The Directors present the Company's Seventeenth Annual Report and the
 Audited Accounts for the year ended March 31, 2000.
 
 The financial result for the year under report are as under :
 
                                                            Rs. in Lakhs
 
 Gross Income                                                    1191.15
 
 Gross Profit/(Loss)                                            (187.04)
 
 Add : Depreciation                                               730.28
 
 Add : Miscellaneous & Preliminary Expenses Written off               5.75
 
 Profit/(Loss) before tax                                       (923.07)
 
 Provision for tax                                                  0.00
 
 Profit/(Loss) after Tax                                        (923.07)
 
 Add : Surplus / (Deficit) of previous year                    (5452.11)
 
 Add : Prior period / other adjustments                            0.00
 
 Surplus / (Deficit) carried to Balance Sheet                  (6375.19)
 
 OPERATIONS 
 
 Major Industries like Engineering, Textiles, Cement and Steel to which
 the company has exposure did not show any signs of revival and thus
 recoveries from the said sectors continued to be sluggish.  The real
 estate market in Bangalore. Mysore and Goa also did not show any signs
 of revival.  In the meantime, due to negative sentiments against the
 NBFCs pressure on repayment of deposits continued to buildup thus
 stretching tight liquidity conditions faced by the company resulting in
 default in repayment of deposits by the company.
 
 As a result, the Reserve Bank of India (RBI) during August, 199
 prohibited the company from acceptance of public deposits.  Further,
 the RBI vide letter dated August 13, 1999 directed the company not to
 sell, transfer, create charge or mortgage or deal in any manner with
 its properties and assets without prior permission of the RBI.  The
 said directions have been extended until further orders by RBI vide
 letter dated August 12, 2000.
 
 The RBI in September, 1999, rejected the Company's Application for
 registration as a Non-Banking Financial Institution.  The Company has
 however appealed to the Central Government, having been aggrieved by
 the order of rejection by the RBI.  The appeal has been admitted and is
 pending disposal.  In the meantime, the company has not been able to
 carry on its normal business activities of Lease / Hire Purchase etc.
 during the year.
 
 Further the RBI has appointed a Special Officer with effect from
 September 1, 1999 for the purpose of overseeing the activities of the
 Company, ensuring compliance with the statutory requirements and also
 to prevent the affairs of the Company from deteriorating further.
 
 Consequent to the rejection of the application for registration and the
 prohibition imposed on acceptance of public deposits, RBI filed a
 petition in the High Court of Karnataka seeking winding up of the
 Company.  The Hon'ble High Court of Karnataka has however, stayed the
 Windingup Petition filed by the RBI.
 
 In order to make repayment of deposits, the company filed a Scheme for
 reschedulement of deposits, in response to the applications filed by
 the Depositories with the Company Law Board (CLB) Southern Bench,
 Chennai.  The Hon'ble Southern Regional Bench of the Company Law Board,
 Chennai passed an order during March 2000 relating to the scheme of
 repayment to the depositories.  The Company after having considered
 various aspects of the Order of the CLB, filed an application seeking
 clarification/modification to the orders in respect of rate of interest,
 repayment period and such other matters.  The CLB however, returned the
 application of the company saying that CLB had no inherent powers for
 review of its own order.  In view of this, the company field an appeal
 in the High Court of Karnataka seeking revision/modification of the CLB
 Order, with regard to rate of interest, period of repayment, etc. which
 has been admitted and the matter is likely to be listed for final
 hearing.
 
 In the meantime, Bank of India and other Members of the Consortium of
 Banks, filed an petition, before the Hon'ble High Court of Judicature
 at Chennai seeking stay of the Order passed by the Southern Regional
 Bench, Company Law Board, Chennai.  The High Court of Judicature at
 Chennai has dismissed the said petition as not maintenance.
 
 Simultaneously, an appeal was also filed in the High Court of
 Karnataka, by the United Western Bank Ltd (Consortium Member) seeking
 stay of the CLB Order.  The Hon'ble High Court of Karnataka has, since,
 stayed the CLB Order.  The matter however is likely to be listed for
 final hearing.
 
 The Consortium of Banks have also filed an application before the Debt
 Recovery Tribunal seeking repayment of their dues.
 
 Certain aggrieved depositors have also sought remedy under the Consumer
 Protection Act in respect of non-repayment of deposits.
 
 Despite the adverse conditions as stated above and the difficult
 financial conditions, the company has commenced revival efforts.
 During the year recoveries from the Property Development division out
 of projects at Bangalore, Mysore and Goa amounted to Rs. 1.90 crores.
 The properties worth about Rs. 1 crore have been completed based on
 agreements with Civil Contractors keeping deployment of funds to the
 minimum. 72 flats amounting to about 1,00,000 sq.ft has been completed
 and handed over.
 
 In view of the restriction on the company as to carrying on of business
 activities, a proposal ha been made for completion of the incomplete
 projects on joint venture basis subject to the approval of RBI.  This
 would enable the company to complete the projects while releasing cash
 flows for repayment of deposits.  In response, the RBI has informed the
 company, that permission of the High Court of Karnataka be sought for
 implementation of the proposal and sale of the estate projects in
 question.
 
 During the financial year the company has been successful in achieving
 recoveries of about Rs. 15 crores form corporates who have availed
 Lease, Hire Purchase and other facilities.
 
 The Directors recognise that while effective recovery of NPAs is
 important, commencing new activity which will improve the overall cash
 flows of the company is very crucial.  Accordingly, consequent to the
 amendments of the main objects of the company steps have also been
 initiated for entry into I.T. enabled services.  An MOU has been
 entered into with an overseas company for development of the Company's
 Property at Pune into an Intelligent I.T. Centre.  The company is also
 examining proposals both for trading and development of software.
 Arrangements are also being finalised with leading mutual funds and
 finance companies for distribution of their financial products like
 bonds, mutual fund units, Auto and home Loans etc. The commencement of
 the new activity is subject to the approval of the Reserve Bank of
 India.
 
 PUBLIC DEPOSITS
 
 During the year Public Deposits to the tune of Rs. 830.72 lakhs were
 repaid and outstanding liabilities stood at Rs. 9755.15 lakhs as of 31st
 March, 2000.  The repayment of deposits shall be subject to the order
 passed b y the Company Law Board, Chennai which has been stayed by the
 High Court of Karnataka on a petition filed by the United Western Bank
 Limited.
 
 DIVIDEND
 
 In view of the losses for the year under report, the Directors do not
 recommend any dividend on the Equity Share Capital.
 
 In view of the operating losses, no dividends are recommended on the
 Redeemable Cumulative Preference Shares for the year ended March 31,
 2000.  The dividends, however, stand accumulated.
 
 DIRECTORS
 
 Sri. Manohar Singh Rathore retires by rotation and being eligible
 offers himself for re-appointment.
 
 SUBSIDIARY COMPANY
 
 Pursuant to Section 212 of the Companies Act, 1956, the Annual Accounts
 of Kirloskar Developers and Builders Limited, Bangalore for the year
 ended March 31, 2000 is attached.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 The details relating to conservation of energy, etc. are set out in the
 Annexure forming a part of this report pursuant to Section 217 (1)(e)
 of the Companies Act, 1956.
 
 PARTICULARS OF EMPLOYEES
 
 Particulars of Employees in terms of the requirement of Section 217(2A)
 of the Companies Act, 1956, are set out in the Annexure forming part of
 this Report.
 
 AUDITORS
 
 M/s. Pipara & Co., Chartered Accountants, Ahmedabad retire and are
 eligible for re-appointment.  A certificate has been furnished by them
 to the effect that their appointment, if made, would be within the
 limits prescribed under Section 224 (1-B) of the Companies Act, 1956.
 
 COMPULSORY DEMATERIALISATION
 
 Securities and Exchange Board of India has brought the trading of the
 Company's shares under Compulsory Dematerialised Trading by all
 investors with effect from 8.5.2000 obligating shareholders to exercise
 demat option to derive the benefits of scripless trading.
 
 DISCLOSURE UNDER CLAUSE 49 OF LISTING AGREEMENT
 
 Information as required under Clause 49 of the Listing Agreement is set
 out hereunder :
 
 1. The Company's securities have not been de-listed by any of the Stock
 Exchanges during the year.
 
 2. The securities of the Company are presently listed with the
 following Stock Exchanges :
 
 A. THE BANGALORE STOCK EXCHANGE LTD
 
 Stock Exchange Towers
 51, 1st Cross, J C Road
 Bangalore - 560 027
 
 b. THE STOCK EXCHANGE, MUMBAI
 
 Phiroze Jeejeebhoy Towers,
 Dalal Street
 Mumbai - 400 001
 
 3. The Company has paid the annual listing fees to each of the above
 Stock Exchanges.
 
 Information as per Section 217 (1)(e) of the Companies Act, 1956 read
 with the Companies (Disclosure of Particulars in the report of the
 Board of Directors) Rules 1988 of the year ended 31st March, 2000.
 
 A. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
 
 The Company has no activities relating to Conservation of Energy or
 Technology Absorption.
 
 B. FOREIGN EXCHANGE EARNINGS AND OUTGO - NIL