The Shareholders
 
 The Directors submit their Report and Audited Accounts of the Company
 for the year ended 31st March, 2011.
 
 1.  FINANCIAL RESULTS:
 
 The summarized financial results are set out below :
 
                                                       (Rs. in Crores)
 
                                          For the year    For the year
                                                 ended           ended
                                       31st March 2011 31st March 2010
 
 (a) Gross Income                               405.49          313.40
 
 (b) Less: Costs                                358.14          293.25
 
 (c) Balance                                     47.35           20.15
 
 (d) Less: Interest and
 Financial Charges (Net)                         24.58           25.15
 
 (e) Balance                                     22.77          (5.00)
 
 (f) Less: Depreciation                          13.54           12.91
 
 (g) Loss after depreciation
 carried to Balance Sheet                         9.23         (17.91)
 
 (h) Less: Provision for taxation               (0.14)         (13.92)
 
 (i) Net Profit / loss                            9.37          (3.99)
 
 (j) Add : Balance brought forward             (22.39)         (18.40)
 
 (k) Balance carried to Balance Sheet          (13.02)         (22.39)
 
 Your Company has recorded gross income of Rs.405.49 Crores.  for the
 year ended 31st March, 2011 as compared to Rs.313.40 Crores in the year
 ended 31st March, 2010 and profit after tax of Rs.9.37 Cores for the
 year under review as compared to net loss of Rs.3.99 Crores for the
 year ended 31st March, 2010. The year 2010-11 witnessed a reasonable
 improvement in the Company''s business performance. The profit includes
 profit on sale of investment of Rs.7.34 Crores.
 
 2.  SHARE CAPITAL & DIVIDEND:
 
 The Paid up Share Capital of the Company is Rs.6.50 Crores.  No
 dividend for the year is proposed.
 
 
 4.  DIRECTORS :
 
 Mr. Kaiwan Kalyaniwalla was appointed as Additional Director of the
 Company with effect from 24th September, 2010 and holds office upto the
 date of this Annual General Meeting of the Company. The Board of
 Directors commends the appointment of Mr.Kaiwan Kalyaniwalla as a
 Director of the Company.
 
 Mr.Shapoor P. Mistry and Mr.Pallonji S. Mistry are liable to retire by
 rotation at the ensuing Annual General Meeting and being eligible
 offers themselves for re-appointment. The Board of Directors commends
 their re-appointment.
 
 Export-Import Bank of India had appointed vide their letter dated
 29.04.2011, Mr.Sanjay Sarkar as their nominee on the Board of Directors
 in place of Mr.D.G.Prasad. The Board places on record, their sincere
 appreciation of services rendered by Mr.D.G.Prasad to the Company.
 
 Particulars of Directors, who are proposed to be reappointed at ensuing
 Annual General Meeting are furnished as a separate statement annexed to
 the Explanatory Statement of the Notice and Report on Corporate
 Governance.
 
 None of the Directors of the Company are disqualified from being
 appointed as Directors as specified in terms of Section 274(1)(g) of
 the Companies Act, 1956.
 
 5.  CORPORATE GOVERNANCE :
 
 A detailed report on Corporate Governance is annexed as a part of this
 Annual Report and Management Discussion and Analysis report forms a
 part of this report.
 
 A Certificate on compliance of conditions of Corporate Governance as
 stipulated in Clause 49 of the Listing Agreement issued by
 Mr.B.S.Srinivas, Practising Company Secretary is annexed to the Report
 on Corporate Governance.
 
 6.  DIRECTORS RESPONSIBILITY STATEMENT :
 
 Pursuant to the provisions of Section 217(2AA) of the Companies Act,
 1956 and based on the representations received from the operating
 management, the Directors hereby confirm that:–
 
 a.  in the preparation of the annual accounts for the financial year
 ended 31st March, 2011, the applicable Accounting Standards have been
 followed along with proper explanation relating to 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 or loss
 of the Company for that period;
 
 c.  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 Companies Act, 1956
 for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities;
 
 d.  they have prepared the annual accounts for the financial year ended
 31st March, 2011 on a ‘going concern'' basis.
 
 7.  DISINVESTMENT OF SHARES OF P.T. GOKAK INDONESIA :
 
 The Company held 1375 shares of face value of US$ 1000 each of P.T.
 Gokak Indonesia, of book value of Rs.1,000/-. During the year, these
 shares have been sold and company has earned a profit of Rs.7.34
 Crores.
 
 8.  AUDITORS AND AUDIT REPORT:
 
 Messrs. Kalyaniwalla & Mistry, Chartered Accountants, Statutory
 Auditors of the Company and Messrs. H. B.  Murugesh & Company,
 Chartered Accountants, Branch Auditors of the Company to conduct audit
 of Forbes Campbell Knitwear Division of the Company hold office from
 the conclusion of the ensuing Annual General Meeting until the
 conclusion of next Annual General Meeting and they are eligible for
 re-appointment.  Audit Committee have recommended re-appointment of
 Auditors. Your Directors commend their reappointment.
 
 9.  CORPORATE SOCIAL RESPONSIBILITY:
 
 Apart from afforestation, schools and hospitals, the Company continued
 to support causes of public utility both directly and indirectly in the
 field of education, medical relief, relief of poverty and promotion of
 sports and art.
 
 10.  COST AUDITORS :
 
 The Central Government approved the appointment of Messrs. A G
 Anikhindi & Co., Cost Accountants, 1730, Rajarampuri, 6th Lane,
 Kolhapur-416008 Maharashtra State as Cost Auditors of the Company for
 the financial year 2010-11.
 
 The necessary books of accounts and cost records as required under
 Section 209(1)(d) of the Companies Act, 1956 and as applicable to the
 Textiles activities of the Company have been maintained. The Cost Audit
 Report for the year 2009-10 has been filed with Central Government on
 17th September, 2010 within the due date.
 
 11.  CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO :
 
 The particulars as prescribed under Section 217 (1) (e) of the
 Companies Act, 1956 read with Companies (Disclosure of Particulars in
 the Report of the Board of Directors) Rules, 1988 are set out in the
 Annexure to this Report.
 
 12.  PARTICULARS OF EMPLOYEES :
 
 There are no such particulars to be furnished as required under Section
 217(2A) of the Companies Act, 1956 read with the Companies (Particulars
 of Employees) Amendment Rules, 2011.
 
 13.  SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKE-OVERS)
 REGULATIONS, 1997:
 
 Persons constituting group coming within the definition of Group as
 defined in the Monopolies and Restrictive Trade Practices Act, 1969
 include the following:- 
 
 1.    Shapoorji Pallonji & Company Ltd.,
 
 2.    Abhipreet Trading Co.Pvt. Ltd.,
 
 3.    Afcons (Overseas) Constructions and Investments Pvt.Ltd.,
 
 4.    Afcons Offshore and Marine Services Pvt. Ltd.,
 
 5.    Afcons Construction Mideast LLC Dubai, UAE
 
 6.    Afcons Gulf International Projects Services FZE
 
 7.    Afcons Infrastructure Ltd.,
 
 8.    Afcons Infrastructure International Ltd., (AIIL) Mauritius
 
 9.    Afcons Madagascar Overseas SARL, Madagascar
 
 10.   Alaya Properties Pvt. Ltd.,
 
 11.   Archaic Properties Pvt.Ltd.,
 
 12.   Aquamall Water Solutions Ltd.,
 
 13.   Aquadiagnostics Water Research & Technology Centre Ltd.,
 
 14.   Bengal Shapoorji Business Parks Pvt.Ltd.,
 
 15.   Bengal Shapoorji Infrastructure Development Pvt.Ltd.,
 
 16.   Blue Riband Properties Pvt.Ltd.,
 
 17.   Cama Properties Pvt.Ltd.,
 
 18.   Chinsha Properties Pvt. Ltd.,
 
 19.   Corporate Apparel U.S.A., Inc
 
 20.   Cyrus Engineers Pvt. Ltd.,
 
 21.   Delna Finance & Investments Pvt. Ltd.,
 
 22.   Delphi Properties Pvt. Ltd.,
 
 23.   Devine Realty & Construction Pvt. Ltd.,
 
 24.   Doris Properties Pvt.Ltd.,
 
 25.   Drashti Developers Pvt. Ltd.,
 
 26.   East View Estate Pvt. Ltd.,
  
 27.   Eureka Forbes Ltd.,
 
 28.   Euro Forbes International Pte. Ltd.,
 
 29.   E4 Development & Coaching Ltd,.
 
 30.   Empower Builders Pvt. Ltd.,
 
 31.   Firstrock Infrastructure Pvt. Ltd.,
 
 32.   Fayland Estates Pvt. Ltd.,
 
 33.   Flamboyant Developers Pvt. Ltd.,
 
 34.   Flooraise Developers Pvt.Ltd.,
 
 35.   Floral Finance Pvt. Ltd.,
 
 36.   Floreat Investments Ltd.,
 
 37.   Flotilla Finance Pvt. Ltd.,
 
 38.   Forvol International Services Ltd.,
 
 39.   Forbes & Company Ltd.,
 
 40.   Forbes Aquamall Ltd.,
 
 41.   Forbes Bumi Armada Ltd.,
 
 42.   Forbes Campbell Finance Ltd., (formerly known as Latham India
       Ltd.,)
 
 43.   Forbes Campbell Services Ltd.,
 
 44.   Forbes Edumetry Ltd.,
 
 45.   Forbes Environ Solutions Ltd.,
 
 46.   Forbes Facility Services Pvt. Ltd.,
 
 47.   Forbes Smart Data Ltd.,
  
 48.   Forbes Technosys Ltd.,
 
 49.   Gallops Developers Pvt. Ltd.,
 
 50.   Gossip Properties Pvt.Ltd.,
 
 51.   Hazarat & Company Pvt.Ltd.,
 
 52.   Hermes Commerce Ltd,.
 
 53.   High Point Properties Ltd.,
 
 54.   Khvafar Investments Pvt. Ltd.,
 
 55.   Joy Car Care Pvt. Ltd.,
 
 56.   Lucrative Properties Pvt. Ltd.,
 
 57.   Magpie Finance Pvt. Ltd.,
 
 58.   Make home Realty & Construction Pvt. Ltd.,
 
 59.   Manjri Developers Pvt.Ltd.,
 
 60.   Manjri Horse Breeders Farm Pvt.Ltd.,
 
 61.   Mazsons Builders & Developers Pvt.Ltd.,
 
 62.   Meriland Estates Pvt.Ltd.,
 
 63.   Mileage Properties Pvt.Ltd.,
 
 64.   Miracletouch Developers Pvt. Ltd.,
 
 65.   Mydream Properties Pvt. Ltd.,
 
 66.   Neil Properties Pvt.Ltd.,
 
 67.   Next Gen Publishing Ltd.,
 
 68.   Palchin Real Estates Pvt.Ltd.,
 
 69.   Phenomenon Developers Pvt. Ltd.,
 
 70.   Precaution Properties Pvt.Ltd.,
 
 71.   PSC Engineers Pvt. Ltd.,
 
 72.   Radiant Energy Systems Pvt. Ltd.,
 
 73.   Range Consultants Pvt. Ltd.,
 
 74.   Relationship properties Pvt. Ltd.,
 
 75.   Renaissance Commerce Pvt. Ltd.,
 
 76.   S.C.Impex Pvt.Ltd.,
 
 77.   Shachin Real Estate Pvt. Ltd.,
 
 78.   Shapoorji & Co.Pvt.Ltd.,
 
 79.   Shapoorji Data Processing Pvt. Ltd.,
  
 80.   Shapoorji Drilling Enterprises Pvt. Ltd.,
 
 81.   Shapoorji Pallonji Finance Ltd.,
 
 82.   Shapoorji Hotels Pvt.Ltd.,
 
 83.   Shapoorji Pallonji Infrastructure Capital Co.Ltd.,
 
 84.   Shapoorji Pallonji Investment Advisors Pvt. Ltd., (formerly known
       as Euphoria Properties Pvt. Ltd.,)
 
 85.   Shapoorji Pallonji International, Fujairah, UAE
 
 86.   Shapoorji Pallonji International, Dafza, UAE
 
 87.   Shapoorji Pallonji Infrastructure (Gujarat) Pvt. Ltd.,
  
 88.   Shapoorji Pallonji Cement (Gujarat) Pvt. Ltd.,
 
 89.   Shapoorji Pallonji Energy (Gujarat) Pvt. Ltd,.
 
 90.   Shapoorji Pallonji (Gwalior) Pvt. Ltd.,
 
 91.   Shapoorji Pallonji Industrial Park Pvt. Ltd.,
 
 92.   Shapoorji Pallonji Ports Pvt.Ltd.,
 
 93.   Shapoorji Pallonji Power Co.Ltd.,
 
 94.   Sharus Building Services Pvt. Ltd.,
 
 95.   Shatranj Properties Pvt. Ltd.,
 
 96.   Simar Engery (Gujarat) Pvt. Ltd.,
 
 97.   Simar Port Pvt. Ltd.,
 
 98.   SP Agri Management Services Pvt.Ltd.,
 
 99.   SP Aluminium Systems Pvt. Ltd.,
 
 100.  SP Architectural Coatings Ltd.,
 
 101.  SP Biosciences Pvt. Ltd.,
 
 102.  SP Fabricators Pvt. Ltd.,
 
 103.  SP Infocity Developers Pvt. Ltd.,
 
 104.  SP Simar Infrastructure Zone Pvt. Ltd.,
 
 105.  SP International
 
 106.  Steppe Developers Pvt. Ltd.,
 
 107.  Sterling Generators Pvt. Ltd.,
 
 108.  Sterling Industries FZ LLC
 
 109.  Sterling and Wilson Ltd.,
 
 110.  Sterling and Wilson International FZE
 
 111.  Sterling and Wilson Powergen Pvt. Ltd.,
 
 112.  SSS Electricals (India) Pvt. Ltd.,
 
 113.  Sunny View Estates Pvt. Ltd.,
 
 114.  Think Ahead Properties Pvt. Ltd.,
 
 115.  United Motors (India) Ltd.,
 
 116.  Universal Mine Developers and Service Providers Pvt. Ltd.,
 
 117.  Volkart Fleming Shipping & Services Ltd.,
 
 118.  Waterwings Equipments Pvt. Ltd.,
 
 13.  LISTING OF SHARES :
 
 The equity shares of the Company are listed on the Bombay Stock
 Exchange Ltd., Mumbai. The Company has paid Listing Fees to the Stock
 Exchange.
 
 15. ACKNOWLEDGEMENT:
 
 Your Company continues to occupy a place of respect amongst the many
 stakeholders it is associated with, most of all, our valued customers.
 The Directors commend the continued commitment and dedication of
 employees at all levels. The Directors also wish to acknowledge the
 co-operation extended by workmen and its Workmen Union. Your Directors
 thank all other stakeholders including Financial Institutions for their
 valuable and sustained support, encouragement and look forward to
 receive similar support and encouragement in the years ahead.
 
                                             For and on behalf of the 
                                                   Board of Directors
 
                                                    SHAPOOR P. MISTRY
                                                             Chairman
 
 Mumbai
 30th May, 2011.
 
 Registered Office :
 1st Floor, 45/3 Gopalkrishna Complex
 Residency Cross Road
 Bangalore – 560 025.