoons should see softening of prices in the forthcoming cotton season.

The Division is in the process of re-structuring Its business and manufacturing facilities, which will lead to lower In-house production but better financial results. The thrust will be on brand building and leveraging the brand in the best interest of the Textile business.

4. DMT DIVISION:

The turnover of the Division during the year was Rs.503.94 crores-an increase of 27% over the previous years level of Rs.398.43 crores. Higher DMT prices have mainly contributed to the growth in the turnover during the year. With higher price realisations in the DMT business, the Division could absorb significant rises in prices of raw materials viz. Paraxylene and Methanol and still report a profitable operation.

Due to lower domestic demand for the first 9 months of the year as well as disturbance in the market-during March 2003, production was restricted which limited the extension of cost savings that could be achieved. 20,662 tonnes of DMT were exported during the year to enable higher Plant loads. Also new Initiatives were taken to reduce variable and fixed costs In the manufacture of DMT. Several projects were also executed under the aegis of Quality Management, Environmental Management and Safety Management.

Deferred Sales Tax liability aggregating Rs.32.26 crores was settled In full by the Company by a one-time payment of Rs. 19.41 crores representing the Net Present Value to the deferred liability to the Government of Maharashtra resulting in write In of Rs. 12.85 crores to the Profit & Loss Account of the Company.

The end of the year under report witnessed serious trouble in the market including strike by weavers protesting against Cenvat and unprecedented price fluctuations in PTA/DMT/Paraxylene In view of the Iraq war resulting, in poor off-take of DMT. The business expects to see normalcy within a short period of time.

5. BUY-BACK OF SHARES.

In spite of the Company being unable to complete its first round of buyback due to Inadequate liquidity In the Companys shares in the market, a second round of buy-back as per the Scheme approved oh 28th August, 2002 by the Board of Directors of the Company in terms of Section 77A read with first proviso to Clause (b) of sub-section (2) thereof was announced In October, 2002. Under this Scheme the Company bought back and extinguished

1,68,324 equity shares at an average price of Rs. 44.99 per share. Accordingly the number of paid-up equity shares as on 31st March, 2003 stands reduced to 3,90,06,551 from 3,91,74,875 as at the closure of the first round of buy-back. Subsequently 5,49,981 shares have been bought back at an average price of Rs.46.47 and extinguished. The current Buy-Back Scheme remains valid until 27th August, 2003.

6. TAXATION

Tax Assessments up to the Assessment Yrear 2001-2002 have now been completed. The Tax Department has raised a demand of Rs.2.62 crores for Assessment Year 2000-01 against which the books of Accounts carry a provision of Rs.1.32 crores. The Company is contesting the demand In appeal and expects to succeed. Consequently, no further provision in the books of accounts is considered necessary. However disputed demand has been disclosed as a contingent liability.

7. SUBSIDIARY COMPANIES

The Company had no subsidiaries as on 31st March, 2003 consequent upon the divestment of a major part of its holdings in the erstwhile subsidiaries viz. Archway Investment Company Ltd., Scal Services Ltd. and Pentafil Investments Ltd. during the year.

8. REGISTRAR AND TRANSFER AGENTS

The Securities & Exchange Board of India (SEBI) has made it mandatory for all listed companies to have a common agency for physical and electronic share registry work by 31st March, 2003. Accordingly the Company has appointed Sharepro Services as its Registrar & Transfer Agents (R &TA) with effect from 16th March, 2003 to handle physical and electronic share registry work.

9. LEASING BUSINESS:

No fresh leasing business was transacted during the year. The gross income earned during the year from outstanding leasing business amounted to Rs 4.80 lacs.

10. FIXED DEPOSITS

The Company suspended acceptance of fresh deposits and renewal of existing deposits from 1st March, 1999. Despite several reminders, deposits from 59 depositors aggregating to Rs. 3.90 lacs have remained unclaimed as on 31- March, 2003. During the year, the Company transferred Rs. 22.77 lacs to the Investor Education and Protection Fund in terms of Section 205C of the Companies Act, 1956 by way of principal and interest on Fixed Deposits that remained unclaimed for seven years.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars In the Report of Board of Directors) Rules, 1988 is given in Annexure A to this Report.

12. EMPLOYEE STOCK OPTION SCHEME

Requisite disclosure In respect of the Employee Stock Option Scheme In terms of guideline 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Share Purchase Scheme) Guidelines 1999, has been provided in Annexure B to this Report.

13. PERSONNEL

143 employees who completed 25 years service and 16 employees who completed 40 years service with the Company during the year will be recipients of the Long Service Awards.

Employees of the Textile Division were paid Bonus as per the provisions of the Bonus Act. An additional 4.17% ex-grate payment was made to maintain harmonious industrial relations.

Ex-grate payment to the employees of the DMT plant, covered by the Payment of Bonus Act, was made as a gesture of goodwill and for maintaining cordial industrial relations.

14. INSURANCE

All the properties including buildings, plant and machinery and stocks have been adequately insured.

15. DISPOSAL OF JAMNAGAR AND ROHA PLANTS

An agreement for the sale of the land at Jamnagar is likely to be concluded shortly. The Company continues its efforts to dispose of the land and building at Roha.

16. DIRECTORS:

Mr. K. F. Rustamji who was associated with the Company for over 25 years and had been a member of its Board since 1982 passed away on 2nd March 2003 . During his long association with the Company, he made valuable contribution to the deliberations of the Board. The Board has placed on record its deep sense of loss on the passing away of Mr. Rustamji.

Mr. S. Ragothaman who was appointed as an Additional Director on 11th June, 2003, holds office up to the date of the forthcoming Annual General Meeting in terms of Section 260 of the Companies Act, 1956 and Article 117 of the Articles of Association. A Notice has been received by the Company from a member under Section 257 of the Companies Act, 1956 proposing his appointment as a Director. Mr. Ragothaman earlier served on the Board as a nominee of ICICI Ltd. from September, 1995 to February, 2003.

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association Mr. S. N. Desai, Mr. R. N. Tata and Mr. S. S. Kelkar retire by rotation and are eligible for re-appointment.

17. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 (hereinafter referred to as "the Act"), your Directors, based on the representations from the Operating Management confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

(ii) they have, in selection of the accounting policies consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability for the 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

18. CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement a separate report on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to the Directors Report. Attention of the Members is drawn to the Corporate Governance section and Item 9 of the Notice of the Annual General Meeting on the proposed voluntary delisting of the Companys Equity Shares, from all the stock exchanges other than the Stock Exchange, Mumbai, and the National Stock Exchange of India Ltd., and justification thereof.

19. PARTICULARS OF EMPLOYEES:

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, and forming part of the Directors Report for the year ended 31st March, 2009 has been provided in Annexure C to this Report.

20. AUDITORS

Members are requested to appoint Messrs. A. F. Ferguson & Co. as Auditors at a remuneration to be fixed by the Board of Directors.

On behalf of the Board of Directors NUSLI N.WADIA Chairman Mumbai, 11th June, 2003

Registered Office:

Neville House, J.N.Heredia Marg, Ballard Estate, Mumbai 400 001

ANNEXURE- `A TO THE DIRECTORS REPORT

Information under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars In the Report of Board of Directors) Rules, 1988 and forming part of the Directors Report for the year ended 31st March, 2003.

A CONSERVATION OF ENERGY :

(a) Energy Conservation Measures taken Some of the measures your Company had undertaken/continued to Implement during the year under report In the high priority area of energy conservation are given below:- Textile of operations

* Effective and controlled operation of humidification and chilling plant.

* Establishment of energy conservation cell to monitor constantly energy consumption and continuously explore ways and means to reduce energy consumption.

* Controlling maximum demand and Improvement of power factor thereby saving cost of demand charges.

* Controlled worklng of Tube lights and switching them off wherever not In use.

DMT operations

* Power saving through Installation of efficient pumps and optimisation of pump Impeller sizes, equipment running hours and secondary voltage of lighting transformer.

* Fuel saving by further optimisation of use of steam at different pressures.

(b) Additional Investments and proposals, If any, being Implemented for reduction of consumption of energy.Nil

(c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent Impact on the coat of production of goods.

Optimisation and control of energy related costs help your Company to remain competitive in both domestic and international markets. Reduction In consumption of power and fuel during the year In DMT operations Is equivalent to an energy saving of 162 KWH/T compared to the previous year.

(d) Total Energy Consumption and Energy Consumption per unit of production In prescribed Form A. 1 As per Form `A attached.

B. TECHNOLOGY ABSORPTION:

Research And Development (R&D)

1. Specifc areas In which R & D carried out by the Company

(a) Quality Improvement.

(b) Cost Reduction.

(c) Process Standardisation.

(d) Process Development

(e) Product Development.

2. Benefits derived as a result of the above R & D

(a) Meeting customer needs and in turn Increased customer satisfaction.

(b) Improvement In Business Viability.

3. Future plan of action

(a) To take up projects on Quality Improvement to meet the increasing customer quality requirements.

(b) Standardisation of production recipes/processes for achieving Improved consistency in the finished products.

(c) Finding out and implementing use of alternate dyes and chemicals tor cost economy.

(d) Optimisation of production processes for achieving process cost reduction and in turn Improved marketability.

(e) Development of new finishes to meet customer needs.

4. Expenditure on R & D

Expenditure on R & D during the year under report amounted to Rs. 0.26 crore.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts In brief, made towards technology absorption, adaptation and Innovation

(a) Review and rationalisation of chemical recipes used In bleaching for Improving product consistency/cost reduction.

(b) Process modification for some of the bleach-finished qualities of industrial market for cost reduction.

(c) Modification of process/recipes In J-Box bleaching to avoid storage of fabrics in pits and in turn taster movement of material and reduced cloth inventory, in Bleaching Department.

(d) Studies on Machine Tensions vis-a-vis cloth elongation In processing and In turn suggestions for improvement for overcoming higher residual shrinkage problem In wider width sheetings tor export.

(e) Setting up and standardising process for P/C Drill fabric for a reputed Industrial market customer and In turn getting increased business.

(f) Standardising process parameters In bleachlng/dyelng/finishing for obtaining Improved Shade Consistency In dyed shades especially for export,

(g) Development of new finishes as per marketing requirements with HDPE and LDPE powders in soft/medium/stiff Interilnings.

(h) Review, modification and Implementation of chemical recipes for entire range of interlining fabrics for overcoming the perennial `Residual Shrinkage problem.

(i) Standardising process parameters for all operations of production of interlining fabrics in order to get consistent product quality.

(j) Development of new finishes, such as Cool, Antiodour/Antibacterial finishes for achieving increased business in RDS/lndustrial Markets.

2. Benefits derived as a result of the above efforts:

Increased business viability arising from:

i) Cost reduction In dyes and chemicals.

ii) Cost reduction due to optimisation of production processes.

iii) Cost reduction due to reduced cloth Inventory.

iv) Quality Improvement due to review and rationalisation of production processes.

v) Quality Consistency due to standardisation of processes.

vi) Meeting customer needs by modification of existing processes/development of new processes/finishes.

vii) Cost saving on power consumption through secondary voltage optimisation of lighting transformer, Installation of efficient pumps, impeller size optimisation and optimisation of equipment running hours.

viii) Cost saving on fuel consumption through optimised use of steam at different pressures.

3. Information regarding technology Imported during the last 5 years:

(a) Technology imported

(b) Year of import.

(c) Has technology been fully absorbed?

(d) If not fully absorbed, areas where this has not taken place, reasons therefor and future plans of action.

4. FOREIGN EXCHANGE EARNINGS AND OUTGO:

1. Activities relating to exports, Initiatives taken to Increase exports, development of export markets for products and services and export plans.

The exports of the Company increased by 15% in value over previous year inspite of difficult international trading conditions and severe global competition. Significant progress was made in shifting the business direction from grey sales to value added products such as high thread count made-ups and processed fabrics. Majority of this growth was generated from the U.S. Market. The Company participated in various International trade fairs to promote sales and establish new contracts.

2. Total foreign exchange used and earned. Rs. in crores

Total foreign exchange used 134.32

Total foreign exchange earnings 266.36

It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs.434 crores.

On behalf of the Board of Directors NUSLI N. WADIA Chairman Mumbai, 11th June, 2003


Mar 31, 2002

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2002.

1. FINANCIAL RESULTS:

For the year For the year ended 31st ended 31st March, 2002 March, 2001 Rupees Rupees in Crores in Crores

GROSS TURNOVER 932.04 1042.41

Profit before Interest & Depreciation & Voluntary Retirement Compensation 30.26 135.13

Interest 31.99 62.10

Profit before Depreciation and Voluntary Retirement Compensation (1.73) 73.03

Depreciation 43.65 47.83

Voluntary Retirement Compensation 5.30 7.07

PROFIT BEFORE TAX (50.68) 18.13

Less: Tax (net) - Deferred (Release) (21.62) -

PROFIT AFTER TAX (29.06) 18.13

Add: Balance in Profit and Loss Account of Previous Year 105.59 66.28

Add: Transferred from Investment Allowance Reserve 18.00 11.01

Add: Transferred from Debenture Redemption Reserve 4.21 56.40

SURPLUS AVAILABLE FOR APPROPRIATIONS 98.74 151.82

Appropriations to:

Proposed Dividend:

- Interim Dividend - -

- Final Dividend 7.83 8.20

Corporate Dividend Tax - 0.84

Investment Reserve (out of balance brought Forward in profit and Loss Account) - 35.00

General Reserve - 2.19

Balance carried to Balance Sheet 90.91 105.59

2. COMPANY RESULTS AND DIVIDEND:

In terms of financial performance, the year under review has been the most difficult year for the Company, with both its operating divisions reporting lower turnover and thin margins.

Margins in the Textile business were adversely affected due to sluggish market conditions both at home and abroad. The commodity segment of this business was particularly subjected to intense price pressures during the year. Oversupply situation in the DMT business continued almost throughout the year and the events of September 11, 2001 in US resulted in a drop of as much as 25% in the domestic prices of PTA/DMT in the third quarter of the year. Consequently, both the turnover and the margins of the DMT business were severely impacted by these factors.

The raw material markets for both the divisions - cotton for the textile business and paraxylene for the DMT business - showed considerable volatility and substantial drop in the prices of the raw materials for both the divisions towards the end of the year resulted in a write down of final product inventories. The write down further worsened the financial results.

While coping with adverse market situation, both the divisions simultaneously concentrated on cost control and cost containment. Substantial savings were achieved in the consumption of raw materials and energy as well as in plant fixed costs in the DMT division. The Companys overall pay-roll costs were also contained. The interest bill of the Company came down from Rs. 62.10 crores to Rs. 31.99 crores due to repayment of high cost loans, judicious mix of timing of raw material inventory purchases and access to low cost finance.

The current year for the DMT business has begun on a positive note and DMT prices in the first quarter of the current year have risen smartly. New initiatives taken pro-actively to improve the top line of the Textile business should start yielding results during the second half of the current year. The Company is, therefore, hopeful of turning out much better financial performance during the current year.

Having regard to the foregoing, despite reporting a loss for the year, your Directors recommend a Dividend of Rs. 2/- per Equity share of Rs. 10/- each for the year ended March 31, 2002 to be paid, if declared by the members at the Annual General Meeting to be held on August 13, 2002.

3. TEXTILE DIVISION

The Sales Turnover of the Division during the year ended March 31, 2002 was Rs. 480.86 crores, which was lower by 6.71% over last year.

Sluggish market conditions for the second year in succession led to a decline in the top line and with domestic raw material prices being higher than the international prices during the first three quarters of the year, margins of the Textile Business remained under extreme pressure. The benefit of the lower cotton prices started accruing in November and December, 2001, but also resulted in a substantial write down of inventories. The inventory write down has had a further adverse impact on the financial results of the Division.

International markets for cotton textiles reflected bearishness throughout the year. There were large inventory corrections in the U.S., the Companys major export market. Further, a decision taken to. allow higher quota access to fabrics made in Pakistan - one of the countrys major competitors in the overseas market - as also the suspension of basic duty on cloth and made-ups from that country resulted in a fall of textile exports to EEC. There is a strong possibility that EEC will re-introduce anti-dumping duties on imports of Cotton Bed Linen from India, which will have a serious impact on the Companys Exports.

Despite these problems, the Division was successful in making a major shift in exports towards higher value made-up business particularly in the US and currently carries a full order book for the next 3 months, in this segment. Consequently export realization in the US market has gone up by 45% on an average, over the previous year despite severe competition from China and Pakistan.

The domestic market for Cotton Textiles was subdued reflecting low consumer off take. Demand for home textiles, the Companys core group of products showed a drop of 30% last year leading to build up of inventory. However, the division has since taken strong initiatives to clear the backlog and new orders have been received. We are hopeful of restoring our business to healthy levels by the second half of the current year.

4. DMT DIVISION:

The turnover of the Division during the year was Rs. 398.43 crores as compared to Rs. 406.84 crores in the previous year despite a 7 percent increase in sale volume. DMT price realization showed a marginal improvement in the early part of the year but following upon the 11th September incident in the US, prices of Asian Polyester Intermediates viz., Paraxylene, DMT and PTA recorded a steep fall. As a result, domestic PTA/DMT prices dropped by as much as 25% in the third quarter of the year leading to a sharp write-down in the finished product inventory values severely impacting the Divisions performance.

The Division exercised considerable efforts during the year to minimize the adverse impact in the market by effecting cost reduction in ail areas. Compared to the previous year, there was significant reduction in consumption of raw materials and energy which, contributed close to Rs. 4 crores. A similar amount was saved in the fixed costs associated with manufacture of DMT.

The above achievement was with all round employee participation under the aegis of Total Quality Management being practised by the Division for last several years. Six Sigraa methodology for Problem Solving was introduced during the year and 15 teams were trained. Also, 12 Quality Circle teams were constituted for the workmen during the year and one of the teams bagged the First Prize in Maharashtra Circle and also received a Certificate of Appreciation at the National level, held at Hyderabad. Competency mapping, a new initiative, was carried out for all the employees of the Division during the year. Other continuing initiatives included Customer Relationship Management, Employee Satisfaction Survey and execution of several Environmental and Safety Management Projects. The Division is already certified for ISO 14000 (Environmental Standards) and OHSAS 18001 (Safety Standards). During the year, the Division was re-certified under the new ISO 9001:2000 Quality Standards.

As the year came to a close, the Asian market has entered a boom period for polyester and its raw materials which is expected to last well into the. next year, i. e. 2002-03. This should help the Division produce vastly improved financial results during the next year. The results would have been even better had the Government of India not effected an increase in the import duty on Paraxylene from 5% to 10% in the latest budget.

5. FINANCIAL RESTRUCTURING:

Pursuant to the approval by the shareholders at the Extraordinary General Meeting held on 24th April, 2002 and subsequent confirmation by the Bombay High Court by its Order dated 6th June, 2002, the Company has set off/ adjusted the following items against the Securities Premium Account:

Rs. Crores

Miscellaneous Expenditure 53.67

Capital and capital related items 26.69

Debts currently considered doubtful 20.53

Diminution in value of investments 13.93

Proposed voluntary separation payments 70.00

184.82

The set-off/adjustment will enable the Company to reflect better operational efficiency improvements in the future years. It is also expected to enhance shareholder value through improvement in future profitability and consequent increase in Earnings per Share and Return on Capital Employed.

6. BUY-BACK OF SHARES:

In terms of the Buy-Back Scheme approved by the shareholders at the last Annual General Meeting, the Company bought back and extinguished during the year, 18,26,554 equity shares at an average price of Rs. 40.70 per share.

Accordingly, the number of paid up equity shares as at 31st March, 2002 stands reduced to 3,91,75,275 from 4,10,01,829. The Buy-back Scheme remains valid until 22nd July, 2002.

7. TAXATION:

Tax assessments upto the assessment year 1999-2000 have now been completed. The Tax Department has raised a demand of Rs. 4.53 crores for the assessment year 1999-2000 against which the books of accounts carry a provision of Rs. 0.81 crores. The Company is contesting the demand in appeal and expects to succeed. Consequently, no further provision in the books of accounts is considered necessary. However, the disputed demand has been disclosed as a contingent liability.

8. SUBSIDIARY COMPANIES:

The accounts of the subsidiaries of the Company are annexed, as required under section 212 of the Companies Act 1956.

9. FIXED DEPOSITS:

The Company has suspended acceptance of fresh deposits and renewal of existing deposits from 18th March, 1999. Despite several reminders, deposits from 224 depositors aggregating Rs. 15.42 lacs have remained unclaimed as on 31st March, 2002.

10. DEBENTURES:

Funds raised from the issues of the various Debentures/ Secured Premium Notes have been utilised for the purpose for which they were raised. Non-Convertible Debentures/ Secured Premium Notes aggregating Rs. 8.41 crores were redeemed during the year.

11. LEASING BUSINESS:

No fresh leasing business was transacted during the year. The gross income earned during the year from outstanding leasing business amounted to Rs. 3.66 crores.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors; Rules, 1988 is given in the Annexure to this Report.

13. PERSONNEL:

220 employees who completed 25 years service and 20 employees who completed 40 years service with the Company during the year will be recipients of the Long Service Awards.

Employees of the Textile Division were paid Bonus as per the provisions of the Bonus Act. An additional 4.17% Ex-gratia payment was made to maintain harmonious industrial relations.

Ex-gratia payment to the employees of the DMT plant, covered by the payment of Bonus Act, was made as a gesture of goodwill and for maintaining cordial industrial relations.

14. INSURANCE:

All the properties including buildings, plant and machinery and stocks have been adequately insured.

15. DISPOSAL OF JAMNAGAR AND ROHA PLANTS:

Despite efforts, the Company has not been able to conclude the sale of the land at Jamnagar and Roha as also the building at Roha.

16. DIRECTORS:

Mr. S. S. Kelkar who served the Company in various positions for nearly 29 years retired as Executive Director with effect from 31st July, 2001. He was appointed as a Director from 1st August, 2001 subject to retirement by rotation in the casual vacancy so caused by his retirement as an Executive Director under Section 262 of the Companies Act, 1956 and Article 121 of the Articles of Association of the Company. The Board of Directors recorded its appreciation of the laudable services rendered by Mr. Kelkar and the significant contribution made by him to the Companys growth.

Mr. Ness N. Wadia and Mr. Ninu Khanna who were appointed as Additional Directors on 1st August, 2001 and 20th May, 2002 respectively hold office upto the date of the forthcoming Annual General Meeting under Section 260 of the Companies Act, 1956 and Article 117 of the Articles of Association. Notices have been received by the Company from some members under Section 257 of the Companies Act, proposing their appointment as Directors. Mr. Ness N. Wadia was also appointed as a Whole-time Director designated as Deputy Managing Director of the Company for a period of 5 years with effect from 1st August, 2001. Mr. Ninu Khanna was appointed as Managing Director for a period of 5 years with effect from 20th May, 2002 on the relinquishment of office by Mr. Adhiraj Sarin who resigned from the Board effective from close of business on 20th May, 2002.

Mr. P. Maiik ceased to be the Executive Director of the Company with effect from 30th November, 2001.

In accordance with the provisions of the Companies Act, 1956, and the Companys Articles of Association, Mr. R. A. Shah, Dr. H. N. Sethna and Mr. A. K. Hirjee retire by rotation and are eligible for re-appointment.

17. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 (hereinafter referred to as "the Act"), your Directors based on the representations from the Operating Management confirm that:-

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure;

(ii) they have in selection of the accounting policies consulted the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the 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 fraud and other irregularities;

(iv) they have prepared the Annual Accounts on a going concern basis.

18. CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement a separate report on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance are annexed to the Directors Report.

19. PARTICULARS OF EMPLOYEES:

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956, as amended, read with the Companies (Particulars of Employees) Rules, 1975, and forming part of the Directors Report for the year ended 31st March 2002 is given in the Annexure to this report.

20. AUDITORS:

Members are requested to appoint Messrs. A. F. Ferguson & Co. as Auditors at a remuneration to be fixed by the Board of Directors.

ANNEXURE TO THE DIRECTORS REPORT

Information under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors Report for the year ended 31st March, 2002

A. CONSERVATION OF ENERGY:

(a) Energy Conservation Measures taken

Some of the measures your Company had undertaken/continued to implement during the year under report in the high priority area of energy conservation are given below:-

Textile operations

- Effective and controlled operation of humidification and chilling plant.

- Establishment of energy conservation cell to monitor constantly energy consumption and continuously explore ways and means to reduce energy consumption.

- Controlling maximum demand and improvement of Power factor thereby saving cost of demand charges.

- Controlled working of Tube lights and switching them off wherever not in use.

C. I. I, recommended measures for energy saving which were implemented:

- Replacement of conventional nozzles in air washer plant with Automiser & thereby down sizing air washer pump to achieve power saving.

- Replacement of conventional starters of return air fans of humidification plant with VFD.

- Replacement of open type drier with energy efficient hermatically sealed units.

- Installation of stabiliser in lighting circuit.

DMT operations

- Power saving through installation of mechanical seals, flat belt in place of "V" belts, optimisation of pump capacities, optimising plant operations.

- Fuel saving by further optimised use of available steam and enhanced biogas generation from ETP.

- Energy bill reduction by installing P. F. improvement capacitors.

- Improvement projects for Environment Management Systems and Occupational Health and Safety Management System.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.

Nil

(c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods.

Optimisation and control of energy related costs help your Company to remain competitive in both domestic and international markets. There has been a saving of 12,12,534 lacs KWH of energy during the year in the Textile operations. Reduction in consumption of power and fuel during the year in DMT operations is equivalent to an energy saving of 158 KWH/T compared to the previous year.

B. TECHNOLOGY ABSORPTION:

Research and Development (R&D)

1. Specific areas in which R&D carried out by the Company

(a) New Product Development

(b) Modifying process route.

(c) Re-engineering of existing products.

(d) Substituting chemicals & dyes for cost economy.

(e) Working on Projects "To reduce processing damage in Export Qualities".

2. Benefits derived as a result of the above R&D

(a) Additional new business for the company.

(b) Cost reduction.

(c) Improvement in quality.

(d) Customer satisfaction.

(e) Improvement in packing performance.

3. Future plan of action

(a) Implementation of ISO 9001-2000 and TQM systems.

(b) To take-up projects for eliminating/controlling major causes of rejection in processed fabrics.

(c) Setting, up new production processes and improving upon the existing processes so as to meet continuously increasing marketing demands.

(d) New projects on cost reduction in the areas of Dyes and Chemicals.

(e) Development of new finishes to improve upon marketability of BDMC fabrics.

4. Expenditure on R&D

Expenditure on R&D during the year under report amounted to Rs. 0.29 crore.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology absorption, adaptation and innovation:

(a) Development and establishment of `Easy care finishes on different qualities for different international customers.

(b) Development and introduction of a new finish for Microdot Interlining fabrics for giving residual shrinkages less than 1% in the final product.

(c) Development of new locally manufactured binders for `Caledon dyeing replacing imported binders.

(d) Shortening of bleaching processes on J-BOX by modification of chemical recipes.

(e) Evaluation and thereafter introduction of economical dyes and chemicals for cost reduction.

(f) Optimisation of fabric constructions by fabric re-engineering to reduce costs and to meet customers quality requirements.

(g) Optimisation of stenter productions on the basis of evaporation ratios.

(h) Cost saving on power consumption through provision of HT & LT Capacitor Bank, variable drives, mechanical seals replacement and rationalisation of drives.

(i) Cost saving on fuel consumption through optimised use of steam at different pressures and biogas burning in boilers.

2. Benefits derived as a result of the above efforts:

(a) Meeting Customer needs and in turn helping marketing in getting increased business.

(b) Cost reduction in Dyes and Chemicals, including substitution of imported products.

(c) Optimum production on processing machines, especially stenters in Bleaching and Finishing Departments and thereby economy in production costs.

3. Information regarding technology imported during the last 5 years:

(a) Technology imported -

(b) Year of import -

(c) Has technology been fully absorbed? -

(d) If not fully absorbed, areas where this has not taken place, reasons therefor and future plans of action: None

4. FOREIGN EXCHANGE EARNINGS AND OUTGO:

1. Activities relating to exports, initiatives taken to increase exports, development of export markets for products and services and export plans.

The exports of the Company remained at the same level as in the previous year in view of difficult international trading conditions and severe global competition. However, significant progress was made in shifting the business direction from grey sales to value added products such as high thread count made-ups and processed fabircs with a growth of 60% in value. Majority of this growth was generated from the U.S. market. The Company participated in various international trade fairs to promote sales and establish new contracts.

2. Total foreign exchange used and earned.

Rs. in Crores

Total foreign exchange used 112.98

Total foreign exchange earnings 198.43

It may be relevant to observe here that the value of import substiution achieved through production of DMT is estimated at Rs. 395.03 crores.

On behalf of the Board of Directors

NUSLI N. WADIA Chairman Mumbai, 21st June, 2002.


Mar 31, 2001

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2001 :

1. FINANCIAL RESULTS :

For the year For the year ended 31st ended 31st March, 2001 March, 2000 Rupees Rupees in crores in crores

GROSS TURNOVER 1042.41 1048.71 Profit before Interest & Depreciation & Voluntary Retirement Compensation 135.13 164.67 Interest 62.10 66.44 Profit before Depreciation and Voluntary Retirement Compensation 73.03 98.23 Depreciation 47.83 48.46 Voluntary Retirement Compensation 7.07 5.18 PROFIT BEFORE TAX 18.13 44.59 Tax (net) 1.43 PROFIT AFTER TAX 18.13 43.76 Add: Balance in Profit and Loss Account of Previous Year (including Rs. 5.87 crores transferred on Amalgamation) 66.28 54.08 Add: Transferred from Investment Allowance Reserve 11.01 0.75 Add: Transferred from Debenture Redemption Reserve 56.40 5.46 SURPLUS AVAILABLE FOR APPROPRIATIONS 151.82 703.45 Appropriations to :

Proposed Dividend :

- Interim Dividend - 72.30

- Final Dividend 8.20 - Corporate Dividend Tax 0.84 7.35

Investment Reserve (out of balance brought forward in Profit and Loss Account) 35.00 25.00 General Reserve 2.19 4.39

Balance carried to Balance Sheet 105.59 60.47

2. COMPANY RESULTS AND DIVIDEND :

The operating divisions of the Company have passed through trying conditions during the year under review. Steep increases in the prices of cotton, a major raw material for the Textile Division as also in energy costs coupled with lower sales due to sluggish markets have eroded the profitability of the Division. The performance of the DMT Division on the other hand has suffered due to the continuing oversupply situation in the domestic DMT/PTA markets resulting in a drop in its turnover in value terms. These adverse conditions have sharply impacted the profits of the Company with non-operating income and income from sale of real estate being the main contributors to the year's results.

Having regard to the foregoing, your Directors recommend a dividend of Rs. 2/- per equity share of Rs. 10 each for the year ended 31st March, 2001 to be paid, if declared, by the members at the Annual General Meeting to be held on 23rd July, 2001.

3. TEXTILE DIVISION :

The sales turnover of the Division during the year ended 31st March, 2001 was Rs. 515.43 crores, which is lower by 3.7% over last year.

The performance of the Textile Division during the year under review has been severely affected by lack of top line growth due to sluggish markets, steep increases in the prices of cotton, its major raw material as also in energy costs.

Estimate of poor crop in India and strong demand globally resulted in bullishness in the cotton market. Consequently as the season progressed, domestic prices showed substantial escalation. International and domestic prices have softened since owing to lower purchases by China and recessionary trends in U.S.A. but the Division will have to contend with a 15% increase in cotton on a year to year basis.

International markets in EEC remained sluggish throughout the year. A weak Euro resulted in lower demand and led to falling prices of textiles in Europe. The US market remained steady in the first half of the year but turned sluggish in the second half impacting the high value processed made-up business. The international markets for textiles are yet to show signs of revival.

The worsening export demand has created surplus availability in the domestic market and consumer surveys predict that the consumers are expected to spend less on apparels/fabrics in 2001-2002.

The organised textile industry has been in the grip of crisis for several years now and the Government policy has so far favoured the decentralised sector at the expense of the mill industry. The most recent Budget has corrected these anomalies substantially.

The removal of quantitative restrictions and rationalisation of tariffs under the World Trade Organisation provide a great opportunity for countries like India to increase their exports but this is possible only provided India becomes a low cost producer of textiles.

The Government of Maharashtra has finally taken a bold decision and approved the much awaited textile policy which will help Mumbai based mills to relocate and become cost competitive as also generate funds for modernisation.

The Division has just completed a comprehensive qualitative and quantitative research of the domestic market to have a deeper understanding of the fast changing customer preferences and form appropriate strategies to meet them. An internationally known consultancy firm has been engaged to advise on the upgradation of the Bombay Dyeing brand and logo as also to improve the Bombay Dyeing shop signages and decor. Simultaneously, initiatives have also been taken in Business Process Re-engineering and Supply Chain Manage- ment which show high potential for cost optimisation.

4. DMT DIVISION :

The sale volume and turnover of the DMT Division were adversely affected due to a significant increase in the domestic supply of polyester raw materials. The turnover was Rs.406.84 crores compared to Rs. 411.11 crores in the previous year.

Apart from the high price of crude oil and its consequent impact on the price of paraxylene and fuel oil during the year, there was a sharp increase in the prices of Methanol, another raw material, due to a world-wide shortage. All these factors affected the performance of the Division notwithstanding the fact that a further reduction in the cost of conversion was achieved.

As was anticipated in the last year's report, oversupply position in the Polyester market as well as DMT/PTA market continued during the year under review. Improvement in the DMT business is linked to a 7 to 8% growth in the polyester industry, a reasonable prospect given the present situation. However, the reduction in import duty on DMT from 25% to 20% effected in the recent Government of India Budget will have some negative impact.

The Division obtained ISO-14001 Certification for its Environmental Management Systems as well as OHSAS 18001/Safetycert Certification of BVQI for its Occupational Health and Safety Systems during the year.

5. AMALGAMATION :

One of the wholly owned subsidiaries of the Company viz. Seal Investments Ltd. has in terms of a Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956, been merged into the Company consequent upon the jurisdictional High Court Order dated 20th April, 2001. The Scheme of Amalgamation became effective as of 1st October, 2000 being the appointed date in terms of the approved Scheme. Accordingly the operating results of Seal Investments Ltd. for six months from 1st October, 2000 to 31st March, 2001 and its assets/liabilities have been incorporated in the Accounts of the Company.

6. DEPOSITORY SYSTEM :

Electronic trading of the Company's Equity shares has been made compulsory by the Securities & Exchange Board of India (SEBI) from 29th November, 1999. As on 31st March, 2001 Equity shares representing 59% of the total Equity Share Capital have been dematerialised.

7. TAXATION :

On completion of assessment for the assessment year 1998-99, the tax department has raised a demand of Rs. 29 lacs. No provision for this tax liability has been made in the books of accounts as the Company is contesting this demand in appeal and expects to succeed. However, the disputed demand has been disclosed as a contingent liability.

8. SUBSIDIARY COMPANIES :

As required under Section 212 of the Companies Act, 1956, the accounts of the subsidiaries of the Company are annexed.

9. FIXED DEPOSITS :

The Company has suspended acceptance of fresh deposits and renewal of existing deposits from 1st March, 1999. Despite several reminders, deposits from 250 depositors aggregating Rs. 17.08 lacs have remained unclaimed as on 31st March, 2001.

10. DEBENTURES :

Funds raised from the issues of the various Debentures/ Secured Premium Notes have been utilised for the purpose for which they were raised. Non Convertible Debentures/ Secured Premium Notes aggregating Rs.157.67 crores were redeemed during the year.

11. LEASING BUSINESS :

Fresh leasing business worth Rs. 3.87 crores could be transacted during the year. Gross income earned during the year from outstanding leasing business amounted to Rs. 8.61 crores.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure to this Report.

13. PERSONNEL :

246 employees who completed 25 years service and 7 employees who completed 40 years service with the Company during the year were the recipients of the Long Service Awards.

Employees of the Textile Division were paid Bonus as per the provisions of the Bonus Act. An additional 5.67% Ex-gratia payment was made to maintain harmonious industrial relations.

Ex-gratia payment to the employees of the DMT plant, covered by the payment of Bonus Act, was made as a gesture of goodwill and for maintaining cordial industrial relations.

14. INSURANCE :

All the properties including buildings, plant and machinery and stocks have been adequately insured.

15. DISPOSAL OF JAMNAGAR AND ROHA PLANTS :

Permission has been granted by the State Government of Gujarat for closing down the operations of the Company's Jamnagar Spinning Unit and the operations of the said Unit have been closed down effective 29th July, 2000.

The Company had offered a Voluntary Retirement Scheme (VRS) in consultation with the Employees' Union at its Roha Processing Plant. Almost all the employees opted for separation under the VRS and the plant has ceased to operate.

Since, in spite of Company's best efforts, no worthwhile offer for purchase of the two plants as a going concern had been received, plant and machinery at both these plants have been disposed of. The Company is now concentrating its efforts on locating a buyer for the land at both these locations and the building at Roha.

16. DIRECTORS :

Mr. H, R. Thanawalla who was associated with the Company for over 57 years in various positions and later from 1985 as a Director of the Company, passed away on 18th December, 2000. During his long association with the Company, he made significant contributions to the Company's growth and prosperity. The Board has placed on record its deep sense of loss on the passing away of Mr. Thanawalla.

Mr. Anil K. Hirjee was appointed as a Director in the casual vacancy caused by the death of Mr. H. R. Thanawalla, pursuant to Section 262 of the Companies Act, 1956 and Article 121 of the Articles of Association of the Company.

In accordance with the provisions of the Companies Act, 1956, and the Company's Articles of Association, Mr. Venu Srinivasan, Mr. K. F. Rustamji, Mr. Nusli N. Wadia and Mr. Keshub Mahindra retire by rotation and are eligible for re-appointment.

17. DIRECTORS' RESPONSIBILITY STATEMENT :

Pursuant to Section 217(2AA) of the Companies Act, 1956 (hereinafter referred to as "the Act"), your Directors confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards had been followed;

(ii) they had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at 31st March, 2001 and of the profits of the Company for the year ended 31st March, 2001;

(iii) they had taken proper and sufficient care for the 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 fraud and other irregularities;

(iv) they had prepared the Annual Accounts on a going concern basis.

18. CORPORATE GOVERNANCE :

Your Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of Clause 49 newly added to the Listing Agreements with the Stock Exchanges, are complied with.

A separate report on Corporate Governance is being incorporated as a part of the Annual Report along with a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance which is annexed to the Directors' Report.

19. PARTICULARS OF EMPLOYEES :

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, and forming part of the Directors' Report for the year ended 31st March, 2001 is given in the Annexure to this report.

20. AUDITORS :

Members are requested to appoint Messrs. A. F. Ferguson & Co. as Auditors at a remuneration to be fixed by the Board of Directors.

On behalf of the Board of Directors

NUSLI N. WADIA Chairman Mumbai, 28th May, 2001.

Registered Office : Neville House, J. N. Heredia Marg, Ballard Estate, Mumbai-400 001.

Information under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Report for the year ended 31st March, 2001

A. CONSERVATION OF ENERGY :

(a) Energy Conservation Measures taken

Some of the measures your Company had undertaken/continued to implement during the year under report in the high priority area of energy conservation are given below :-

Textile operations

- Efficient use of lighting by avoiding wasteful installation, re-arranging lighting fixtures and using efficient chokes.

- Effective and controlled operation of humidification and chilling plants.

- Installation of FRP Fans for humidification plants leading to substantial energy saving.

- Establishment of energy conservation cell to monitor constantly energy consumption and continuously explore ways and means to reduce energy consumption.

- Installation of inverter drives for suction fans for Autoconer Dx Winding Machine thereby achieving energy savings.

- Control of maximum demand and improvement of power factor thereby saving cost of demand charges.

- Improvement of steam condensate recovery system by providing a new pressure power pump to efficiently pump back the condensate to Boiler House.

Tata Energy Research Institute (TERI) recommended measures for energy conservation which were implemented :

- Run under loaded motors in star mode instead of delta mode.

- Modification in the operation of chiller pumps, down sizing motors.

- Installation of inverters for motors, autodrain valves for air compressor receivers, energy efficient fixtures for tube lights, FRP fans.

- Replacement of 2 stage air compressor with 3 stage compressor.

- Installation of energy efficient spindles on ring frames.

- Insulation of steam lines sizing machine accessories & condensate lines, and water softening plant for boiler.

DMT operations

- Power saving through provision of variable frequency drives, mechanical seals replacement and rationalisation of drives.

- Fuel saving by optimised use of steam at different pressures.

- Total water management by reclaim, reuse etc.

- Improvement projects for Environment Management System and Occupational Health & Safety Management System.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.

Investments on projects implemented/under implementation aggregate to Rs. 5.77 crores.

(c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods.

Optimisation and control of energy related costs help your Company to remain competitive in both domestic and international markets.

There has been a saving of 2.67 lacs KWH of energy during the year in the Textile operations. Reduction in consumption of power and fuel during the year in DMT operations is equivalent to an energy saving of 205 KWH/T compared to the previous year.

(d) Total Energy Consumption and Energy Consumption per unit of production in prescribed Form A.

As per Form 'A' attached.

B. TECHNOLOGY ABSORPTION :

Research and Development (R&D)

1. Specific areas in which R&D carried out by the Company

(a) Product development.

(b) Improvement in existing production processes.

(c) Conservation of utilities.

(d) Studies on New Dyes/Chemicals/Auxilliaries which could be of benefit to the Company in terms of cost and quality.

(e) Re-engineering of existing products.

(f) Working on specific projects with the object of improving the "Packing Performance".

2. Benefits derived as a result of the above R&D

(a) Improved customer satisfaction.

(b) Overall quality improvement in Company's products.

(c) Reduction in production costs as well as rejections.

(d) Additional new business for the Company.

(e) Improvement in Packing Performance.

3. Future plan of action

(a) New projects on cost reduction and quality improvement in production departments.

(b) Development of new products to enhance marketability of Company's fabrics.

(c) Setting-up process / recipes for successful dyeing of polyester / cotton fabrics on CDR.

(d) Setting-up production processes for improving packing performance of dyed bottom weight fabrics.

(e) Preparation of Calibration Data for dyes on Computer Colour Matching System.

4. Expenditure on R&D

Expenditure on R&D during the year under report amounted to Rs. 0.16 crore.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology absorption, adaptation and innovation:

(a) Introduction of caledon SF dyes for dyeing of light shades on CDR by pad-dry-cure method.

(b) Development of "Teflon" as well as fibre-proof finish for a prestigious U.K. customer.

(c) Development of "Antipilling" finish for enhancing marketing potential of Company's qualities for export.

(d) Various measures in Production Departments to substantially improve the packing performances of Flannel qualities for export.

(e) Assisting Dyeing Department in establishing working of newly installed CDR.

(f) Conservation of water by optimization of processes and setting-up water recycling systems.

(g) Development of printed fabrics where the prints change colour with 'Temperature' i.e. Thermochronic prints.

(h) Establishment of processes for obtaining 'Semi-Durable' and 'Durable' Fire-retardent finishes.

(i) Development of antibacterial finishes for fabrics made for hospitals / hotels etc.

2. Benefits derived as a result of the above efforts:

(a) Enhanced marketability of fabrics for export and domestic markets.

(b) Quality improvement and in turn better packing performance.

(c) Economy in production costs.

(d) Timely completion of marketing orders.

3. Information regarding technology imported during the last 5 years :

(a) Technology imported

(b) Year of import

(c) Has technology been fully absorbed?

(d) If not fully absorbed, areas where this has not taken place, reasons therefor and future plans of action.

4. FOREIGN EXCHANGE EARNINGS AND OUTGO :

1. Activities relating to exports, initiatives taken to increase exports, development of export markets for products and services and export plans

The exports of the Company did not show any growth during the year in view of recessionary conditions in the international market especially USA and EEC. This has impacted the Company's grey sales. However, emphasis on high value made ups and processed fabrics continued and these efforts are showing encouraging response. The Company participated in various International Fairs to promote sales and establish new contacts.

2. Total foreign exchange used and earned

Rs. in crores Total foreign exchange used ......................... 158.12

Total foreign exchange earnings .................... 201.67

It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs. 423.08 crores.

On behalf of the Board of Directors NUSLI N. WADIA Chairman. Mumbai, 28th May, 2001.


Mar 31, 2000

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2000 :

FINANCIAL RESULTS :

For the year For the year ended 31st ended 31st March, 2000 March, 1999 Rupees Rupees in crores in crores

GROSS TURNOVER 1048.71 952.09

Profit before Interest Depreciation & Voluntary Retirement Compensation 164.67 145,11

Interest 64.44 71.35

Profit before Depreciation and Voluntary Retirement Compensation 98.23 73.76

Depreciation 48.46 49.00

Voluntary Retirement Compensation 5.18 3.72

PROFIT BEFORE TAX 44.59 21.04

Tax (net) 1.43 0.81

PROFIT AFTER TAX 43.16 20.23

Add : Balance in Profit and Loss Account of Previous Year 54.08 38.28

Add : Transferred from Investment Allowance Reserve 0.75 -

Add : Transferred from Debenture Redemption Reserve 5.46 12.22

SURPLUS AVAILABLE FOR APPROPRIATIONS 103.45 70.73

Appropriations to :

Proposed Dividend :

- Interim Dividend 12.30 -

- Final Dividend - 12.30

Corporate Dividend Tax 1.35 1.35

Investment Reserve out of balance brought forward in Profit and Loss Account) 25.00 -

General Reserve 4.39 3.00

Balance carried to Balance Sheet 60.41 54.08

COMPANY RESULTS AND DIVIDEND :

While the Textile business of the Company had to contend with recessionary conditions, both in overseas and domestic markets, the DMT business turned in a much improved financial performance on account of better price realisation and stricter cost control.

The Directors recommend that the interim dividend of Rs. 3/- declared in March, 2000 be treated as the final dividend or the year ended 31st March, 2000.

TEXTILE DIVISION :

The sales turnover of the Division during the year ended 31st March, 2000 was Rs. 535.38 crores, at the same level as last year.

A good cotton crop during 1998-99 season resulted in easy availability and steady to softer prices upto January, 2000. Cotton prices have thereafter gone up substantially. The prices of polyester staple fibre have also been markedly higher in the latter half of the year.

International market both in EEC and USA remained sluggish during the year. Low prices of American cotton resulted in continually falling fabric prices adversely and belended grey fabrics. Similarly, margins on the made-up business to countries of the European Union continued to be under pressure due to the antidumping duties levied on these products. Availability of quotas for high value made-ups to the U.S. also acted as a constraint on export growth.

The domestic markets for Textiles and Apparels have remained in a recessionary mode. Despite these pressures the Company has been able to achieve a modest 6% growth in domestic sales.

The Division has been able to effect further reduction in inventory through tighter inventory management. The consequent reduction in working capital has had a substantial favourable impact on its interest costs.

Restructuring and reengineering of business processes have resulted in further donwsizing of the work force and enabled the division to achieve a reduction in its manpower costs.

Unfortunately these improvements were neutralised by a substantial increase in utility costs. Containing the high utility costs will be a focus area for the operations management in future.

The Company has been awarded the SRTEPC and TEXPROCIL Gold Trophies for its outstanding export performance for polycotton blended fabrics and made-ups for the year 1998-99.

DMT DIVISIONS :

The sales turnover of the DMT Division was Rs. 411.11 crores compared to Rs. 325.40 crores in the previous year, representing an increase of about 26%.

During the year, crude oil prices nearly trebled resulting in a steep increase in raw material costs. However, this increase could be absorbed through higher DMT prices and significant cost savings in DMT manufacture particularly in consumption of raw material and energy.

Oversupply situation in the Polyester market as well as the DMT/PTA market which was prevalent throughout the year under review is expected to continue for at least another year. Consequently margins on the DMT business will remain under pressure for some time to come. the Management will endeavour to meet the challenge through further cost control.

The DMT plant had no lost-time accident or fire accident during the year. The plant completed 965 days without lost-time accident.

Preceding ISO 14001 certification, third party safety audit was carried out. Majority of the first priority recommendations emerging from risk analysis done by CLRI were also implemented.

DEPOSITORY SYSTEM :

Compulsory trading of the Company's Equity shares in Demat form has been made mandatory by the Securities & Exchange Board of India (SEBI) with effect from 29th November, 1999. As on 31st March, 2000 Equity shares representing approximately 46.50% of the Equity Share Capital were dematerialised.

TAXATION :

On completion of assessment for the assessment year 1997-98, the tax department has raised a demand of Rs. 38 lacs. No provision for this tax liability has been made in the books of accounts as the Company is contesting this demand in appeal and expects to succeed. However, the disputed demand has bene disclosed as a contingent liability.

SUBSIDIARY COMPANIES :

As required under Section 212 of the Companies Act, 1956, the accounts of the subsidiaries of the Company are annexed.

FIXED DEPOSITS :

The Company has suspended acceptance of fresh deposits and renewal of existing deposits from 1st March, 1999. Despite several reminders deposits from 363 depositors aggregating Rs. 25.98 backs have remained unclaimed as on 31st March, 2000.

DEBENTURES :

Funds raised from the issues of the various Debentures/Secured Premium Notes have been utilised for the purpose for which they were raised. 15%, Secured Redeemable Non-Convertible Debentures, aggregating Rs. 3 crores were repaid in June, 1999, ahead of the terminal maturity date, through the exercise of the prepayment option.

LEASING BUSINESS :

In view of the continued slackness in the economy during the year, fresh leasing business worth Rs. 14.43 lacs could only be transacted during the year. Gross income earned during the year from outstanding leasing business amounts to Rs. 7.76 crores.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure to this Report.

PERSONNEL :

229 employees who completed 25 years' service and 6 employees who completed 40 years' service with the Company during the year were the recipients of the Long Service Awards.

Employees of the Textile Division were paid Bonus as per the provisions of the Bonus Act. An additional 5.67% Ex-gratia payment was made to maintain harmonious industrial relations.

Ex-gratia payment to the employees of the DMT plant, covered by the Payment of @onus@ Act, was made as a gesture of goodwill and for maintaining cordial industrial relations.

INSURANCE :

All the properties including buildings, plant and machinery and stocks have been adequately insured.

DISPOSAL OF JAMNAGAR AND ROHA PLANTS :

Pursuant to the approval given by the shareholders at the, last year's Annual General Meeting, efforts were made for the disposal of the Jamnagar and Roha plants but to date, no worthwhile proposal has been received in this behalf.

DIRECTORS :

Mr. N. M. Wagle who was associated with the Company for over 46 years, initially as a Director from June, 1953 and then from April, 1977 as the Vice-Chairman, passed away on 25th January, 2000. During his long association with the Company, Mr. Wagle contributed greatly to the Company's growth and prosperity. The Board has placed on record its deep sense of loss on the passing away of Mr. Wagle.

Rear Adm. M. M. Chopra (Retd.), resigned from the Board with effect from 31st May, 2000.

Mr. Adhiraj Sarin was appointed as an Additional Director of the Company and its Managing Director for a period of five years from 1st March, 2000 by the Board of Directors. He was earlier Managing Director of Hind Lever Chemicals Ltd. He holds office up to the date of the forthcoming Annual General Meeting under Section 260 of the Companies Act, 1956, and Article 117 of the Articles of Association. Notice has been received by the Company from a member under Section 257 of the Companies Act, 1956, proposing his candidature for the office of Director.

Mr. P.V. Kuppuswamy who was re-appointed as a Whole-time Director designated of five years with effect from 29th August, 1999 was appointed as the Joint Managing Director with effect from 1st March, 2000.

Mr. S. S. Kelkar and Mr. P. Malik were re-appointed as Whole-time Directors designated as Executive Directors for a period of five years with effect from 29th August, 1999.

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. S. N. Desai, Mr. R. N. Tata, Mr. S. S. Kelkar and Mr. P. Malik retire by rotation and are eligible for re-appointment.

PARTICULARS OF EMPLOYEES :

Information in terms of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report being sent to all shareholders of the Company excluding the statement of particulars of employees. The statement of particulars of employees referred to hereinabove is being made available for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of the Annual General Meeting. Any shareholder interested in obtaining a copy of the said statement may write to the

INFORMATION TECHNOLOGY-Y2K PREPAREDNESS :

The task force from Operations, Engineering and IT set up by the Company in May, 1998, to assess and address the Y2K problem ensured that all Y2K related issues were satisfactorily addressed, and accomplished by October, 1999. The work put in by this dedicated group ensured smooth transition to the new millennium.

AUDITORS :

Members are requested to appoint Messrs. A. F. Ferguson & Co. as Auditors at a remuneration to be fixed by the Board of Directors.

A. CONSERVATION OF ENERGY :

(a) Energy Conservation Measures taken

Some of the measures the Company had undertaken/continued to implement during the year under report in the high priority area of energy conservation are given below :

Textile operations

- Optimum use of plant and machinery to ensure maximum productivity.

- Efficient use of compressed air.

- Efficient use of lighting by avoiding wasteful installation, re-arranging lighting fixtures and using efficient chokes.

- Control of maximum demand and improvement of power factor to save on demand charges.

- Effective and controlled operation of humidification and chilling plants.

- Installation of FRP Fans for humidification plants leading to substantial energy saving.

- Establishment of energy conservation cell to monitor constantly energy consumption and continuously explore ways and means to reduce energy consumption.

DMT operations

- Process plant operation was modified for reducing electricity, consumption.

- Variable frequency drives were installed for critical utility equipment to reduce electricity consumption.

- Improvements were made in steam and condensate distribution/usage/recovery.

- Improvement projects were implemented for Environmental Management. System for ISO 14001 Certification.

(b) Additional investments and proposals, if any being implemented for reduction of consumption of energy.

Nil

(c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods.

Optimisation and control of energy related costs, help the Company to remain competitive in both domestic and international markets.

While there has been a saving of 3.08 lacs KWH of energy during the year in the Textile operations, a reduction in specific consumption of power during the year in DMT operations is equivalent to a saving of 34.6 lacs KWH.

(d) Total Energy Consumption and Energy Consumption per unit of production in prescribed Form A.

As per Form `A' attached.

B. TECHNOLOGY ABSORPTION :

Research and Development (R&D)

1. Specific areas in which R & D carried out by the Company

(a) Product development.

(b) Improvement in existing production processes.

(c) Conservation of utilities.

(d) Introduction of new dyes/auxiliaries for cost economy and quality improvement.

(e) Process control auditing for consistent quality.

2. Benefits derived as a result of the above R & D

(a) Improved customer satisfaction.

(b) Adherence to international standards.

(c) Overall quality improvement in Company's products.

(d) Optimisation of process parameters.

(e) Reduction in production costs as Well as rejections.

3. Future plan of action

(a) Cost reduction by scrutinising, the existing production processes/recipes as well as by introduction of new products/processes.

(b) Shade library for major fabric categories manufactured, by the Company by the new CDR method of dyeing.

(c) Developing new finishes such as non-durable and durable `Fire Retardant' finish, `Stain Repellent' finish, `Anti bacterial' finish etc.

(d) Introduction of new dyes/dyeing methods for improved quality of dyes/dyeing methods for improved quality of dyed fabrics.

4. Expenditure on R & D

Expenditure on R&D during the Year under report amounted to Rs. 0.10 crore.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology absorption, adaptation and innovation

(a) Introduction of low twist in the weft yarn of cotton flannel fabric for obtaining extra soft finish.

(b) Reducing residual shrinkage in sheeting qualities for export market.

(c) Replacing imported HDPE powder for interlining with indigenous HDPE powder.

(d) Printing with `Glow Paste' for bedsheets and pillow cases.

(e) Terry Towels with Hydrophilic Acrylic' yarn in the pile.

(f) Development of cotton/Lycra, 100% Modal and Modal-cotton blended fabrics.

(g) Development of a new process to improve the strength in printed lungies.

(h) Process modification bleaching and finishing to improve the lower GSM problem in export cotton as well as polyester blended cotton sheetings.

2. Benefits derived as a result of the above efforts

(a) Improvement in `quality' of fabrics processed at the Mills.

(b) Enhancing the marketability of our fabrics in export and domestic markets.

(c) Better product realisation.

(d) Energy conservation.

(e) Economising on cost of production.

3. Information regarding technology imported during the last 5 years

(a) Technology imported

(b) Year of import

(c) Has technology been fully absorbed ?

(d) If not fully absorbed, areas where this has not taken place, reasons therefor and future plans of action.

4. FOREIGN EXCHANGE EARNINGS AND OUTGO :

1. Activities relating to exports, initiatives taken to increase exports, development of export markets for products and services and export plans

The exports of the Company increased in volume terms, despite recessionary conditions in the international markets for Textiles. Exports of high value made ups and processed fabrics to USA and EEC and branded made ups to Middle East have continued to be the thrust areas.

The Company participated in various International Fairs to promote sales and to attract new buyers.

2. Total foreign exchange used and earned

Rs. in crores

Total foreign exchange used 252.00

Total foreign exchange earnings 193.15

It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs. 366.42 crore


Mar 31, 1999

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 1999 :

FINANCIAL RESULTS :

For the year For the year ended 31st ended 31st March, 1999 March, 1998 Rupees Rupees in Crores in Crores

GROSS TURNOVER 952.09 1024.14

Profit before Interest & Depreciation and Voluntary Retirement Compensation 145.11 138.55

Interest 71.35 63.53

Profit before Depreciation and Voluntary Retirement Compensation 73.76 75.02

Depreciation 49.00 48.15

Voluntary Retirement Compensation 3.72 1.85

PROFIT BEFORE TAX 21.04 25.02

Tax (net) 0.81 2.00

PROFIT AFTER TAX 20.23 23.02

Add : Balance in Profit and Loss Account of Previous Year 38.28 54.34

Add : Transferred from Debenture Redemption Reserve 12.22 --

SURPLUS AVAILABLE FOR APPROPRIATIONS 70.73 77.36

Appropriations to :

Proposed Dividend 12.30 14.30

Corporate Dividend Tax 1.35 1.43

Debenture Redemption Reserve - 5.35

Investment Reserve - 15.00

General Reserve 3.00 3.00

Balance carried to Balance Sheet 54.08 38.28

COMPANY RESULTS AND DIVIDEND :

Prices and margins in both the DMT and Textile Divisions were under considerable pressure during the year under review. While low cost imports from South East Asia resulted in softer polyester intermediates prices in India adversely affecting the profitability of the DMT Division, the Textile Division suffered on account of higher prices of cotton, its major raw material, in the first nine months of the year and escalations in other infrastructure costs. Difficult market conditions for both the DMT and Textile businesses ruled out any significant price increases and show no signs of abatement.

Having regard to the foregoing, your Directors recommend a dividend of Rs. 3/- per equity share of Rs.10 each for the year ended 31st March 1999. The dividend will be paid, if approved by the members at the Annual General Meeting to be held on 23rd July, 1999.

TEXTILE DIVISION :

The sales turnover of the Division during the year ended 31st March, 1999 was Rs. 535.60 crores as against Rs. 527.84 crores in the previous year.

A lower than expected cotton crop during 1997-98 season resulted in reduced availability and firmer cotton prices. Cotton prices during a major portion of the year under review were substantially higher compared to the previous year. After remaining stable during the first three quarters, prices of Polyester Staple Fibre and Polyester Filament Yarn turned soft during the fourth quarter of the year.

Anti-dumping duties imposed by EEC countries on unbleached cotton fabrics from April 1998 adversely affected exports allowing other countries left out of the anti-dumping regime to increase their market shares. The position did not improve even after the anti-dumping duties were subsequently withdrawn. Anti-dumping duties on Made-ups imposed by EU continued during the year thus affecting our export business as well as margins. International prices of both cotton and polyester blended fabrics saw a free fall during the year with South East Asian countries suffering competitive devaluations and China closely following suit. In spite of the adverse situation, by concentrating on new markets and high value added products the Company was in a position to record a margin increase of 3% in exports.

The domestic markets for textiles and apparels experienced recessionary conditions. The Company continued its emphasis on developing new products and brands and two new brands "Princeton" and "Forest Hills" in Apparel were introduced during the year. More recently, "Tulip" and "Harmony" brands have been added to the Home Collection segment. Initial response to these new products has been encouraging.

The division has been able to achieve substantial inventory reduction through tighter management. The current inventory levels are the lowest the Company has carried during the past three to four years. The reduction in Working Capital has, apart from improving logistics, favourably impacted the interest costs of the division. Similarly an ongoing manpower review across the division has led to a reduction of 794 in number in the last two years. While this has resulted in higher VRS and gratuity payments, the benefits of manpower reduction will accrue to the division over the coming years.

The Company has been awarded the Texprocil Gold Trophy for its outstanding export performance for Made-ups for the year 1997-98.

The Association of the Warwick Manufacturing Group of the Warwick University continued during the year and resulted in pro-active steps being taken to improve product quality, elimination of waste, and rationalisation of operations. Human Resource Development through training and development activities also received close attention during the year. The benefits arising out of the business process re-engineering programme will be fully realised in the years to come.

DMT DIVISION :

The turnover of the Division was Rs. 325.40 crores compared to Rs. 378.8 crores in the previous year despite an increase in the production of DMT from 1,37,666 tonnes last year to 1,55,257 tonnes in the current year. Depressed conditions in the polyester chain, both in India and abroad, resulting in substantially lower prices compared to the previous year have contributed to the drop in the turnover.

Operationally, the DMT Plant performed well and achieved substantial cost savings, the major one through improvement in the fuel consumption ratios. Investment in a heavy fuel oil based captive power plant to secure further reduction in energy costs is under consideration.

The DMT plant received ISO 9002 Certification with systems in place incorporating "continuous improvement". An ISO 14000 Certification is planned in the coming year to consolidate the gains in safety and environmental area. Preceding this, a detailed HAZOP and Risk Analysis has been carried out.

Petrochemical markets have recently started looking up and once the oversupply situation corrects itself resulting in better end-product prices, the financial performance of the division is expected to show improvement.

DEPOSITORY SYSTEM :

The Company's Equity Shares have been inducted into the Depository System of the Central Depository Services (India) Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) as an eligible security under the Depositories Act, 1996. Facilities for dematerialisation of the Company's shares have already become fully operational. Members may, at their own option, avail of the facilities.

TAXATION :

On completion of assessment for the assessment year 1996-97, the Tax Department has determined a net demand of Rs. 2.85 crores. No provision for the tax liability has been made in the Books of Accounts in the relevant accounting year. The Company is contesting these demands in appeal and expects to succeed. Accordingly, the disputed demands have been disclosed as contingent liabilities. The Company has availed of the facility under Kar Vivad Samadhan Scheme-98 (KVSS) introduced in the Finance (No. 2) Act, 1998 in respect of disputed tax in the Income Tax Assessment Year 1991-92, as also in respect of disputed excise duty liability on the manufacture of yarn for captive consumption both of which were subject matters of prolonged litigation. A provision of Rs. 10.29 crores has been made during the year in respect of Income Tax liability of Assessment Year 1991-92 under KVSS and following an expert legal opinion an equivalent amount has been withdrawn from General Reserve to offset the provision as the liability pertains to an earlier year.

SUBSIDIARY COMPANIES :

As required under Section 212 of the Companies Act, 1956, the accounts of the subsidiaries of the Company are annexed.

FIXED DEPOSITS :

The Company has suspended acceptance of fresh deposits and renewal of existing deposits from 1st March, 1999. Deposits from 1,291 depositors aggregating to Rs. 95.92 lacs which had matured were outstanding with the Company as on 31st March, 1999 as the depositors had not claimed them despite reminders.

DEBENTURES :

Funds raised from the issues of the various Debentures/Secured Premium Notes have been utilised for the purpose for which they were raised. 15% Non-Convertible Debentures (1993 Series) aggregating Rs. 23.38 crores, were repaid in March, 1999, ahead of the terminal maturity date(s) through the exercise of the prepayment option.

LEASING BUSINESS :

In view of the continued slackness in the economy during the year, fresh leasing business worth Rs. 30.01 lacs could only be transacted during the year. Gross income earned during the year from outstanding leasing business amounts to Rs. 7.68 crores.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure to this Report.

PERSONNEL :

207 employees who completed 25 years' service and 21 employees who completed 40 years' service with the Company during the year were the recipients of the Long Services Awards.

Employees of the Textile Division were paid Bonus on the same basis as the last year. In addition, an additional 7.67% Ex-gratia payment was made on the same basis as the last year to maintain harmonious industrial relations.

Ex-gratia payment to the employees of the DMT Plant, covered by the Payment of Bonus Act, was made as a gesture of goodwill and for maintaining cordial industrial relations.

INSURANCE :

All the properties including buildings, plant and machinery and stocks have been adequately insured.

DIRECTORS :

Rear Admiral M. M. Chopra (Retd.) stepped down as an Executive Director with effect from the close of business on 30th September, 1998. The Directors have placed on record their appreciation of the services rendered by Rear Admiral Chopra (Retd.) during his tenure as Executive Director of the Company for over four years. In order that the Company could continue to have the benefit of his experience and advice, Rear Admiral Chopra was appointed as an Additional Director of the Company with effect from 1st October, 1998 pursuant to Section 260 of the Companies Act, 1956, and Article 117 of the Articles of Association of the Company. Rear Admiral Chopra, therefore, holds office up to the date of the forthcoming Annual General Meeting. Notice has been received by the Company from a Member under Section 257 of the Companies Act, 1956, proposing his candidature for the office of Director.

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr. N. M. Wagle, Mr. K. Mahindra, Mr. R. A. Shah, Dr. H. N. Sethna and Mr. H. R. Thanawalla retire by rotation and are eligible for reappointment.

PARTICULARS OF EMPLOYEES :

Information in terms of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all shareholders of the Company excluding the statement of particulars of employees. The statement of particulars of employees referred to hereinabove shall be made available for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of the Annual General Meeting. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.

INFORMATION TECHNOLOGY-Y2K PREPAREDNESS :

A core team from the Operations, Engineering and I.T. was set up in May 1998 to assess and address the Y2K problem.

The team covered areas in production, processing, office equipments, computer hardware and software which could be affected by Y2K. Testing/ confirmation was taken up to identify hardware/software that would need remediation. The progress on remediation is on schedule. The Company expects to be fully compliant in all areas by 30th September, 1999.

The total cost of remediation to the Company including replacement of non-compliant systems and hardware is estimated to be approximately Rs. 0.50 crore.

The Company is drawing up a contingency plan to ensure that disruption due to non-compliance by external agencies does not adversely affect its operations. The contingency plan is expected to be in place by 31st October, 1999.

AUDITORS :

Members are requested to appoint Messrs. A.F. Ferguson & Co. as Auditors at a remuneration to be fixed by the Board of Directors.

ANNEXURE 'A' TO THE DIRECTORS' REPORT

Additional information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

A. CONSERVATION OF ENERGY :

(a) Energy Conservation Measures taken

Some of the measures your Company had undertaken/continued to implement during the year under report in the high priority area of energy conservation are given below :

Textile operations

- Optimum use of plant and machinery to ensure maximum productivity.

- Efficient use of compressed air.

- Efficient use of lighting by avoiding wasteful installation, re- arranging lighting fixtures and using efficient chokes.

- Control of maximum demand and improvement of power factor, to save on demand charges.

- Effective and controlled operation of humidification and chilling plants.

- Installation of FRP Fans for humidification plants leading to substantial energy saving.

- Establishment of energy conservation cell to monitor constantly energy consumption and continuously explore ways and means to reduced energy consumption.

DMT operations

- Installation of modified steam distribution system for maximum usage of low pressure waste steam in Heat Exchangers, Jackets, etc., resulting in around 15% reduced consumption of fuel oil.

- Relocation of cooler at offgas expander outlet to reduce power consumption.

- Augmentation of PSA towers capacity to increase purity of nitrogen.

- Usage of aluminium blades in cooling tower fans, replacement of low efficiency pumps and introduction of similar other measures to secure energy saving.

- Purchase of power from Hanil Era with marginally lower price entailing no additional investment by the Company coupled with reduction in contracted maximum demand from MSEB.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.

Installation of a captive power plant based on heavy fuel oil firing is under consideration.

(c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods.

Optimisation and control of energy related costs help your Company to remain competitive in both domestic and international markets.

While there has been a saving of 14.80 lacs KWH of energy during the year in the Textile operations, a reduction in specific consumption of power during the year in DMT operations is equivalent to a saving of 69.83 lacs KWH.

(d) Total Energy Consumption and Energy Consumption per unit of production in prescribed Form A.

As per Form 'A' attached.

B. TECHNOLOGY ABSORPTION :

Research and Development (R&D)

1. Specific areas in which R&D carried out by the Company

(a) 'Product' development (i.e. new finishes, new styles of prints etc.).

(b) Improvement in existing products and production processes.

(c) Introduction of new dyes/chemicals for cost economy and/or quality improvement.

(d) Conservation of utilities such as fuel and water.

2. Benefits derived as a result of the above R&D

(a) Improved marketability of the Company's products.

(b) Reduction in production costs.

(c) Improved customer satisfaction.

3. Future plan of action

(a) Setting up procedures for obtaining excellent quality of finished products after commissioning of proposed new modern production equipment at the Mills.

(b) Development of new finishes like 'Wrinkle Free', 'Stain Release', Antibacterial and Dustmite, Fire Retardant etc. for enhancing the marketing potential of the Company's fabrics.

(c) Audit of 'process-control' measures set up in Production Departments to ensure 'consistency' in the quality of fabric made by the Company.

4. Expenditure on R&D

Expenditure on R&D during the year under report amounted to Rs. 0.17 crore.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology absorption, adaptation and innovation

(a) Setting up a 'two stage' process for satisfactory bleaching of Drill qualities for dyeing.

(b) Introduction of 'Enzyme' Desizing process prior to bleaching for satisfactory 'quality' of dyeing of flannels for export.

(c) Modification in finishing recipes for avoiding 'tendering' problems in sulphur black dyed fabrics.

(d) Introduction of 'Biopolishing with Enzymes' for polyester/cotton sheetings to overcome the 'pilling' problem.

(e) Introduction of 'perfume' finish for sheeting for the first time in the country.

(f) Modifications on Singeing Machine to obtain better cloth appearance after processing.

(g) Setting up finishing recipes for feather proof fabrics for securing A.P. values as per customers' requirements.

(h) Modification in finishing recipes to overcome higher shrinkage problems in Interlining fabrics.

2. Benefits derived as a result of the above efforts

(a) Improvement in 'quality' of cloth processed at the Mills.

(b) Better marketability of finished products.

(c) Reduced customer complaints.

(d) Guaranteed performance norms and reduced consumption of process material and energy achieved.

3. Information regarding technology imported during the last 5 years

(a) Technology imported Messrs. Glitsch Inc., U.S.A.

(b) Year of import 1995.

(c) Has technology been Absorbed fully. fully absorbed?

(d) If not fully absorbed, -- areas where this has not taken place, reasons therefor and future plans of action.

4. FOREIGN EXCHANGE EARNINGS AND OUTGO :

1. Activities relating to exports, initiatives taken to increase exports, development of export markets for products and services and export plans

The exports of the Company improved during the year marginally as compared to the previous year despite anti-dumping duties imposed on bedlinen and unbleached cotton fabrics by European Community. Emphasis on exports of high value added made-ups and fabrics to non-quota countries as well as USA, Middle East and South America continued.

The Company participated in the International Trade Fairs/Delegations to understand ever changing needs of the buyers and to attract new customers.

2. Total foreign exchange used and earned

Rs. in Crores

Total foreign exchange used 195.27

Total foreign exchange earnings 200.22

It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs. 302.64 crores.


Mar 31, 1998

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 1998:

1. FINANCIAL RESULTS: For the year For the year ended 31st ended 31st March,1998 March, 1997 Rupees Rupees in crores in crores

GROSS TURNOVER 1024.14 1133.49 Profit before Interest & Depreciation 136.70 164.79

Add : Write back of provision for premium on SPNs for earlier years - 21.92

Interest 63.53 103.76 Profit before Depreciation 73.17 82.95 Depreciation 48.15 47.25 PROFIT BEFORE TAX 25.02 35.70 Tax 2.00 - PROFIT AFTER TAX 23.02 35.70 Add : Transferred from Investment Allowance Reserve - 0.50 23.02 36.20

Add:

Balance in Profit and Loss Account of Previous Year 54.34 70.10 SURPLUS AVAILABLE FOR APPROPRIATIONS 77.36 106.30 Appropriations to: Proposed Dividend 14.30 13.88 Tax on distributed profits at 10% on the proposed dividend 1.43 1.39 Debenture Redemption Reserve 5.35 16.69 Investment Reserve 15.00 - General Reserve 3.00 20.00 Balance carried to Balance Sheet 38.28 54.34

2. COMPANY RESULTS AND DIVIDEND :

Though the Textile Division has performed better in the year under review, the Company's DMT business passed through extremely difficult trading conditions caused by severe dumping of PTA from South East Asia. This situation was further aggravated due to loss of production resulting from a fire in the DMT Plant in August, 1997.

Your Directors recommend a dividend of Rs. 3.50 per Equity Share of Rs. 10 each for the year ended 31st March 1998. The dividend will be paid, if approved by the members at the Annual General Meeting to be held on 3rd August 1998. Equity Shares allotted on exercise of right attached to Detachable Warrants will qualify for proportionate dividend from the respective dates.

3. TEXTILE DIVISION:

The sales turnover of the Division during the year ended 31st March 1998 was Rs. 527.84 crores as against Rs. 548.45 crores in the previous year. Despite a lower turnover, the Division has produced encouraging results. Lower raw material prices, improved availability of Modvat credits, better product mix, higher price realisations and softer interest rates have contributed to this improved performance.

The cotton crop during the 1996-97 season was good and cotton was available at reasonable prices throughout the season. The prices of Polyester Staple Fibre and Filament Yarn also remained soft throughout the year on account of oversupply. There has, however, been a substantial escalation in the raw material prices in 1997-98 cotton season. It will be the endeavour of the Textile Division to offset the effect of higher raw material costs through improvements in the product mix.

Anti-dumping duties on made-ups imposed by the European Union during the year adversely affected exports of made-ups which is one of the Company's major strengths.

Anti-dumping duties were also imposed on unbleached cotton fabrics from April 1998. These restrictive practices by the developed world are affecting our export growth. Consequently while exports in the year under review are marginally lower at Rs. 197.29 crores, the Company expects to improve its export performance during the current year by market diversification and concentration on high value products.

The domestic market for textiles experienced recessionary conditions but despite this, the Company continued its emphasis on developing new products and brands. Three new brands for Home Collection were introduced and the response to these marketing initiatives has been good. More brands are expected to be introduced shortly.

The Company was awarded the Texprocil Gold Trophy for its outstanding export performance in Made-ups and the Bronze Trophy for the outstanding export performance in the Fabric category for the year 1996-97.

The association of Warwick Manufacturing Group of Warwick University, U.K. with the Company in the reformulisation of business strategies and introduction of modern management systems resulted in the initiation of 80 projects covering areas of manufacturing processes, cost reduction, wastage elimination, quality improvement and on time delivery. Special emphasis was also placed on the development of human resources to realise their full potential through the introduction of training and development activities for the improvement of skills, knowledge and attitudes. These are ongoing projects and benefits from them will be fully realised in the years to come.

4. DMT DIVISION:

The turnover of the Division was Rs. 378.80 crores compared to Rs. 441.21 crores in the previous year. The volume of DMT produced was 1,37,666 tonnes as against 1,43,586 tonnes produced during the previous year. The drop in the production of DMT was on account of a fire which took place in the plant in August 1997, resulting in the loss of production for 7 weeks. While the Plant ran to its full capacity in the second half of the year, low cost supply of PTA, an alternative raw material to DMT, continued throughout the year from countries in South East Asia.

By a Notification dated 28th April 1998, Finance Ministry has imposed final anti-dumping duty for supplies from South Korea, Thailand and Indonesia but the threat of more imports from these as well as other countries remains in view of substantial oversupply in South East Asia coupled with lower prices following currency depreciation.

The DMT Division took pro-active steps to improve the plant performance in many areas of its operations. These initiatives have helped it counter, to an extent, the adverse situation arising out of lower availability of DMT for sale and low priced overseas competition.

Customs duty changes announced in the Union Budget, 1998 in respect of DMT/PTA/ Paraxylene have, on the whole, been marginally favourable.

5. SHARE CAPITAL:

The Share Capital of the Company has gone up from Rs. 40.39 crores as at 31st March, 1997 to Rs. 41.00 crores as at 31st March, 1998 consequent upon the exercise of the conversion rights attached to Equity Warrants issued on a rights basis to shareholders/promoters.

6. DEPOSITORY SYSTEM :

Requisite facilities for dematerialisation of the Company's shares in accordance with the provisions of the Depositories Act, 1996, are fully operational and members are free to avail of such facilities at their option.

7. TAXATION :

On completion of assessment for the assessment year 1995-96, the Tax Department has determined a liability of Rs. 5.96 crores. On completion of TDS assessment for the assessment year 1994-95, the Tax Department has determined a liability of Rs. 5.05 crores (inclusive of interest of Rs. 1.99 crores). No provisions for these liabilities were made in the Books of Account in the relevant accounting years. The Company is contesting these demands in appeal and expects to succeed. Accordingly, the disputed demands have been disclosed as Contingent Liabilities.

8. SUBSIDIARY COMPANIES:

As required under Section 212 of the Companies Act, 1956, the accounts of the subsidiaries of the Company are annexed. Megapode Airlines Ltd. has ceased to be a subsidiary of the Company.

9. FIXED DEPOSITS:

Deposits from 692 depositors aggregating to Rs. 51.38 lacs which had matured were outstanding with the Company as on 31st March, 1998 as the depositors had not claimed them despite reminders.

10. DEBENTURES:

Funds raised from the issues of the various Debentures/Secured Premium Notes have been utilised for the purpose for which they were raised.

11. LEASING BUSINESS:

In view of the slackness in the economy during the year, fresh leasing business worth Rs. 10.43 lacs could only be transacted during the year. Gross Income earned during the year from outstanding leasing business amounts to Rs. 7.63 crores.

12. CONSERVATION OF ENERGY, TECH NO. LOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure to this Report.

Additional information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

A. CONSERVATION OF ENERGY:

(a) Energy Conservation Measures taken

Some of the measures your Company had undertaken/continued to implement during the year under report in the high priority area of energy conservation are given below:

Textile operations

- Optimum utilisation of plant and machinery with regular maintenance and overhauling for maximum productivity.

- Efficient use of compressed air to maximise energy saving.

- Effective use of lighting by avoidance of wasteful installation, re-arrangement of lighting fixture and use of efficient chokes.

- Control of maximum demand and improvement of power factor, to save on demand charges.

- Effective and controlled operation of humidification and chilling plants.

- Installation of FRP Fans for humidification plants to secure energy saving.

- Establishment of energy conservation cell to monitor constantly energy consumption and continuously explore ways and means to reduced energy consumption.

DMT operations

- Use of low pressure waste steam in place of high pressure steam for sparging into process resulting in an annual saving of Rs. 87.45 lacs in terms of lower LSHS consumption.

- Installation of Variable Frequency Drive for ID fan of IJT boiler to reduce power consumption leading to a saving of Rs. 15.92 lacs per annum.

- Replacement of obsolete reciprocating Air Compressors by high efficiency centrifugal Air Compressor.

- Change of motors of agitators and mixers running on low load from delta to star connection resulting in a saving of Rs. 1.94 lacs per annum.

- Replacement of oversized potable water pump motor by one of appropriate size leading to an annual saving of Rs. 0.35 lac.

- Replacement of 160 W MLL lamps by 125W HPMV lamps resulting in an annual saving of Rs. 0.20 lac.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy. - Use of low pressure waste steam in place of high pressure steam in methanol preheater for esterifier. - Installation of additional off gas heater using low pressure waste steam to reduce steam consumption in existing off gas heater. - Replacement of pumps by higher efficiency pumps. - Replacement of 160W MML lamps by 125W HPMV lamps.

(c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods.

Optimisation and control of energy related costs help your Company to remain competitive in both domestic and international markets.

There has been a saving of over 9.37 lacs units of energy during the year in the Textile operations alone.

(d) Total Energy Consumption and Energy Consumption per unit of production in prescribed Form A.

As per Form 'A' attached.

B. TECHNOLOGY ABSORPTION:

Research and Development (R&D)

1. Specific areas in which R&D carried out by the Company

(a) Development of new textile finishes for export, workwear and industrial use.

(b) Development of new processes or modification of existing processes to improve product quality and reduce cost of production.

(c) Application of TAGUCHI experimental technique to optimise process parameters.

(d) Conservation of energy and fuel consumption.

2. Benefits derived as a result of the above R&D

(a) Expansion of the Company's customer profile.

(b) Improvement in product quality.

(c) Reduction in product cost.

(d) Improved customer satisfaction.

(e) Optimisation of process parameters.

(f) Achievement of maximum realisation.

3. Future plan of action

Development of new products and continuous processes and improvement in quality and reduction in quality related cost in existing products and processes.

4. Expenditure on R&D

Expenditure on R&D activities during the reporting year amounted to Rs. 0.18 crore.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology absorption, adaptation and innovation

(a) Technology absorption of oxidative bleaching, easycare finish and soft feather proof finish.

(b) Adaptation of continuous open width bleaching and foam finish.

(c) Development of innovative cationic prints, 'Tencel' fabric and 'Teflon' finish.

(d) Establishment of DMT plant capacity at 1,65,000 MTPA.

2. Benefits derived as a result of the above efforts

(a) Reduction of specific consumptions of raw materials/utilities and energy.

(b) Introduction of new finishes and products in export and domestic markets.

(c) Reduction of production cost.

(d) Improved quality and defect-free production.

3. Information regarding technology imported during the last 5 years (a) Technology imported Messrs. GTC Corporation, U.S.A. (b) Year of import 1995. (c) Has technology been Absorbed fully. fully absorbed?

(d) If not fully absorbed, - areas where this has not taken place, reasons therefor and future plans of action.

4. FOREIGN EXCHANGE EARNINGS AND OUTGO:

1. Activities relating to exports, initiatives taken to increase exports, development of export markets for products and services and export plans

There has been a slight setback to the Company's exports during the year mainly due to anti dumping duties imposed on bedlinen by European Community. Additional focus has now been placed on to the non-quota markets as well as North American market for higher value added items to counter the impact on sales to countries in the European Union.

Upgrading of product mix especially in the fine/super fine counts made-up's continued. The Company participated in the International Trade Fairs to maintain its interaction with the existing buyers and to attract new customers.

2. Total foreign exchange used and earned

Rs. in crores Total foreign exchange used 206.58 Total foreign exchange earnings 212.92

It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs. 284.30 crores.


Mar 31, 1997

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 1997:

FINANCIAL RESULTS

For the year For the year ended 31st ended 31st March, 1997 March, 1997 Rupees Rupees in Crores in Crores

GROSS TURNOVER 1133.49 1492.56 Profit before Interest & Depreciation 164.79 272.21 Add: Write back of provision for premium on SPN's for earlier years 21.92 -- Interest 103.76 110.25 Profit before Depreciation 82.95 161.96 Depreciation 47.25 44.86 PROFIT BEFORE TAX 35.70 117.10 Tax - - PROFIT AFTER TAX 35.70 117.10 Add: Transferred from investment Allowance Reserve 0.50 - 36.20 117.10 Add: Balance in profit and Loss Account of Previous Year 70.10 25.36 SURPLUS AVAILABLE FOR APPROPRIATIONS 106.30 142.46 Appropriations to: Proposed Dividend 13.88 21.61 Tax on distributed profits at 10% on the Proposed dividend 1.39 - Transferred to Debenture Redemption Reserve 16.69 20.75 Transferred to General Reserve 20.00 30.00 Balance carried to Balance Sheet 54.34 70.10 2. MR. NEVILLE N. WADIA CHAIRMAN EMERITUS:

Mr. Neville N. Wadia Chairman Emeritus passed away on 31st July, 1996. His association with the Company spanned a period of 63 years from 1933 to 1996. He headed the Company as Chairman from 1952 to 1977 and his contribution to the Company's growth and prosperity during his long tenure as Chairman is too well known to bear repetition. The wise counsel he generously provided as Chairman Emeritus will be sorely missed.

The Directors have placed on record their deep sense of sorrow on the passing away of Mr. Neville N. Wadia. The Company intends to create an Education Fund for scholarship to be given to the children of the Company's workers and employees in the memory of Mr. Neville N. Wadia.

3. COMPANY RESULTS AND DIVIDEND:

The year under review has been a difficult year due to unusual conditions prevailing in the market. Escalating costs in the textile industry, lack of liquidity in the distribution channels coupled with high interest cost eroded the profitability of the Textile Division. The DMT Division of the Company witnessed unprecedented and unfair competition from overseas resulting in a 50% drop in terms of value despite a growth in volume terms. This was caused by severe and indiscriminate dumping by overseas manufacturers and while your Company made every effort to persuade Government to impose antidumping duties, action has been delayed. These two factors have resulted in a sharp reduction in the profits for the year.

Your Directors recognise that these are indeed extraordinary circumstances and recommend a dividend of Rs. 3.50 per Equity Share of Rs.10 each for the year ended 31st March, 1997 to be paid, if approved by the members at the Annual General Meeting to be held on 4th September, 1997. Equity Shares allotted on exercise of rights attached to Detachable Warrants will qualify for proportionate dividend from the respective dates of allotment.

In view of the declining interest rates in the market and the expectations from the recently presented Central Government Budget, your Directors hope that conditions during the year will improve substantially in line with the expected rate of economic growth set by the Government at 7%.

4. TEXTILE DIVISION:

The sales turnover of the Division during the year ended 31st March, 1997 was Rs. 548.38 crores as against Rs. 530.72 crores for the previous year.

The profitability of the Textile Division has been under pressure in the recent past due to sharply escalating costs coupled with price resistance both in the domestic and international markets.

A good cotton crop in 1995-96 season resulted in easier availability and lower prices. The prices of Polyester Staple Fibre and Filament also remained soft throughout the year on account of oversupply situation internationally and in India. The benefit of lower raw material prices was more than offset by substantial increases in the cost of power, water and fuel. The expected increase in the administered prices of petroleum products will lead to further cost escalation.

The response to these challenging circumstances will be fundamental. The Warwick Manufacturing Group of the University of Warwick in the U.K. have been engaged to apply their expertise to develop;a clear and focussed strategy and assist in the implementation of the programme of fundamental change required to deliver that strategy. A strategy for the domestic market has been developed based on leveraging the latent strengths of the Retail Distribution System to capitalise on the strength of the Bombay Dyeing brand name and the opportunities created by a rapidly changing consumer textiles market. The export strategy is to capitalise on the existing and growing volume of sales in world markets by focusing on higher value added products and expanding markets. The programme of change will accelerate the current rate of progress in product quality, on time delivery and productivity whilst bringing a new focus on product development and domestic and export marketing. The improvements required to achieve internationally competitive standards in all aspects of the Company's operations will require the application of state of art management techniques and practice.

The Company's exports have grown from Rs. 173.85 crores last year to Rs. 208.16 crores - an increase of 20%. The recent unilateral decision of the European Union to impose an antidumping duty on made-ups will have an adverse impact on future exports to that region.

The Company was awarded the Texprocil Gold Trophy for outstanding export performance in made-ups and the Silver Trophy for outstanding export performance in fabrics for the years 1994-95 and 1995-96. The Company was also given an award for excellence in exports of polyester/cotton blended fabrics for the years 1994-95 and 1995-96 by the Synthetic Er Rayon Textiles Export Promotion Council.

lSO-9002 Certification was awarded to Textile Mills and Spring Mills for grey fabrics.

5. DMT DIVISION:

The DMT Division ran to its full capacity in the second half of the year. The DMT Division's volume grew from 1,34,540 tonnes to 1,43,586 tonnes despite a 6-weeks shutdown in the first half of the year.

The turnover in value terms, however, dropped from Rs. 858.54 crores to Rs. 441.21 crores primarily on account of substantial reductions in international prices of DMT/PTA. The Company faced severe dumping of PTA during the year from Far East producers as overcapacities led to an oversupply position. The Company has applied in September, 1996 to the Government to invoke an antidumping duty. The Government notified this as a fit case for investigation in January, 1997 and a final decision is still awaited.

The Company has been able to operate and sell its full capacity during the second half of the year. International prices have somewhat improved from the record lows but margins still continue to be under pressure.

During the year several cost reduction initiatives were taken up to sustain competitiveness and thereby to improve the Division's operations and these measures are expected to yield results during the current year. Total Quality Management (TOM) based activities have also progressed during the year to improve the customer base and profitability of the business.

6. SHARE CAPITAL:

The Share Capital of the Company has gone up from Rs. 38.57 crores as of 31st March, 1996 to Rs. 40.39 crores as at 31st March, 1997 consequent upon the exercise of the conversion rights attached to Equity Warrants issued on a rights basis to shareholders and to GDR Warrants by the holders thereof. The Board of the Company gave extension of time upto 31st March, 1997 to those holders of Second Warrants who failed to exercise their rights within the time specified for this purpose as a gesture of goodwill. Allotment of shares against valid applications received during such extended period has been made in April 1997.

7. DEMATERIALISATION OF SHARES:

The Company's Equity Shares have been inducted into the Depository System of the National Securities Depository Ltd. (NSDL) as an eligible security under the Depositories Act, 1996 and have been available for trading on the National Stock Exchange from 28th May, 1997. Sharepro Services have been acting as the interface with NSDL for handling the depository related operations.

8. TAXATION:

On completion of assessment for the Assessment Year 1994-95, the Tax Department has determined a liability of Rs. 2.59 crores for which no provision was made in the Books of Account in the relevant accounting year. The Company is contesting this demand in appeal and expects to succeed. Accordingly, the disputed demand has been disclosed as a Contingent Liability.

9. SUBSIDIARY COMPANIES:

As required under Section 212 of the Companies Act, 1956, the accounts of the subsidiaries of the Company are annexed.

10. INVESTMENT IN JOINT VENTURE COMPANY:

The Company had invested a sum of Rs. 159.46 lacs in the Equity shares of P.T. Five Star Industries Ltd., Indonesia (PTFS). In view of the non-viability of the operations of PTFS and its accumulated losses, full provision was made for the diminution of value in this investment the Company's 1989-90 accounts.

A Memorandum of Understanding executed between PTFS and its consortium of Bankers which was substantially implemented during the year, has resulted in a major reduction in PTFS' loan liabilities. The Company has received from PTFS Technical Know-how fees due for 1996.

With PTFS achieving financial viability in its current operations, the Company feels its investment in the shares of PTFS should be restored to its original value and the provision made for the diminution in the 1989-90 accounts has accordingly been written back in the current year's accounts.

11. FIXED DEPOSITS:

Deposits from 802 depositors aggregating to Rs. 57.42 lacs which had matured were outstanding with the Company as on 31st March, 1997 as the depositors had not claimed them despite reminders.

12. DEBENTURES:

Funds raised from the issues of the various Debentures/Secured Premium Notes have been utilised for the purpose for which they were raised.

13. LEASING BUSINESS:

The Company had made an entry in the business of leasing last year. In view of the difficult condition in the money market, fresh leasing business worth Rs. 19.50 lacs could only be transacted during the year. Gross Income earned during the year from outstanding leasing business amounts to Rs. 7.58 crores.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure to this Report.

15. INSURANCE:

All the properties including buildings, plant and machinery and stocks have been adequately insured.

16. DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Dr. H. N. Sethna, Mr. H. R. Thanawalla, Mr. S. N. Desai, Mr. R. N. Tata and Mr. S. S. Kelkar retire by rotation and are eligible for reappointment.

Additional information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

A. CONSERVATION OF ENERGY:

(a) Energy Conservation Measures taken

Some of the measures your Company had undertaken/continued to implement during the year under report in the high priority area of energy conservation are given below:

Textile operations

- Optimum utilisation of machines with regular maintenance and overhauling, for maximum productivity.

- Strict control on electric power consumption with special "cells" for securing energy saving.

- Efficient generation of compressed air and its efficient use to maximise energy saving.

- Elimination of wasteful illumination and use of low wattage fluorescent tubes.

- Use of clean-o-dyne oil emulsifier for boilers to reduce fuel oil consumption.

- Judicious operation of waste collection, humidification and chilling plants.

- Efficient generation of steam and its efficient utilisation, monitoring steam pressure on machines and controlling steam leakages.

- Use of flat belt instead of "V" belt.

- Use of FRP fans instead of metal impeller for the high powered ventilation fans.

- Conversion of 15 H.P. motors into 10 H.P. ones by rewinding, resulting in intake of lower ampere.

DMT operations

- Replacement of capacitor bank, thereby improving power factor from 0.93 to 0.97 resulting in net saving of Rs. 6.75 lacs per annum.

- Replacement of insulation of Therminol - 66 supply and return headers, to reduce heat losses, leading to net saving of Rs. 7.27 lacs per annum.

- Connection of motors of pelleters and agitator of pure slurry tank in star instead of delta resulting in net saving of Rs. 0.34 lac per annum.

- Installation of variable frequency drive for motors.

- Deenergisation of surplus high power mercury vapour lamps in Packout, resulting in net saving of Rs. 0.44 lac per annum.

- Specific process changes leading to net saving of Rs. 56 lacs per annum.

- Optimisation of process parameters to minimise energy consumption.

- Continuous monitoring and action on steam traps for maximising condensate recovery and minimising the consumption of steam and fuel.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.

- Replacement of high wattage MLL lamps by lower wattage HPMV lamps.

- Installation of variable frequency drive for IJT Boiler ID fan motor

(c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods.

Optimisation and control of energy related costs help your Company to remain competitive in both domestic and international markets.

(d) Total Energy Consumption and Energy Consumption per unit of production in prescribed Form A.

As per Form 'A' attached.

B. TECHNOLOGY ABSORPTION:

Research and Development (R&D)

1. Specific areas in which R&D carried out by the Company

(a) Development of new textile finishes for export and domestic markets.

(b) Development in fabric bleaching.

(c) Production in waste of material energy and fuel consumption.

2. Benefits derived as a result of the above R & D

(a) Reduction in losses arising from quality problems.

(b) Improved customer satisfaction.

(c) Reduction in product cost.

(d) Achievement of best realisation.

3. Future plan of action

Developments of new products and continuous processes and improvement in quality and reduction in quality related cost in existing products and processes.

4. Expenditure on R&D

Expenditure on R&D activities during the reporting year amounted to Rs. 0.13 crore.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1.Efforts in brief, made towards technology absorption, adaptation and innovation

(a) The DMT Plant capacity has been established at 1,65,000 TPA.

(b) Process modification in dyeing blue shade in Japara sorts.

(c) Process modification in finishing of polywool suitings.

(d) Technology absorption of oxidative bleaching process.

(e) Development of innovative cationic prints.

(f) Adaptation of 25% uster norms in yarn quality for all OE spun cotton yarn.

(g) Evaluation of card autolevellers to reduce variability in sliver and yarn.

2. Benefits derived as a result of the above efforts

(a) DMT plant capacity has been increased and specific consumptions of raw materials/utilities and energy have been reduced.

(b) Better quality and improved packing of export products.

(c) Introduction of new products in export and domestic markets.

(d) Sustained and efficient operation of the plant.

(e) Lower cost of production in respect of some of the products.

3. Information regarding technology imported during the last 5 years

(a) Technology imported Messrs. Glitsch Inc., U.S.A. (b) Year of import 1995. (c) Has technology been Absorbed fully. fully absorbed ? (d) If not fully absorbed, areas where this has not taken place, reasons therefor and future plans of action.

4. FOREIGN EXCHANGE EARNINGS AND OUTGO:

1. Activities relating to exports, initiatives taken to increase exports, development of export markets for products and services and export plans

Despite severe competition and difficult market conditions, your Company has been able to increase its exports by 20% both in quota and non-quota countries. Special focus was to be on promotion of products in non-quota markets in the Far East and South America.

Upgradation of product mix and introduction of new qualities in workwear drills and fine/ superfine made-up counts continued as in the past. The Company participated in the International Trade Fairs and Exhibitions to maintain its interaction with the existing buyers and to attract new customers.

2. Total foreign exchange used and earned Rs. in crores Total foreign exchange used 219.55 Total foreign exchange earnings 217.05

It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs. 294.89 crores.


Mar 31, 1996

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 1996:

1. FINANCIAL RESULTS : For the year For the year ended 31st ended 31st March, 1996 March, 1995 Rupees Rupees in crores in crores

GROSS TURNOVER 1492.56 1119.26 Profit before Interest & Depreciation 272.21 231.82 Interest 110.25 79.44 ------- ------- Profit before Depreciation 161.96 152.38 Depreciation 44.86 37.54 ------- ------- PROFIT BEFORE TAX 117.10 114.84 Tax - 16.75 PROFIT AFTER TAX 117.10 98.09 Add : Transferred from Investment Allowance Reserve - 1.47 -------- ------- 117.10 99.56 Add: Balance in Profit and Loss Account of Previous Year 25.36 24.96 ------- -------- SURPLUS AVAILABLE FOR APPROPRIATIONS 142.46 124.52

Appropriations to :

Proposed Dividend (Subject to Tax) 21.61 18.96 Transferred to Debenture Redemption Reserve 20.75 20.20 Transferred to General Reserve 30.00 60.00 Balance carried to Balance Sheet 70.10 25.36

2. SHARE CAPITAL :

The Share Capital of the Company has gone up from Rs. 33.12 crores as at 31st March, 1995 to Rs. 38.57 crores as at 31st March, 1996 and to Rs. 38.60 crores as on the date of this Report, consequent upon the exercise of the conversion rights attached to the Equity Warrants issued on a rights basis to shareholders and to GDR Warrants by the holders thereof and by the Promoters under the preferential issue made in terms of the approval given by the shareholders at the Annual General Meeting held on 1st August, 1994.

3. AMENDMENT TO THE OBJECTS CLAUSE:

The Company Law Board has confirmed, vide its Order dated 17th April, 1996, the amendment to the Objects Clause of the Memorandum of Association of the Company as approved by the shareholders in terms of the Special Resolution passed at the Annual General Meeting held on 21st July, 1995.

4. RELOCATION OF THE SHARE DEPARTMENT :

The Company's Share Department has already commenced its operation from its new location at the Administrative Office at the Company's Textile Mill Complex at Pandurang Budhkar Marg, Mumbai-400025. (Telephones: 4313849/50).

5. DIVIDEND:

Your Directors recommend a dividend of Rs. 5.50 per Equity Share of Rs. 10 each for the year ended 31st March, 1996 subject to deduction of tax at appropriate rates, to be paid, if approved by the members at the Annual General Meeting to be held on 10th July, 1996. Equity Shares allotted on exercise of rights attached to First and Second Detachable Warrants and to the Equity Warrants issued by the Promoters will qualify for proportionate dividend from the respective dates of allotment.

6. ACCOUNTS:

The method of providing depreciation for the year and the rates adopted for the computation thereof (which are in conformity with amended Schedule XIV of the Companies Act, 1956) are set out in item 2 to Schedule 15 to the Accounts.

The basis of providing depreciation in respect, of extra shift working of the Company's Textile Plant and Machinery from 1982-83 to 1985-87 has been explained in Note (3) Schedule 16 to the Accounts.

7. TAXATION:

On completion of assessment for the Assessment Year 1993-94, the tax department has determined a liability of Rs. 5.96 crores of which liability to the extent of Rs. 1.49 crores was already provided for in the Books of Accounts in the relevant accounting year. The Company is contesting the additional demand of Rs. 4.47 crores in appeal and expects to succeed. Accordingly, no provision has been made in the Books of Accounts in this behalf but the disputed demand has been disclosed as a contingent liability.

8. SUBSIDIARY COMPANIES:

As required under Section 212 of the Companies Act 1956, the accounts of the subsidiaries of the Company are annexed.

9. FIXED DEPOSITS:

Deposits from 1,401 depositors aggregating to Rs.90.49 lacs which had matured were outstanding with the Company as on 31st March, 1996 as the depositors had not claimed them despite reminders.

10. DEBENTURES:

Funds raised from the issues of the various Debentures/Secured Premium Notes have been utilised for the purpose for which they were raised.

11. LEASING BUSINESS:

Pursuant to the Resolution passed in terms of Section 149(2-A) of the Companies Act, 1956 at the Annual General Meeting held on 21st July, 1995 the Company commenced the business of leasing and a lease transaction of Rs. 46.75 crores has been put through during the year.

The Company limited its attention to the power sector in which the shareholders had authorised extension of the Objects Clause of the Memorandum of Association for diversification of its business.

The Company has been proceeding with a due sense of care and caution in this activity having regard to the risks inherent in this business.

12. TEXTILE DIVISION :

The sales turnover of the Division during the year ended 31st March, 1996 was Rs. 530.72 crores against Rs.478.20 crores for the previous year - an increase of 11%.

Cotton prices in the first six months of the year remained extraordinarily high. The new crop of the 1995-96 season was higher than the previous season leading to reduction in prices. Prices of polyester fibre and filament have also fallen sharply during the second half of the year on account of an over-supply situation. The fall in the raw material prices will have a favourable impact on the results of the Textile Division during the current year.

The competition in the international textile markets has become severe as supplies are now available from units set up in Middle and Far East as well as Africa which produce better quality at lower costs. The Company, however, expects to cope with the adverse situation given its long established presence in the international textile markets and the raw material price advantage now being available to it.

A technological and operational audit of our manufacturing and processing houses was carried out by an internationally well known firm of textiles consultants and their recommendations are in the process of implementation.

The capital expenditure during the year was Rs. 28 crores and was mainly in spinning and weaving preparatory and also in fabric finishing.

13. DMT DIVISION :

The sales turnover of the Division during the year was Rs. 858.54 crores as compared to Rs. 588.56 crores in the previous year. The 46% growth in the turnover was mainly due to a substantial increase in the Company's DMT production from 113,773 tonnes to 134,540 tonnes as also due to higher DMT prices prevailing particularly in the first half of the year.

The capacity of the DMT plant was raised from 120,000 tonnes to 145,000 tonnes during the year and with further debottlenecking the plant now has the capacity to produce at the rate of 165,000 tonnes per annum. The capacity increase has been achieved at a low capital cost per installed tonne. In addition the plant operations have benefited from the reduction in raw material consumption and achieved global standards in energy consumption levels. The near boom conditions experienced in the earlier part of the year in the petro-chemical industry disappeared with the withdrawal of China from the fibre and filament markets resulting in a steep drop in the international prices of all their raw materials including DMT and paraxylene. Indian fibre and filament manufacturers have also had to reduce prices substantially on account of the changes in the international demand supply situation and the liquidity crisis which also contributed to the poor offtake of their products. This in turn resulted in lower offtake for DMT and DMT prices have fallen in line with the current international prices. Consequently the margins of the Division are currently under pressure. However, with the international DMT prices expected to level out and the benefits of the lower paraxylene prices accruing to the Division, the pressure on the margins is expected to ease in the coming months.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure to this Report.

ANNEXURE 'A' TO THE DIRECTORS' REPORT

Additional information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

A. CONSERVATION OF ENERGY:

(a) Energy Conservation Measures taken

Some of the measures your Company had undertaken/continued to implement during the year under report in the high priority area of energy conservation are given below:

Textile operations

- Optimum utilisation of machines with regular maintenance and overhauling.

- Strict control on electric power consumption with special "cells" for securing energy saving.

- Efficient use of compressed air to obtain maximum energy saving.

- Use of clean-o-dyne oil emulsifier for boilers to reduce fuel oil consumption.

- Steam condensation recovery from sizing machines, monitoring steam pressure on machines and controlling steam leakages.

- Use of flat belt instead of "V" belt.

- Optimising illumination in the plant.

- Usage of electronic bellast in tube fixtures.

- Computerised monitoring of humidification plant.

- Running induction and variable speed motors at optimum efficiency.

- Use of 100% synthetic spindler tapes in spinning.

- Reduction of pneumatic pressure at compressor outlet.

DMT operations

- Replacement of air cooled methanol condensers by water cooled condensers, thereby reducing power consumption by 130 kwh.

- Installation of energy efficient vacuum jets for residue still/stripper.

- Installation of variable frequency drive for motors.

- Better upkeep of installation thereby minimising energy losses to atmosphere.

- Continuous monitoring and action on steam traps for maximising condensate recovery and minimising the consumption of steam and fuel.

- Replacement of high wattage HPMV lamps in Workshop and Compressor House by low wattage HPSV lamps as also high voltage conventional filament lamps by low voltage LED lamps.

- Replacement of aluminium blades of C.T. fans by FRP blades.

- Optimisation of process parameters to minimise energy consumption.

- Change of electrical winding connections of motors from delta to star connections.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.

- Replacement of high wattage MLL lamps by lower wattage HPMV lamps.

- A more efficient compressed air generation system.

(c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods.

Optimisation and control of energy related costs help your Company to remain competitive in both domestic and international markets.

(d) Total Energy Consumption and Energy Consumption per unit of production in prescribed Form A.

As per Form 'A' attached.

B. TECHNOLOGY ABSORPTION:

Research and Development (R&D)

1. Specific areas in which R&D carried out by the Company

(a) Development of featherproof finishes for export in 50s and 60s plain and satin dot and stripe designs.

(b) Development of new process or modifications of existing processes to improve product quality and reduce cost of production.

(c) Development of Silicon emulsion for featherproof finish to reduce cost of finishing.

(d) Development of flame retardant finish to meet various overseas market requirements.

(e) Evaluation of different sizing chemicals and their formulations for better performance in weaving.

2. Benefits derived as a result of the above R&D

(a) Improved customer satisfaction was obtained due to improvement in product quality.

(b) Improved market opportunity.

(c) Improved market share in various range of products.

(d) Reduced cost of quality of products.

3. Future plan of action

Developments of new products and continuous processes and improvement in quality and reduction in quality related cost in existing products and processes.

4. Expenditure on R&D

Expenditure on R&D activities during the reporting year amounted to Rs.0.15 crore.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief, made towards technology absorption, adaptation and innovation

(a) The DMT Plant now has a capacity of 1,65,000 TPA arising from commissioning of an additional Esterifier using technology from Messrs. Giltsch Inc., U.S.A.

(b) Development of featherproof finishes for export market in 50s and 60s count.

(c) Adaptation of developed silicon emulsions in featherproof sorts.

(d) Technology absorption in fire retardant finishes.

(e) Adaptation of different sizing chemicals for better performance in weaving.

3. Benefits derived as a result of the above efforts.

(a) DMT plant capacity has been increased and specific consumptions, raw materials/utilities and energy have been reduced.

(b) New products were introduced in export and local market.

(c) Better quality and improved packing of export products.

(d) Lower cost of production in respect of some of the products.

3. Information regarding technology imported during the last 5 years.

(a) Technology imported : Messrs. Glitsch Inc., U.S.A. (b) Year of import : 1995 (c) Has technology been fully absorbed? Absorbed fully. (d) If not fully absorbed, areas where this has not taken place, reasons therefor and future plans of action: - N A.

4. FOREIGN EXCHANGE EARNINGS AND OUTGO :

1. Activities relating to exports, initiatives taken to increase exports, development of export markets for products and services and export plans.

The international market conditions remained difficult during the year and despite this, your Company has been able to increase its exports by 6 1/2% both in the quota and non-quota countries.

Change in the product mix and introduction of new qualities in workwear drills and fine/superfine made-up counts helped us achieve the above growth. The Company participated in International Trade Fairs and Exhibitions to maintain its interaction with the existing and to attract new clients.

2. Total foreign exchange used and earned Rs. in crores Total foreign exchange used 424.23 Total foreign exchange earnings 177.43

It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs.556.12 crores.


Mar 31, 1995

SHARE CAPITAL:

The Share Capital of the Company has gone up from Rs.32.43 crores as at 31st March 1994 to Rs.32.52 crores as at 31st March 1995, consequent upon the exercise of rights by the Warrantholders who had not exercised such rights before the due date determined for the purpose but were, as a gesture of goodwill, allowed to do soup to the 30th September 1994, in respect of the First Detachable Equity Warrants issued along with Non-Convertible Debentures (NCDs)/Secured Premium Notes (SPNs) offered on a rights basis to the shareholders. A further increase in Share Capital by Rs.0.60 crore to Rs.33.12 crores has resulted from the exercise of the right by the promoters in respect of Warrants issued to them along with NCDs on a preferential basis in terms of the approval given by the shareholders at the Extraordinary General Meeting held on 21st October 1993.

As on the date of this Report, the Share Capital of the Company stands at Rs.36.97 crores consequent upon the exercise of rights related to the Second Detachable Equity Warrants issued along with the NCDs/SPNs offered on a rights basis to the shareholders, the exercise of rights related to GDR Warrants as also Equity Warrants issued to the promoters, in terms of the approval given by the shareholders at the Annual General Meeting held on 1st August 1994.

DIVIDEND:

Your Directors recommend a dividend of Rs.5.50 per Equity Share of Rs.10 each for the year ended 31st March, 1995 subject to deduction of tax at appropriate rates, to be paid, if approved by the members at the Annual General Meeting to be held on 21st July 1995. Equity Shares allotted on exercise of rights attached to First Detachable Warrants will qualify for proportionate dividend from the respective dates of allotment.

ACCOUNTS:

The method of providing depreciation for the year and the rates adopted for the computation thereof (which are in conformity with amended Schedule XIV of the Companies Act, 1956) are set out in item 2 to Schedule 15 to the Accounts. The basis of providing depreciation in respect of extra shift working of the Company's Textile Plant and Machinery from 1982-83 to 1985-87 has been explained in Note (3) Schedule 16 to the Accounts.

TAXATION:

On completion of assessment for the Assessment Year 1992-93, the tax department has determined a liability of Rs. 16.31 crores of which liability to the extent of Rs.14.00 crores was already provided for in the Books of Accounts in the relevant accounting year. The Company is contesting the additional demand of Rs.2.31 crores in appeal and expects to succeed. Accordingly, no provision has been made in the Books of Accounts in this behalf but the disputed demand has been disclosed as a contingent liability.

SUBSIDIARY COMPANIES:

As required under section 212 of the Companies Act, 1956, the accounts of the subsidiaries of the Company are annexed.

FIXED DEPOSITS:

Deposits from 629 depositors aggregating to Rs.43.20 lacs which had matured were outstanding with the Company as on 31st March, 1995 as the depositors had not claimed them.

DEBENTURES:

Funds raised from the issues of the various Debentures 1 Secured Premium Notes have been utilised for the purpose for which they were raised.

TEXTILE DIVISION:

The sales turnover of the Division during the year ended 31st March, 1995 was Rs.478.20 crores against Rs.400.18 crores for the previous year, showing an increase of just under 20%.

A lower than expected cotton crop, continued high demand for cotton and speculative pressures kept the cotton prices at very high levels throughout the 1994-95 season. Cotton prices at the peak arrival season in November, 1994 were higher by about 80% over corresponding period of the previous year. International prices of cotton also registered all rime highs due to lower crop in China and Pakistan. Polyester prices rose by over 50% on account of raw material shortages. Consequently the Company's margins in both domestic and export markets remained under considerable pressure.

Despite the difficult market situation, exports of the Company have gone up by 19% from Rs.138.92 crores to Rs.165.25 crores. Exports are expected to cross the Rs.200-crore mark in the current year. The advantage that the country has had in terms of low raw material prices has virtually disappeared and achievement of internationalisation of the other costs is a pre-requisite to maintain the tempo of exports. To this end, a technological audit of the Company's manufacturing and processing facilities was carried out by an internationally well-known consulting organisation and their recommendations are under study/implementation.

The Company's commitment to modernisation continues though its Textile Division is passing through an adverse situation and is reflected in the capital additions of approximately Rs.74 crores to the textile plant and machinery. The major additions are mainly in the spinning and processing areas.

DMT DIVISION:

The sales turnover of the Division during the year ended 31st March, 1995 was Rs.588.56 crores against Rs.169.16 crores in the previous year. The figures are, however, not comparable as the DMT plant was shut down for an extended period of time for capacity expansion purposes, during the previous year.

There was a turnaround in the petrochemical industry worldwide resulting in substantially higher demand for various petrochemical products. The demand for polyester improved because of shortage of cotton in the Asian region. A substantial increase in the Company's DMT production from 43,969 tonnes to 1,13,773 tonnes as also better DMT prices consequent upon higher demand have contributed to the increased turnover.

Import duties on DMT and paraxylene were reduced from 60% and 30% to 35% and 10% respectively in the 1995 Budget. The Company is dependent on imported paraxylene and the increase in the price of paraxylene from U.S. $ 450 p.t. in early 1994 to approximately U.S. $ 1750 p.t. has meant that, despite the import duty reduction in the 1995 Budget, the feedstock costs to the DMT plant have remained high.

The demand for DMT is strong and will remain so in the immediate future. The Company is currently examining further proposals to boost production and reduce cost.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure to this Report.

PERSONNEL:

232 employees who completed 25 years service and 15 employees who completed 40 years service with the Company during the year were the recipients of the long services awards. Employees of the Textile Division were paid bonus on the same basis as the last year. In addition, however, an additional 7.67% ex-gratia payment was made as against 7.17% last year to maintain harmonious industrial relations. Ex-gratia payment to the employees of the DMT plant, covered by the payment of Bonus Act, was made as a gestue of goodwill and for maintaining cordial industrial relations.

INSURANCE:

All the properties including buildings, plant and machinery and stocks have been adequately insured.

DIRECTORS:

Mr.S. S. Kelkar, Mr. P. V. Kuppuswamy, Rear Admiral M.M. Chopra (Retd.) and Mr. P. Malik who were appointed as Additional Directors of the Company by the Board of Directors on 29th August 1994, hold office up to the date of the forthcoming Annual General Meeting under Section 260 of the Companies Act, 1956, and Article 117 of the Articles of Association. Notices have been received by the Company from some members under Section 257 of the Companies Act, 1956, proposing their candidature for the office of Directors.

Mr. Venu Srinivasan, a distinguished industrialist, was appointed as an Additional Director of the Company by the Board of Directors on 25th November 1994. He holds office up to the date of the forthcoming Annual General Meeting in terms of Section 260 of the Companies Act, 1956, and Article 117 of the Company's Articles of Association. Notice has been received by the Company from a member under Section 257 of the Companies Act, proposing his candidature for the office of Director.

Pursuant to the provisions of Section 269 of the Companies Act, 1956, the Board of Directors have appointed Mr. 5.5. Kelkar, Mr.P.V. Kuppuswamy, Rear Admiral M.M.Chopra (Retd.) all Senior Executives of the Company, as Whole-time Directors designated as Executive Directors for a period of five years with effect from 29th August 1994. Mr. P. Malik was appointed on the Board as a Whole-time Director designated as Executive Director for a period of five years on the same date.

In accordance with the provisions of the Companies Act, 1956, and the Company's Articles of Association, Mr. H. R. Thanawalla, Mr.S. N. Desai and Mr. R. N. Tata retire by rotation and are eligible for reappointment.

PARTICULARS OF EMPLOYEES:

Information in accordance with sub-section (2A) of Section 217 of the Companies Act, 1956, as amended, read with the Companies (Particulars of Employees) Rules, 1975, and forming part of the Directors' Report for the year ended 31st March, 1995 is given in the Annexure to this Report.

ANNEXURE 'A' TO THE DIRECTORS' REPORT

Additional information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

A. CONSERVATION OF ENERGY:

(a) Energy Conservation Measures taken

Some of the measures your Company had undertaken/continued to implement during the year under report in the high priority area of energy conservation are given below:

Textile operations

- Optimum utilisation of machines with regular maintenance and overhauling.

- Strict control on electric power consumption with special "cells" for securing energy saving.

- Efficient use of compressed air to obtain maximum energy saving.

- Use of clean-o-dyne oil emulsifier for boilers to reduce fuel oil consumption.

- Steam condensation recovery from sizing machines, monitoring steam pressure on machines and controlling steam leakages.

- Use of flat belt instead of "V" belt.

- Optimising illumination in the plant.

- Usage of electronic bellast in tube fixtures.

- Computerised monitoring of humidification plant.

- Running induction and variable speed motors at optimum efficiency.

- Use of 100% synthetic spindler tapes in spinning.

- Reduction of pneumatic pressure at compressor outlet.

DMT operations

- Replacement of high wattage high pressure mercury vapour lamps by lower wattage high pressure sodium vapour lamps is under implementation, in phased manner.

- Elimination of idle running of equipments.

- Proper maintenance of insulation to minimise heat losses.

- Optimisation of process parameters to minimise energy consumption.

- Continuous monitoring and action on steam traps for maximising condensate recovery and minimising the consumption of steam and fuel.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.

- Variable frequency drive for C.E. Boiler - I F.D. Fan.

- Replacement of 3.3 KV Capacitor Bank for power factor improvement.

(c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods.

Optimisation and control of energy related costs help your Company to remain competitive in both domestic and international markets.

(d) Total Energy Consumption and Energy Consumption per unit of production in prescribed Form A. As per Form 'A' attached.

B. TECHNOLOGY ABSORPTION:

Research and Development (R&D)

1. Specific areas in which R&D carried out by the Company

(a) Development of new textile finishes for export, workwear drills and industrial use.

(b) Development of new process or modification of existing processes to improve product quality and reduce cost of production.

(c) Reduction in waste of material and energy and fuel consumption.

2. Benefits derived as a result of the above R&D

(a) Losses due to quality problems were reduced.

(b) Improved customer satisfaction facilitated by improvement in product quality.

(c) Exacting quality specifications in industrial and export market were met.

(d) Cost reduction and better price realisation.

3. Future plan of action

Developments of new products and continuous processes and improvement in quality and reduction in quality related cost in existing products and processes.

4. Expenditure on R & D

Expenditure on R&D activities during the reporting year amounted to Rs.0.07 crore.

Technology absorption, adaptation and innovation

1. Efforts in brief, made towards technology absorption, adaptation and innovation

(a) Development of polyester/cotton decatising wrapper, nylon computer ribbon and a range of fabrics woven from blend and fine cotton yarn spun on O.E. system.

(b) Development of new soft finishes for ferry towels.

(c) Development of new finishes for Eco-friendly textiles.

(d) Technology to avoid bowing in the fabric.

(e) Adaptation of Autolevellers in carding, comber and draw frames for reduction in yarn count variation.

(f) Capacity of DMT Plant has been increased from 1,20,000 TPA to 1,45,000 TPA in steps using technology from Messrs. Glitch Inc. U.S.A.

2. Benefits derived as a result of the above efforts

(a) New products were introduced in export and local markets.

(b) Better quality and improved packing of export products.

(c) Lower cost of production in respect of some of the products.

(d) The DMT Plant capacity was increased and reduction in specific consumptions of utilities and energy achieved.

3. Information regarding technology imported during the last 5 years

(a) Technology imported Messrs. Glitsch Inc., U.S.A. (b) Year of import 1993. (c) Has technology been fully absorbed ? Being absorbed. (d) If not fully absorbed, Some more changes are areas where this has proposed to be carried not taken place,reasons out in June 1995 for therefor and future Esteritier internals, plans of action. other distillation tower internals, apart from a few heat exchangers/pumps/ control valves etc. to improve the performance.

4. FOREIGN EXCHANGE EARNINGS AND OUTGO:

1. Activities relating to exports, initiatives taken to increase exports, development of expert markets for products and services and export plans

Despite difficult international market conditions, your Company has been able to increase its exports by 19% both in the quota/non-quota countries. Upgradation of product mix and introduction of new qualities especially in polycotton, cotton rich workwear drills and fine/superfine count made-ups helped in achieving the above growth.

The Company actively participated in International Trade Fairs and Exhibitions to maintain its interaction with the existing and to attract new buyers.

2. Total foreign exchange used and earned Rs.in crores Total foreign exchange used 285.36 Total foreign exchange earnings 168.07

It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs.325.52 crores.


Mar 31, 1994

The directors present herewith the audited Balance Sheet & Profit and Loss Account with their report for the year ended 31st March, 1994.

The Loss for the year amounts to Rs. 23,463. After adding the brought forward loss of Rs. 8,573 total loss amounts to 32,036. This loss is carried to the Balance sheet. In view of the loss incurred during the year, the Directors are not in a position to declare dividend.

No deposits from the public were accepted or outstanding with the company during the year.

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (disclosure of Particulars in the Report of Board of Directors) Rules, 1988 has not been given, since the company is only an investment Company.

During the year the Company issued and allotted 5,100 Equity Shares of Rs.100 each to The Bombay Dyeing and Manufacturing Company Limited, the holding Company on rights basis.

The Directors are exploring avenues for commencing operations of the company.

The Company had no employees covered under Section 217(2A) of the Companies Act, 1956.

Mr. S.S. Kelkar and Mr. D.S. Gagrat retire by rotation and are eligible for re-appointment.

The retiring Auditors M/s. Harish Chopra are eligible and recommended for re-appointment.

No other material changes or commitments affecting the financial position of the Company occurred after the date to which the accounts relate and the date of this Report.


Mar 31, 1993

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 1993.

DIVIDEND: The Directors recommend a dividend of Rs. 3.00 per Equity Shares of Rs. 10 each amounting to Rs. 6.75 crores for the year ended 31st March, 1993, subject to deduction of tax at appropriate rates, to be paid, if approved by the members, at the Annual General Meeting to be held on 16th August, 1993.

ACCOUNTS: The method of providing depreciation for the year in the accounts and the rates adopted for the computation thereof are set out in Note (3) to the Accounts.

The rates adopted in respect of Textile Division Machinery acquired/purchased during 1982-93 to 1985-87 for the purpose of determining the specified life under Section 205(2)(b) of the Companies Act, 1956, were consistent with the circular dated 21st May 1986 issued by the Department of Company Affairs and with the company's actual claim for depreciation under the Income-tax Act which was on a single shift basis. In respect of such machinery depreciation is provided in the current year and in the relevant previous years inclusive of extra shifts in view of Schedule XIV to the Companies Act, 1956, and a subsequent clarification issued related thereto.

The adequacy of this depreciation in relation to the normal useful life of its Textile Division Machinery has been confirmed by competent independent technical evaluation.

The Company is also advised by Counsel that the depreciation provision by the Company in the relevant years is in accordance with the provision of Section 205(2)(b) of the Companies Act, 1956 and the dividend declared, if any, out of the profits for the year under report would be consistent with the provision of Section 205 of the Companies Act, 1956.

RIGHTS/PREFERENTIAL ISSUE OF NCDs/SPNs:

The Company's recent issue of Secured Non-Convertible Debentures (NCDs)/Secured Premium Notes (SPNs) with detachable equity warrants by way of Rights to the shareholders and by way of Preferential Offer to the holders of 1986 series of NCDs has been oversubscribed and is expected to be allotted shortly. The funds so raised with be utilised for the purpose of part financing the DMT modernisation-cum-expansion project as also the ongoing Textile modernisation projects.

TAXATION: On completion of assessment for the Assessment Year 1990-91, the Tax Department has determined a liability of Rs. 10.44 crores (including interest of Rs. 2.39 crores) of which Rs.4.06 crores was already provided in the Books of Account. The Company is contesting the additional demand of Rs. 6.38 crores in appeal and expects to succeed. Accordingly, no provision has been made in the Books of Account in this behalf but the disputed demand has been disclosed as a contingent liability. Meanwhile, the additional demand of Rs. 1.24 crores earlier raised for Assessment Year 1989-90 has been deleted to the extent of Rs. 1.20 crores in the appeal to the Commissioner of Income-tax (Appeals). The Company is in further appeal to the Tribunal regarding the balance amount of Rs. 0.04 crore.

On the basis of Council's opinion, in the computation of provision for taxation for the year, gain on cancellation of forward foreign exchange contracts has been excluded from the taxable income.

SUBSIDIARY COMPANIES: As required under Section 212 of the Companies Act, 1956, the accounts of the subsidiaries of the Company are annexed.

FIXED DEPOSITS: Deposits from 902 depositors aggregating to Rs. 0.55 crore which had matured were outstanding with the Company as on 31st March, 1993 as the depositors had not claimed them despite reminders.

DEBENTURES: Funds raised from the issues of the various Debentures have been utilised for the purpose for which they were raised.

The Company redeemed 3,33,334 - 13.5% Secured Redeemable Debentures (1983 Series) of Rs. 120 each on the due date, namely, 9th June, 1993. These Debentures were raised for part financing the DMT project in 1983.

TEXTILE DIVISION: The sales turnover of the Division during the year ended 31st March, 1993 was Rs. 362.09 crores as against Rs. 309.67 crores for the previous year, showing an increase of 17%.

Sharp increase in cotton price during the 1991-92 cotton season resulted in high raw materials costs during the first half of the year. There was, however, a drop in the price of cotton during the first half of the 1992-93 season though the benefit arising out of this is now beginning to be eroded by the rise in prices which is taking place due to a combination of higher cotton consumption in the country and higher allocation made by the Government for exports. Price of Polyester, filament yarn ruling currently do not reflect fully the duty reduction effected in the 1993-94 Budget and a substantial part of the reduction in duties appears to have been absorbed by the filament producers themselves. There has also been a steep increase of almost 30% in energy costs and 20% in oil and fuel costs during this year. Operating as the Company is, in a global environment, cost reduction and cost control continue to be major areas of concern for the Division.

The capital equipment installed during the year includes 72 Air Jet Weaving Machines, 8 Trutschler Cards, 9 Draw-frames, 5 Open End Spinning Machines, 6 Autoconers, 1 Warping Machine and 2 Sizing Machines. This expenditure forms part of the ongoing efforts of the Company to improve yarn and fabric quality for exports.

The further investment of Rs 68 crores for modernisation and technological upgradation is expected to be made in the next two years.

The Company's exports during the year went up by over 18% from Rs. 113.29 crores to Rs. 134.26 crores. In the context of the recessionary situation in most of the major developed markets such as U.S.A., U.K., Germany, etc. the growth achieved can be considered to be satisfactory. Exports are expected to touch Rs. 160 crores in the current year.

Government of India has conferred on the Company the highest National Award for Textile Exports for the years 1989-90 and 1990-91.

DMT DIVISION: The synthetic fibre industry faced slack conditions throughout the year which, in turn, saw a fall in the demand for polyester raw materials such as DMT. While operationally the DMT plant ran very satisfactorily, production had to be limited to 56,088 tonnes, corresponding to 93.5% of rated plant capacity, due to reduced offtake. As reported last year, the reduction in customs duty on DMT and PTA from 150% to 110% in the 1992 Budget gave rise to a marked decline in the prices of these products in the domestic market. The impact on your Company was particularly severe because the duty reduction on DMT and PTA was not accompanied by a corresponding reduction in the customs duty on paraxylene which remained unchanged at 85% throughout the year despite repeated representations to the Government in this regard by the Company. It was only in the 1993 Budget that the import duty on paraxylene was reduced from 85% to 40%. However this relief was nullified by a further reduction in the duty on DMT and PTA, which went down from 110% to 70%. This has led to a further decline in the domestic prices of DMT and PTA, which, may put margins of this Division under pressure. The Polyester market has still to regain its earlier buoyancy but the availability of cheaper inputs combined with the reduction in excise duties on polyester fibre and filament yarn announced in the 1993 Budget, has given a fillip to the market. Hopefully, this will stimulate greater demand for our DMT in coming months.

The DMT expansion project has made good progress, though delayed by a few weeks due to civil disturbances in the country earlier in the year. The capital cost per tonne of installed capacity of the Company's expanded DMT plant will be very attractive compared to the current cost of a grassroot DMT/PTA plant of the same size. Moreover, the Company will also have the advantage of significant cost benefits through economics of scale specially in regard to energy, raw material and fixed cost per unit of production.

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

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in the Annexure to this Report.

CONSERVATION OF ENERGY :

Energy Conservation Measures taken: Some of the measures your Company had undertaken/continued to implement during the year under report in the high priority area of energy conservation are given below : Textile operations - Optimum utilisation of machinery with regular maintenance and overhauling. - Efficient use of compressed air with special cells to obtain maximum energy saving. - Use of clean-o-dyne oil emulsifier for boilers to reduce fuel oil consumption. - Maintaining lower steam pressure on machines and controlling steam leakage. - Control on working of humidification plants to reduce electric power consumption. - Steam condensation recovery of sizing machines. - Usage of 100% synthetic spindle tapes in ring spinning. - Conversion of Thermopac boilers from 2 phase to 3 phase to improve their efficiency. - Replacement of energy intensive machines by energy efficient machines. - 90% recovery of steam condensate from indirect heating systems which maintains boiler feed water over 80 deg. C. - Use of Textometers to optimise energy on stenters. - Waste heat from recovery and reuse.

DMT operations - Replacement of thermodynamic traps by thermostatic ones in a phased manner and close monitoring of steam traps for maximising condensate recovery and minimising consumption of steam and fuel oil. - Oxygen analyzers for boilers/furnace being made operative with some modification resulting in higher operational efficiency. - Reduction of heat losses by proper maintenance of insulation of piping and equipment. - Optimising and close monitoring of process parameters. - Replacement of conventional refrigeration unit by vapour absorption unit. - Utilising low pressure waste steam resulting in lower electricity consumption. - Improvement of power factor by installing capacitors. - Elimination of idle running of equipment. - Continuous monitoring and action on steam traps for maximising condensate recovery and minimising the consumption of steam and fuel.

Additional investments and proposals, if any, being implemented for reduction of consumption of energy: Your Company is implementing the following proposals for energy conservation in DMT operations under its expansion-cum- modernisation project : (i) Replacement of existing instrumentation by DCS instrumentation. (ii) Installation of an oxidiser off gas expansion-turbine for the new electrically driven air compressor that will replace the existing old reciprocating compressors and thereby saving the overall electricity expenses by around 10%. (iii) Installation of latest technology tower internals and process parameter changes that will considerably reduce total energy requirement. (iv) Installation of Anaerobic Effluent Treatment Plant and utilisation of the biogas generated during the process for steam generation.

Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods Optimisation and control of energy related costs help your Company to remain competitive in both domestic and international markets.

TECHNOLOGY ABSORPTION : Research and Development (R&D) Specific areas in which R&D carried out by the Company (a) Development of new textile products for exports, defence, civil engineering and industrial use. (b) Development of new processes or modification of existing processes to improve product quality and reduce cost of production. (c) Reduction in waste of material and energy and fuel consumption.

Benefits derived as a result of the above R&D (a) Losses due to quality problems were reduced. (b) Improved customer satisfaction could be obtained due to improvement in product quality. (c) Exacting quality specifications in industrial and export market could be met. (d) Cost of production could be reduced.

Future Plan of Action Development of new products and processes and improvement in quality and reduction in quality related cost in existing products and processes.

Expenditure on R&D Expenditure on R&D activities during the reporting year amounted to Rs. 0.29 crore.

Technology absorption, adaptation and innovation Efforts in brief, made towards technology absorption, adaptation and innovation (a) Development of non-woven geotextiles, V-belt jacket fabrics and a range of fabrics woven from blend and fine cotton yarn spun on OE system. (b) Development of a range of fusible interlining fabric by powder dot coating. (c) Technology to avoid bowing in the fabric. (d) Technology for operation of the existing DMT Plant has been fully absorbed while new technology is being incorporated for the expanded DMT Plant.

Benefits derived as a result of the above efforts (a) Sustained and efficient operation of the plant at or above the rated capacity and production of DMT of international quality. (b) New products could be introduced in export and local market. (c) Cost of production of some of the products could be reduced. (d) Better quality and improved packing for export products.

Information regarding technology imported during the last 5 years Not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO: Activities relating to exports, initiatives taken to increase exports, development of export markets for products and services and export plans

Your Company's exports are directed at the developed countries in the General Currency Area and in spite of prolonged recession in these markets, the Company has been able to achieve growth in its exports. This is basically due to large investment made in machinery for export production and quality improvement programmes to meet the exacting quality standards demanded by international customers. Regular participation in International Trade Fairs as also overseas tours undertaken by Senior Managers have enabled the Company to understand the requirements of its international customers and to take steps to meet these effectively.

Total foreign exchange used and earned Rs.in crores Total foreign exchange used .................... 108.87 Total foreign exchange earnings................. 135.69 It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs. 98.84 crores.


Mar 31, 1992

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 1992.

DIVIDEND: The Directors recommend a dividend of Rs.3 per Equity Share of Rs.10 each amounting to Rs. 6.75 crores for the year ended 31st March, 1992, subject to deduction of tax at appropriate rates, to be paid, if approved by the members, at the Annual General Meeting to be held on 15th September, 1992.

TAXATION: On completion of assessment for the Assessment Year 1989-90, the Tax Department has determined a liability of Rs. 4.55 crores (including interest of Rs. 0.47 crore) of which Rs.3.31 crores was already provided for in the Books of Account. The Company is contesting the additional demand of Rs.1.24 crores is appeal and expects to succeed based on decisions obtained in the previous assessment year. Accordingly, no provision has been made in the Books of Account in this behalf but the disputed demand has been disclosed as a contingent liability.

SUBSIDIARY COMPANIES: As required under Section 212 of the Companies Act, 1956, the accounts of the subsidiaries of the Company are annexed.

FIXED DEPOSITS: Deposits from 653 depositors aggregating to Rs.0.42 crore which had matured were outstanding with the Company as on 31st March, 1992 as the depositors had not claimed them.

DEBENTURES: Funds raised from the issues of the various Debentures have been utilised for the purpose for which they were raised.

TEXTILE DIVISION: Operations and Market: The turnover of the Division during the year ended 31st March, 1992 was Rs.309.67 crores as against Rs.265.09 crores for the previous year, showing an increase of over 17%.

1991 turned out to be a year of high cost inflation for the organised textile industry. Substantial increases in the administered prices effected in the third quarter of 1990 as also in the raw material prices, to which a reference was made in the last years report, worked through the system during the current year leading to double digit inflation. The cost increases and stiff consumer resistance resulted in margins coming under pressure. However, Companies with established export markets and modern equipment --- your Company is one of them --- were able to successfully withstand the severe impact of the adverse conditions.

The Division has incurred capital expenditure aggregating to Rs.24.18 crores during the year. Further capital expenditure on modernisation aggregating to Rs. 70 crores is expected to be incurred during the next 2 years.

The Company has been able to raise its export by over 60% from Rs.69.88 crores to Rs.113.29 crores during the year. Considering that the Company's exports are to General Currency Areas, this is a most satisfactory performance, particularly, in the context of the recessionary trends in U.S.A. and European markets. The export turnover is expected to go even higher during the current year.

Raw Materials: in anticipation of higher Mill consumption and lower than expected cotton corp, cotton prices went up by about 45% on an average during the 1991-92 cotton season. Large imports had to be contracted for by the industry to ensure that production did not suffer. In actual fact, the cotton crop turned out to be somewhat higher than was expected and the Mill consumption did not reach estimated levels which is expected to result in a more comfortable carry over of stocks. Cotton prices have, however, continued to rule high. Polyester fibre prices have increased during the year and Polyester Filament producers also attempted to raise prices disproportionate to the cost increases but are meeting with demand resistance. Capital Expenditure: The equipment installed during the year includes 2 Blow Room lines, 15 Trutzschler cards, 4 Laxmi Retier cards, 12 High-speed Draw Frames, 6 Combers, 2 Sizing machines, 1 Hot Flue Drying machine and 6 Open-end spinning machines. The objective has been to modernise the spinning departments at both Mills to improve quality for export and to install processing equipment for product diversification.

DMT DIVISION: DMT production for the year ended 31st March,1992 at 57,554 tonnes, corresponding to about 95% of rated plant capacity, was limited by slack demand. Recessionary conditions in the synthetic fibre/yarn market depressed demand for DMT throughout the year, which adversely affected our sales. Towards the latter part of the financial year, all producers of DMT took recourse to price cutting in an effort to retain market share. With the abolition of OGL for paraxylene in the wake of liberalisation, imports have now to be paid for at the higher open market rupee rate for the dollar and this, coupled with the earlier devaluation of the rupee, has sharply increased the cost of imported paraxylene on which the Company is dependent and thereby inflated the production cost of DMT. Besides this, Government has reduced the customs duty on DMT and PTA from 150% to 110% in the 1992 Budget, which has led to further price cutting by all indigenous DMT and PTA producers. However, a corresponding reduction in the customs duty on the raw material paraxylene was not made and this remains unchanged at 85%. This , coupled with the afore mentioned increase in the cost of imported paraxylene, has impacted severely on the viability of our DMT production. The Company has made representations to Government for a reduction in customs duty on paraxylene in line with the reductions effected for other similar petrochemical feedstocks and to offset the impact of the reduction of customs duty on DMT and PTA. It is hoped that the Government will consider our representation favourably and take an early decision to reduce the customs duty on paraxylene.

The DMT expansion project has progressed satisfactorily. Orders for all major indigenous and imported equipment have been placed with the latter being financed through commercial borrowings. The expanded capacity is expected to be commissioned by mid-1993. The capital cost of the expansion project has increased from the earlier estimate of Rs.95 crores to Rs.115 crores, mainly due to devaluation of the rupee. To improve reliability and safety, the Company is modernising and upgrading some of the plant systems at an estimated cost of Rs. 30 crores.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in the Annexure to this Report.

CONSERVATION OF ENERGY :

Energy Conservation Measures taken: As in the earlier years, your Company continues to attach high priority to conservation of energy. Enumerated below are some of the measures undertaken by your Company during the year under: - Optimum utilisation of machinery with regular maintenance and overhauling. - Efficient use of compressed air with special cells to obtain maximum energy saving. - Use of clean-o-dyne oil emulsifier for boilers to reduce fuel oil consumption. - Maintaining lower steam pressure on machines and controlling steam leakage. - Control on working of humidification plants to reduce electric power consumption. - establishment of special cells of qualify engineers for detailed study energy conservation and their implementation. - Controlling illumination in various deparment. - Steam condensation recovery of sizing machines. - Usage of flat belt in place of: `V' belts.

The process of manufacture of DMT is energy - intensive and entails usage of electricity, steam and thermic heating systems. A steady improvement has been brought about in the operation of the plant over a period of time with a view ot significantly reducing energy consumption per tonne of DMT production. The measures undertaken by your Company during the year under report to conserve energy include:

DMT operations - Replacement of thermodynamic traps by thermostatic ones in a phased manner and close monitoring of steam traps for maximising condensate recovery and minimising consumption of steam and fuel oil. - Oxygen analyzers for boilers/furnace being made operative with some modification resulting in higher operational efficiency. - Reduction of heat losses by proper maintenance of insulation of piping and equipment. - Optimising and close monitoring of process parameters. - Replacement of conventional refrigeration unit by vapour absorption unit. - Utilising low pressure waste steam resulting in lower electricity consumption. - Improvement of power factor by installing capacitors. - Elimination of idle running of equipment. - Continuous monitoring and action on steam traps for maximising condensate recovery and minimising the consumption of steam and fuel.

Additional investments and proposals, if any, being implemented for reduction of consumption of energy: Your Company is implementing the following proposals for energy conservation in DMT operations under its expansion-cum- modernisation project : (i) Replacement of existing instrumentation by DCS instrumentation. (ii) Provision of an oxidiser off gas expansion-turbine for the new electrically driven air compressor that will replace the existing old reciprocating compressors and thereby saving the overall electricity expenses by around 10%. (iii) Introduction of latest technology tower internals and process parameter changes that will considerably reduce total energy requirement.

Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods Optimisation and control of energy related costs help your Company to remain competitive in both domestic and international markets.

TECHNOLOGY ABSORPTION : Research and Development (R&D) Specific areas in which R&D carried out by the Company (a) Development of new textile products for exports, defence, civil engineering and industrial use. (b) Development of new processes or modification of existing processes to improve product quality and reduce cost of production. (c) Reduction in waste of material and energy and fuel consumption.

Benefits derived as a result of the above R&D (a) Losses due to quality problems were reduced. (b) Improved customer satisfaction could be obtained due to improvement in product quality. (c) Exacting quality specifications in industrial and export market could be met. (d) Cost of production could be reduced.

Future Plan of Action Development of new products and processes and improvement in quality and reduction in quality related cost in existing products and processes.

Expenditure on R&D Expenditure on R&D activities during the reporting year amounted to Rs. 0.20 crore.

Technology absorption, adaptation and innovation Efforts in brief, made towards technology absorption, adaptation and innovation (a) Development of non-woven geotextiles, V-belt jacket fabrics and a range of fabrics woven from blend and fine cotton yarn spun on OE system. (b) Development of a range of fusible interlining fabric by powder dot coating. (c) Technology for operation of the existing DMT Plant has been fully absorbed while new technology is being incorporated for the expanded DMT Plant.

Benefits derived as a result of the above efforts (a) Sustained and efficient operation of the plant at or above the rated capacity and production of DMT of international quality. (b) New products could be introduced in export and local market. (c) Cost of production of some of the products could be reduced.

Information regarding technology imported during the last 5 years Not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO: Activities relating to exports, initiatives taken to increase exports, development of export markets for products and services and export plans

Your Company's exports always been a leader in the field of textile exports and initiatives have been taken/opportunities have been identified to expand its share of international business. More specificially, the initiatives taken on the export promotion front include periodical tours undertaken by senior managers of the Company to keep abreast of the developments in the international markets and for assessing the changing customer needs through personal discussions; substantial investment in machinery for export production and quality improvement specifically aimed at products for overseas markets. Your Company also participates in International Textile Fairs which provide excellent opportunities to those engaged in international textile trade to discuss among other things, emerging markets, products and processes.

Total foreign exchange used and earned Rs.in crores Total foreign exchange used .................... 59.45 Total foreign exchange earnings................. 115.36 It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs.77 crores.


Mar 31, 1991

The Directors hereby present their Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 1991.

DIVIDEND: The Directors recommend a dividend of Rs.3 per Equity Share of Rs.10 each amounting to Rs.674.52 lacs for the year ended 31st March, 1991, subject to deduction of tax at appropriate rates, to be paid, if approved by the members, at the Annual General Meeting to be held on 9th September, 1991.

TAXATION: A Writ Petition filed by the Company interalia challenging the validity of Circular No.495 dated 22nd September 1987, issued by the Central Board of Direct Taxes (CBDT) in so far as it deals with the carry forward of unabsorbed allowances under Section 115J(2) of the Income Tax Act, 1961 has been admitted by the Bombay High Court. The Court has, in terms of its interim order, permitted the Company to file the Return of Income for the year in accordance with one of the interpretations put forward by the Company and pay tax accordingly. Provision for taxation for the year has been made on the basis of the said interpretation.(See Note 11 Schedule 15).

On completion of assessment for the Assessment year 1988-89, the Tax Department has determined a liability of Rs.472.06 lacs) of which Rs.359.12 lacs was already provided in the Books of Account. As the Comapny is contesting the additional demand of Rs.112.94 lacs in appeals, no provision has been made in the books in this behalf. However, the disputed demand has been disclosed as a contingent liability.

SUBSIDIARY COMPANIES: As required under Section 212 of the Companies Act, 1956, the accounts of the subsidiaries of the Company are annexed.

FIXED DEPOSITS: Deposits from 610 depositors aggregating to Rs.37.34 lacs which had matured were outstanding with the Company as on 31st March, 1991 as the depositors had not claimed them.

DEBENTURES: Funds raised from the issues of the various Debentures have been utilised for the purpose for which they were raised.

TEXTILE DIVISION: Operations and Market: The turnover of the Division during the year ended 31st March, 1991 was Rs.265.08 crores as against Rs.210.84 crores for the previous year, showing an increase of over 25%.

After many years, 1990 was a good year for the organised textile industry. Revivial of demand for cloth and fairly stable raw material costs helped the industry. However, since the third quarter of last year, substantial increases in the administered prices have led to an all-round escaplation of costs. With the raw material prices also rising steeply, the cost advantages available to the industry during the last year have disappeared but the Company has been able to counteract this with higher exports where margins are better adn also through effective cost control.

The Capital expenditure incurred by the Division has been of the order of Rs.23.02 crores during the year and the Board has recently approved a 3-year modernisation programme with an investment of Rs.68 crores.

Despite demands levelling off in internation markets due to recessionary trends in the U.S.A. and some European markets, the Company has been able to improve its export performance by over 36% from Rs.51.37 crores to Rs.69.88 crores during the period under review. The Company expects to do even better during the current year.

Raw Materials: In anticipation of a large cotton crop of 129 lac bales, the Government allocated an export quota of 13.43 loc bales. This estimate was subsequently scaled down by as much as 14 lac bales and with a higher than expected increase in the mill consumption, cotton market has witnessed shortage of cotton during the 1990-91 season resulting in price increases of about 50% on the average. The current ruling prices are about 90% higher than the prices ruling during the same time last year. The prices of Polyester fibre and Polyester Filament Yarn have also moved up since th third quarter of 1990.

Capital Expenditure: As a part of the ongoing modernisation, the Company installed during the year a Blow Room line with high production cards, 6 open-end spinning machines, 16 Sulzer weaving machines and 2 Auto coners at its Manufacturing Mills. The addition to the processing machinery included a Chainless Mercerizer, Energy Efficient Stenter, a Soaper, a Singeing machine and 3 Yarn Deying Units. To fulfil its obligation to a cleaner environment, a new Effluent Treatment Plant has also been installed in the Company's Processing House is Bombay, at a cost of Rs.96.71 lacs.

DMT DIVISION: DMT Division for the year ended 31st March, 1991 was 60,081 tonnes, corresponding to the full rated capacity of the plant. This wa achieved despite curtailment of production on several occasions due to shortage of paraxylene caused by vagaies of the import licensing policy. As the Supplementary Licenses issued to the Company under Appendix 3 for import of paraxlyene were inadequate to meet the full requirements and also to provide a buffer stock in view of the uncertain supply position created by the Gulf conflict, substantial quantities of paraxylene were procured against Additional Licences acquired at a high premium. This, combined with the steep rise in the international price of paraxylene in the wake of the Gulf crisis, made the paraxylene imported and being used by the Company substantially more expensive than that available to its competitors, all of whom make their own paraxylene. Although the international price of paraxylene has declined in recent months, the Company is still carrying substantial stocks of high priced paraxylene imported earlier. Paraxylene was placed under OGL in April, 1991 but the procedural benefit of this has been considerably circumscribed by the tight foreing exchange position which has resulted in delays in approval of Letters of Credit and imposition of large cash margins.

Demand for our DMT remained strong during most of the year but depressed conditions in the polyester industry led to sluggish sales of DMT and erosion of prices during the lat quarter.

The foreign collaboration proposal for the expansion of the DMT plant to 100,000 tonnes per annum has been approved and implementation of the project is in progres. The cost of this project is currently estimated at Rs.95 crores.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in the Annexure to this Report.

INSURANCE: All the properties including buildings, plant and machinery and stocks have been adequately insured.

A. CONSERVATION OF ENERGY: (a) Energy Conservation Measures taken: Your Comapny attaches high priority to conservation of energy. During the reporting year, some of the measures taken by your Company for energy conservation in Textile operations were: -- establishment of special Cells with responsibility of securing energy saving -- both thermal and electric. -- change over from cotton spindle tapes to synthetic spindle tapes. -- reduction in humidification motor speeds. -- running induction and variable motors at maximum efficiency. -- updating of insulation of steam line. -- recycling and conservation of water resulting in lesser energy requirement to heat water -- modifcation in hot air distribution system for finer control of humidity.

DMT manufacture is an energy intensive process and uses electricity, steam and thermic heating systems. The operatios of the plant has been steadily improved over time to significantly reduce energy consumption per tonne of DMT production. The energy conservation measures taken by your Company include -- elimination of idle running of rotory equipments -- running of compressors at full load -- control of steam leakages -- microprocessor based furnace firing system -- installation of capacitor bank for improving power factor

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy. Changes have generally been evolutionary in nature and as such no major additional your Company has the following proposals for energy conservation in DMT operations which are currently under study/evaluation: -- improvement in overall power factor -- modification of cooling tower blades -- replacement of low efficiency motors by high efficiency motors -- energy conservation for lighting by replacing present lamps with sodium vapour lamps -- variable frequency drive for CE boiler

(c) Impact of measures at (a) and (b) for reduction of energy consumptin and consequent impact on the cost of production of goods. Optimisation and control of energy related costs helps your Company to remain competitive in both domestic and international markets.

(d) Total Energy Consumption and Energy Consumption per unit of production in prescribed Form A. As per Form A attached.

B. TECHNOLOGY ABSORPTION: Research and Development (R&Da: 1. Specific areas in which R&D carried out by the Company: (a) New textile products for defence and civil engineering applications and industrial use were developed. (b) New processes were developed to get quality improvement in industrial and export qualities. (c) Present production processes were improved to meet quality specifications of sophisticated export qualities.

2. Benefits derived as a result of the above R&D: Exacting quality specifications for products in export and industrial markets could be met. Also, avoidable losses due to quality problems could be reduced resulting in significant saving.

3.Future Plant of Action: Development of a range of new products and processes to meet changing requirements of industrial and export markets.

4.Expenditure on R&D: Expenditure on R&D activities during the reporting year amounted to R.19 lacs.

Technology absorptin, adaptation and innovation: 1.Efforts in brief, made towards technology absorption, adaptation and innovation: (a) Development of computer ribbon fabric, spindle tape fabric and elastic fabric. (b) Process development/modification for decatising blankets, yarn dyed export qualities, featherproof export qualities and industrial poplins. (c) Technology for operation of the existing DMT Plant has been fully absorbed.

2. Benefits derived as a result of the above efforts: (a) Sustained and efficient operation of the plant at or above the rated capacity and production of DMT of international quality. (b) New products could be introduced in industrial and export markets. (c) Quality of the existing range of the products could be improved to meet requirements of the industrial and export markets.

3. Information regarding technology imported during the lat 5 years. NA.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO: 1. Activities relating to exports, initiatives taken to increase exports, development of export markets for products and services and export plans: Your Company has always been a leader in the field of textile exports and initiatives have been taken/opportunities have been identified to consolidable and increase our share of international textile business which is already reflected in the figure given in the Directors' Report. The Company continues to make efforts to explore new markets/improve the quality of products to meet the exacting standard of the world market.

2. Total foreign exchange used Total foreign exchange used 6974.03 Total foreign exchange earnings 7057.03 It may be relevant to observe here that the value of import substitution achieved through production of DMT is estimated at Rs.68 crores.

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