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.