Your Directors present the 112th Annual Report and the Audited Accounts
 of the Company for the year ended 31st March 2004.
 
 1. FINANCIAL RESULTS
 
                                                        Rs.          Rs.
 
 PROFIT FOR THE YEAR                                         4,24,15,603
 before charging interest and depreciation
 
 Less : Interest                                             2,34,72,847
 
 Depreciation                                1,72,22,765     4,06,95,612
 
                                               17,19,991
 
 Less : Balance of Loss Brought Forward                     14,72,49,436
 
 LOSS CARRIED FORWARD                                       14,55,29,445
 
 2. DIVIDEND
 
 In absence of profit, we regret our inability to recommend Dividend on
 Equity Shares of the Company.
 
 3. PERFORMANCE
 
 TEXTILE - (AKBARPUR UNIT, PUNJAB)
 
 Your Directors are pleased to inform that NISM, Akbarpur has shown
 better result except during the first quarter because of countrywide
 strike by the weavers and knitters to protest against the introduction
 of CENVAT by the Govt. during the last budget of 2003. However, after
 some amendment made by the Central Govt. in CENVAT, the activities in
 the market become normal and production again resumed to its usual
 level.
 
 Some balancing machines and equipments were commissioned for
 manufacturing value added items to improve its working. New energy
 saving equipments were also installed which resulted in the reduction
 of power cost.
 
 Under WTO agreement, quota restrictions will be abolished from 1st
 January, 2005. This will help Indian Textile Industries to grow
 further. Your Directors look forward for better results during the
 current year.
 
 ENGINEERING DIVISION
 
 The working of this division was satisfactory. Due to recession in the
 Engineering Industry this division could not procure adequate orders
 till the second quarter of the year. The unprecedented increase in the
 Steel price also affected the margins of the Division. Since then your
 Company has received substantial orders from TISCO and other firms. The
 current order position is satisfactory and the future for procuring
 further orders looks quite bright. Your directors are hopeful of better
 results in future.
 
 MODERNISATION
 
 The cost of Power purchased from SEB went up during the year and the
 position in this regard is not expected to improve in the foreseeable
 future. Accordingly, your Directors have decided to install Captive
 Power Plant, which would improve our economy and enhance the life of
 machines.
 
 Value addition in our finished products has become essential, as it
 would add to our profitability. Hence, it has been decided to install a
 dyeing plant alongwith some balancing machines.
 
 In this regard a scheme has been submitted to State Bank of India with
 an aggregate amount of Rs. 15.44 Crores for availing term loan under
 Govt. of India Textile Upgradation fund Scheme. After the
 implementation of the scheme, your companys bottom line will improve
 further.
 
 4. AUDITORS OBSERVATION
 
 The Auditors observation on Note 11 of Schedule 16 to the accounts is
 self explanatory.
 
 5. FIXED DEPOSITS
 
 Deposits aggregating to Rs. 1,30,000 falling due for the payment to
 6(Six) depositors remained unclaimed as on 31st March, 2004 have since
 been paid to such depositors.
 
 In compliance with the provisions of section 205C(2) of the Companies,
 Act 1956 the Company has deposited a sum of Rs. 1,93,123 in respect of
 Unclaimed Dividend, Unclaimed Deposits and Interest accrued thereon
 remaining unclaimed for a period of Seven years or more with Investor
 Education & Protection Fund.
 
 6. INFORMATION PERTAINING TO SUBSIDIARY COMPANY
 
 Particulars relating to the Subsidiary Company as required under
 Section 212 of the Companies Act, 1956 are annexed to the Balance Sheet
 of your Company.
 
 7. DIRECTORATE
 
 Sri A. C. Chakrabortti, Sri P. K. Mor and Sri S. Bagri retire from the
 Board by rotation and being eligible offer themselves for re-election.
 
 8. DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956 your Directors
 confirm that:
 
 a) the applicable accounting standards have been followed in the
 preparation of final accounts and that there are no material
 departures;
 
 b) such accounting policies have been selected and applied consistently
 and judgments and estimates made are reasonable and prudent so as to
 give a true and fair view of the state of affairs of the Company as at
 31st March, 2004 and of the Profit and Loss of the Company for the year
 ended on that date ;
 
 c) proper and sufficient care had been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 d) the annual accounts have been prepared on the basis of a going
 concern.
 
 9. PARTICULARS OF EMPLOYEES
 
 The provisions of the Companies (Particulars of Employees) Rules, 1975
 read with Section 217(2A) of the Companies Act. 1956 are not
 applicable.
 
 10. INFORMATION PERTAINING TO SECTION 217(1)(e)
 
 Particulars of Conservation of Energy, Technology Absorption and
 Foreign Exchange Earnings and Outgo as required pursuant to the
 Companies (Disclosure of Particulars in the Report of Board of
 Directors) Rules, 1988 are annexed and forming part of this Report.
 
 11. PERSONNEL
 
 Relations with workmen and employees remained cordial during the year
 under review. Your directors place on record their appreciation for the
 co-operation they had received from them.
 
 12. CORPORATE GOVERNANCE
 
 The Board of Directors believe that the broad principles of Corporate
 Governance ensure standardisation of corporate conduct. It focuses the
 corporate conduct towards employees, consumers and society. A report of
 Corporate Governance and Management Discussion and Analysis is given
 separately and form part of this report.
 
 The Certificate of the Auditors of your Company confirming compliance
 of the conditions of Corporate Governance as stipulated in Clause 49 of
 the Listing Agreement with the Stock Exchanges, is given in this
 report.
 
 13. CONSOLIDATED FINANCIAL STATEMENTS
 
 In accordance with the Accounting Standard 21 and pursuant to Clause 32
 the Consolidated Financial Statements of the Group form part of this
 Report & Accounts and this also contains the segment information in
 terms of the Accounting Standard 17 issued by The Institute of
 Chartered Accountants of India.
 
 14. AUDITORS
 
 Messrs. Price Waterhouse, Chartered Accountants, the Auditors of the
 Company and Messrs. Bagree & Co., Chartered Accountants, the Auditors
 of MICCO Division retire and are eligible for re- appointment. The
 Certificate as required under Sub-Section 1-B of Section 224 of the
 Companies Act, 1956 has been obtained.
 
 15. ACKNOWLEDGEMENTS
 
 The Directors take this opportunity to record their appreciation for
 all those who contributed to the success of your Company and look
 forward to their continued support in the years to come.
 
 Registered Office                                On behalf of the Board
 S.India Exchange Place
 Kolkata - 700 001                                         A. K. KOTHARI
                                                                Chairman
 Dated: 29th June, 2004.
 
 ANNEXURE TO DIRECTORS REPORT
 
 (Additional information given in terms of Notification No.l029 of
 30.12.1988 issued by the Department of Company Affairs)
 
 A. CONSERVATION OF ENERGY
 
 (a) Energy conservation measures taken :
 
 The company over the years has always accorded high priority to energy
 conservation and has implemented various schemes on continuous basis to
 save energy wherever possible. This continues to remain the thrust area
 with studies, discussions and analysis being undertaken regularly for
 further improvement.
 
 Some of the measures taken are as under:
 
 i) Use of Energy Saving Spindles, Booster Fans in Humidification plant.
 
 ii) Replacement of Ordinary Choke with Electronic Choke for energy
 saving
 
 iii) Utilisation of natural day light wherever possible.
 
 (b) Additional investment and proposals, if any, being implemented for
 reduction of consumption of energy:
 
 Besides efforts as mentioned above, proposal to install digital process
 indicator, replacement of old compressed air pipe line, energy saving
 air compressor and installation of latest high power equipments are
 under active consideration. Further steps are being taken to implement
 me suggestion of the energy audit carried out by ATIRA.
 
 (c) Impact of measures at (a) and (b) above for reduction of energy
 consumption and consequent impact on the cost of production of goods :
 
 The above measures have resulted in saving of energy with its
 consequential effect to decrease the cost of production. Despite this,
 cost of production increased due to increase in tariffs of electricity
 and other inputs.
 
 (d) FORM A
 
 B. TECHNOLOGY ABSORPTION
 
 (e) FORM-B
 
 Research and Development (R & D): R & D is carried out by the Company
 for increase tn
 
 1. Specific areas in which R&D is carried out : production,
 improvement in quality of products, production process and innovating
 new blends.
 
 2. Benefit derived as a result of the above R&D : Economising the cost
 and improving quality of the products.
 
 3. Future plan for action : We are committed to strengthen the R & D
 activities to improve its competitiveness by procuring and installing
 suitable machines/equipments as and when required.
 
 4. Expenditure on R & D
 
 (a) Capital
 
 (b) Recurring
 
 (c) Total
 
 (d) Total R&D Expenditure as a percentage of total turnover
 
 As per established accounting policy, the expenditure incurred on R & D
 remains merged with various heads.
 
 Technology absorption Adaptation and Innovation
 
 i) Efforts in brief made towards
 
 Technology absorption, adaptation and innovation.
 
 By keeping track of latest development in the fields of technology,
 efforts are continuously made to procure the latest
 Machines/Equipments. The Company has installed at Akbarpur latest model
 Savio Autoconer, LF 1400 Speed Frame, `C Cleaner, Lycra attachment,
 Slub Motion attachment, MBO for homogenous mixing
 
 ii) Benefit derived as a result of above efforts e.g. Output
 Improvement, Cost reduction, Product development & Import
 Substitutions.
 
 The latest technology is being adopted in plants for improving
 productivity, product quality and reducing the consumption of energy.
 
 iii) Details of Imported Technology. No need has been felt for
 acquiring any imported technology.
 
 C. FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 f) Activites relating to exports, initiatives taken to Increase
 exports, developments of new export market for products and Yarn prices
 in domestic market were more lucrative services and export plans than
 export prices which induced us to reduce exports. However, new value
 added products for premium customers are being developed for export
 
 g) Total foreign exchange used and earned
 
 i) Foreign Exchange used during 2003-2004    Rs. 74.35 Lacs.
 
 ii) Foreign Exchange earned during 2003-2004 Rs. 233.70 Lacs.
 
                                                  On behalf of the Board
                                                             A.K.KOTHARI
 Kolkata 29th June, 2004.                                       Chairman