Dear Members,
 
 The Directors have pleasure in presenting the 94th Report on the state
 of affairs of your Company for the financial year ended 31 March 2011,
 together with the audited Balance Sheet and Profit & Loss Account of
 the Company.
 
 Overall Financial Results                             (Rs. In lakh)
 
                             Financial Results   Consolidated Financial
 
                               for the Company           Results
 
                           Year ended 31 March      Year ended 31 March
 
                                 2011     2010          2011       2010
 
 Surplus for the year before
 Finance Charge, depreciation 
 and tax                        19616    16714         23970      20856
 
 Deduct there from:
 
 Finance Charge and 
 depreciation                    1512     1416          5191       5523
 
 Provision for Taxation          5995     3569          5947       3349
 
                                12109    11729         12832      11984
 
 Add Transfer from:
 
 Profit & Loss Account          16565    12204         26248      21746
 
 Total amount available for 
 Appropriation:                 28674    23933         39080      33730
 
 Appropriations:
 
 Proposed Dividend [@ Rs. 
 26.00 per equity share
 (previous year Rs. 23.00 per 
 equity share) of the Company]   4234     3746          4583       3778
 
 Corporate Tax on Dividend        687      622           706        653
 
 Transfer to General Reserve 
 / Minority interest etc.        3000     3000          3045       3051
 
 Surplus carried forward to 
 next year                      20753    16565         30746      26248
 
 Total of Appropriations        28674    23933         39080      33730
 
 Overview
 
 Your Company recorded significant achievements in the year 2010-11,
 some of which are as follows:
 
 - The Company recorded its highest ever Turnover with net sales at Rs.
 2050 crore as against Rs. 1673 crore in 2009-10, marking an increase of
 23% over the previous year.
 
 - Profit Before Tax increased from Rs. 153 crore in 2009-10 to Rs. 181
 crore in 2010-11, an increase of more than 18% over the previous year.
 
 - Profit After Tax increased from Rs.117 crore in the previous year to 
 Rs. 121 crore, in 2010-11, an increase of 3% over the previous year.
 
 - Four business segments viz., Tours & Travel, Industrial Packaging,
 Greases & Lubricants, Logistics Infrastructure & Services stood out as
 the main revenue generators.
 
 Dividend
 
 A dividend of Rs. 26 per equity share of Rs. 10 each [equivalent to
 260%] for the year ended 31 March 2011 -- as against Rs. 23 per equity
 share in the previous year -- has been recommended by the Board of
 Directors for declaration by the Members at the ensuing 94th Annual
 General Meeting to be held on 23 September 2011. The trend of past
 dividend payment is depicted below:
 
 Management Discussion and Analysis Report
 
 An analytical Report on the businesses of your Company is furnished
 along with this report under the heading Management Discussion and
 Analysis.
 
 Report on Subsidiary Balmer Lawrie (UK) Ltd.
 
 Balmer Lawrie (UK) Ltd (''BLUK'') is a wholly owned subsidiary of your
 Company incorporated in the U.K. BLUK was earlier engaged in Leasing &
 Hiring of Marine Freight Containers and Tea Warehousing, Blending &
 Packaging. After exiting these two businesses, the company utilized the
 proceeds to fund other business opportunities.
 
 BLUK has to date invested approximately US $ 1.32 million [including
 US$ 0.14 million in 2010-11], equivalent to Indonesian Rupiah12.30
 billion, representing 50% of the paid- up equity share capital of the
 joint venture company, PT. Balmer Lawrie Indonesia (PTBLI), formed to
 manufacture and market lubricating greases and other lubricants in
 Indonesia.
 
 PTBLI''s plant is in advanced stage of completion and is expected to be
 commissioned by September 2011.
 
 Exemption from attaching accounts of the Subsidiary
 
 In the past the Ministry of Corporate Affairs, New Delhi had exempted
 your Company from attaching with the Company''s Accounts, the Annual
 Accounts of Balmer Lawrie (UK) Ltd pursuant to Section 212(8) of the
 Companies Act, 1956.  Recently, under its General Circular No. 2/
 2011(Ref. No. 5/ 12/2007-CL-III) the Ministry of Corporate Affairs,
 Government of India has stipulated that the provisions for attachment
 of the accounts of the subsidiary shall not apply if the conditions
 specified therein -- including consent of the Board of Directors of the
 concerned company by resolution, for not attaching the Balance Sheet of
 the subsidiary -- are duly fulfilled. These conditions have been duly
 complied with by your Company and the consent of the Board for the
 non-attachment of the subsidiary''s Annual Accounts has also been
 obtained.
 
 However, such accounts have been duly consolidated in terms of
 applicable Accounting Standards and have been shown translated into the
 Indian Rupee.
 
 Report on Joint Ventures AVI-OIL India Private Ltd. (AVI-OIL)
 
 During 2010-11 Avi-Oil has recorded lower sales of Rs. 34 crore as
 against Rs. 40 crore achieved in the previous year. The decline has
 been due to delay in the renewal of the rate contract with its major
 customer and consequent lower off-take.
 
 Avi-Oil participated in the International Aerospace Exposition AERO
 INDIA 2011 at Bengaluru, projecting the theme of ''Self-Reliance''. The
 contribution of Avi-Oil towards indigenisation of aerolubes was well
 appreciated by the visitors.
 
 During the year, Avi-Oil continued to maintain its registrations with
 Director General Aeronautical Quality Assurance, Director General of
 Civil Aviation and other registrations. An audit of Avi-Oil''s
 production, quality assurance and documentation were conducted by Nyco,
 France. To augment its production facilities, Avi-Oil effected several
 improvements in its blending and filling operations and launched a
 novel pack design for certain aerolubes after validation by the
 concerned customers / authorities. Exports of esters to Nyco continued
 and efforts were initiated to develop certain industrial speciality
 products based on the high quality esters.
 
 Balmer Lawrie-Van Leer Ltd. (BLVL)
 
 BLVL''s net sales, inclusive of other income increased to Rs. 17761 lakh
 in 2010-11 from Rs. 15727 lakh in the previous year. The demand for
 Drum Closures both in the local and export market continued to be
 buoyant throughout the year and business improved significantly with
 net sales up by about 11% compared to the previous year. In Plastic
 Containers sales volume of Valerex 20 range increased by 9% over the
 previous year.
 
 During the year 2010-11, the Profit Before Tax of BLVL increased to Rs.
 1005 lakh from Rs. 767 lakh in 2009-10, an increase of 31%.
 
 During the current financial year ICRA Ltd. upgraded BLVL''s Short term
 rating from A2 to A2  and Long term rating from LBBB  to LA –
 reflecting an improvement of its financial health.
 
 Transafe Services Limited (TSL)
 
 TSL achieved a turnover of Rs. 76.4 crore during 2010-11— a fall of
 around 7% compared to the turnover of Rs. 82.47 crore during the
 previous year – and recorded loss (before tax) of Rs. 16.2 crore.
 Performance of TSL during 2010-11 was adversely affected due to severe
 fund crunch faced during major part of the year. While TSL''s turnover
 was broadly in line with the projections made for the year, it recorded
 considerably higher loss largely on account of making provision against
 old un-reconciled debtors. TSL achieved EBIDTA [Earnings Before
 Interest, Depreciation, Tax and Amortization] of Rs. 15.1 crore as
 compared to Rs. -10.9 crore in the previous year.
 
 The business activities of TSL include Leasing of freight containers,
 Logistics services including Warehousing operations, manufacture of
 custom-designed freight containers, Bunk Houses and other container
 derivatives. It is expected that TSL would achieve improved performance
 during 2011-12.
 
 A scheme for restructuring the debts of TSL under the Corporate Debt
 Restructuring (CDR) mechanism was approved in October 2010. In terms of
 the CDR scheme, your Company has infused Rs. 7.8 crore into TSL -- Rs.
 6 crore towards 60,00,000 Cumulative Redeemable Preference Shares
 [CRPS] of Rs. 10 each for cash at par and the balance Rs. 1.8 crore as
 unsecured loan, which would bear interest at the rate of 8.5% per annum
 till March 2015 and 9.5% thereafter. The unsecured loan of Rs. 7.3
 crore earlier provided by the Company in 2009 to TSL, has also been
 converted in to 73,00,000 CRPS of Rs. 10 each at par.
 
 Further to the criminal complaint filed by TSL against Shri Gopal
 Krishna Mukerjea, former Managing Director & CEO of TSL (accused no.1),
 Shri Prithwi Manas Mitra , former Senior Vice President (Finance) of
 TSL (accused no.2) and certain other executives of TSL, it is known
 that the accused no.1 and 2 were arrested on 3rd December, 2010 and
 placed under judicial custody pending investigations. It is gathered
 that they were released on bail on 3rd March 2011. Further action by
 the state in the matter is awaited.
 
 The Company, along with the other shareholder in TSL – Balmer
 Lawirie-Van Leer Ltd (BLVL) - has filed a civil suit against the
 erstwhile majority shareholders represented by ICICI Ventures, before
 the Calcutta High Court on 12th May 2011, seeking relief inter alia to
 the effect that the sale of shares in TSL to the Company and BLVL by
 ICICI Ventures is void entailing consequent restoration of all
 advantages derived by each party from the void contract.
 
 Balmer Lawrie (UAE) LLC (BLUAE)
 
 Despite the continuing effects of the global recessionary conditions,
 difficult local market conditions including intensified competition and
 pressure on product pricing, BLUAE turned in excellent results during
 the year 2010. Prices of main raw materials, viz. CR steel, Tinplate
 and HDPE showed softening trend internationally for most part of the
 year; with HDPE prices staging a mid-year reversal.
 
 BLUAE is bracing itself to face the challenges and maintain its
 pre-eminent position in the market. The company continues to upgrade
 its facilities and systems to achieve process, product and
 technological improvements and further enhance service levels with the
 aim of strengthening its position as the most preferred vendor to
 customers in the region, maintaining the highest level of business
 ethics and dependability.
 
 Memorandum of Understanding (MoU)
 
 Your Company enters into an MoU with the Government of India, Ministry
 of Petroleum & Natural Gas (MOP & NG) every year detailing therein
 various targets on operational, financial and efficiency parameters,
 customer satisfaction, human resource development etc. The Company''s
 performance vis- a-vis the agreed targets, is evaluated at the year-end
 by the Government of India, Department of Public Enterprises, (DPE).
 It is a matter of pride to report that the performance score in respect
 of the MoU for the year 2009-10 has been adjudged to be in the highest
 rating category i.e. Excellent by DPE.
 
 The MoU criteria for 2011-12 includes a number of new criteria like
 Corporate Social Responsibility and Corporate Governance as per
 directions received by the Company from MOP&NG.
 
 Human Resource Management
 
 Human Resource strategy of the Company devolves around managing talent,
 developing leadership & managerial competencies, managing employee
 performance and enhancing employee engagement. Towards achieving these
 objectives, the Company put in place the following initiatives during
 2010-11:
 
 Talent Acquisition
 
 During the year, besides inducting 27 professionals at various levels
 in the executive cadre to fill the talent gap, the Company also
 inducted 15 Executive Trainees and 5 Supervisory Trainees through the
 campus recruitment process.
 
 Training and Development
 
 Your Company believes in continuously honing the skills and
 competencies of the people with the objective of creating a leadership
 pipeline. With this objective in mind, the Company planned and
 organized exhaustive training programmes for its employees: both in
 General Management as well as in specialist skill development focusing
 on the requirement of the businesses. Whereas 443 man- days of internal
 training activity were undertaken, 35 employees were sent for
 specialized external programmes during the year.
 
 Managing Performance
 
 In order to enhance role clarity and improve on-the-job performance, a
 Role Directory, covering all positions in the Executive cadre was
 rolled out in the year under report. Further, the Performance Appraisal
 System for Executives has been redesigned and made more robust with the
 objective of establishing greater direct linkage between individual
 tasks and overall goals & objectives of the Company.
 
 Employment of Special Categories
 
 The actual number of employees belonging to special categories,
 Group-wise, as on 31st March 2011 is given below:
 
 Group  Regular    SC    ST    OBC  Physically  Women  Minorities 
        Manpower               [*]  Challenged
        as on 31
        March 2011
 
 A        391      31     4     17       1         29      7
 
 B        264      29     2     23       2         35     14
 
 C        148      24     2     12       3         18      5
 
 D        614      85    10     21       6          6     95
 
 Total   1417     169    18     73      12         88    121
 
 [*] Recruited on and from 8th September, 1993 onwards being the date
 from which OBC reservation was made applicable.
 
 Employee Relations
 
 The Company believes in open and transparent policy in dealing with the
 collectives. The terms and conditions of service are finalized through
 bilateral discussions. Employees are represented in Trusts formed by
 the Company to administer various employee welfare schemes.
 
 Discussions on the Long Term Settlements covering the wages, allowances
 and benefits of the unionized employees are in progress at all
 locations of the Company.
 
 Employee relations continued to be cordial at all units / locations and
 during the year, there was no major instance of industrial unrest at
 any location of the Company.
 
 Implementation of The Persons with Disabilities
 
 [Equal Opportunities, Protection of Right and Full Participation] Act,
 1995
 
 In compliance with the above Act, the Company has identified positions
 for recruitment of persons with disabilities. Action for recruitments
 is being initiated fill up the shortfall.
 
 Implementation of Official Language
 
 To ensure implementation of Rajbhasha policy of the Government of
 India, the Company has taken several steps to promote usage of Hindi in
 official work. Various activities like workshops, meetings, etc. were
 organized during the year and the Rajbhasa Pakhwada was celebrated at
 all locations of the Company. Employees were also nominated for Praveen
 and Pragya examinations. The Company also took the lead in organizing
 an Official Language workshop in Mumbai for the Town Official Language
 Implementation Committee. The Official Language Committee of the
 Parliament inspected the Delhi Office of the Company and expressed its
 satisfaction with the manner of Hindi implementation in the Company.
 
 Women Empowerment
 
 The Company not only provides equal opportunities for women in
 employment but also ensures that the requisite work ambience exists for
 women employees at all locations.  The percentage of women employees
 amongst the new recruits is on the rise.
 
 Progress on principles under ''Global Compact''
 
 Your Company is a founder member of the Global Compact, and it remains
 committed to further the principles enumerated under the Global Compact
 programme. The details of various initiatives taken in this regard can
 be found in the Communication of Progress uploaded on the website of
 the Company.
 
 Vigilance
 
 The Company is committed to ethical conduct of business.  The main
 thrust of Vigilance administration is to create a culture of integrity
 and probity in the organization. In order to bring about a fair and
 transparent environment, surveillance inspections were carried out in
 the various units of the Company to detect corruption and recommend
 remedial measures. Punitive and deterrent action, where required, is
 also undertaken.
 
 In the interest of inculcating transparency in the award of contracts,
 tender documents and list of contracts awarded during the month are
 uploaded on the website of the Company.  Preventive vigilance and
 various systems improvement activities were also undertaken by the
 Vigilance Department in order to ensure optimal utilization of
 resources of the Company and maximization of shareholder value.
 
 Compliance of Right to Information Act, 2005
 
 The Right to Information Act, 2005 (the RTI Act) is applicable to the
 Company. In accordance with the provision of the RTI Act, various
 disclosures of information, which are mandatory, have been set out on
 the website of the Company. Additionally, the Company furnishes monthly
 as well as annual reports within prescribed time line to the Ministry
 of Petroleum & Natural Gas, Government of India pertaining to requests
 for information received under the RTI Act. Monthly reports are being
 placed on the website from June 2011 pursuant to the advice received
 from the Ministry aimed at strengthening implementation of the RTI Act.
 
 An extract of the Annual Return for the financial year 2010-11 as
 furnished to the Administrative Ministry is set out below for
 information of the Members:
 
                                     Progress in 2010-11
 
           Opening  Received      No. of 
                                  cases     Decisions  Decisions 
           Balance 
           as       during the
                     Year         transfer
                                   -red to    where      where
           on 01/
           04/      (including 
                      cases       other 
                                  Public     requests/  requests/
           2010     transferred 
                         to      Authorities  appeals    appeals
                      other 
                      Public                 rejected   accepted
                    Authority)
 
 (1)        (2)         (3)          (4)        (5)        (6)
 
 Requests    1           35          NIL         2         34
 
 First
 Appeals     0            5          NIL         –          5
 
 The rejections mentioned in Column 5 were made considering the
 exemptions from disclosure of information as envisaged in Section 8 of
 the RTI Act.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange
 
 Earnings and Outgo
 
 As required under Section 217 (1) (e) of the Companies Act, 1956, (the
 Act) read with Rule 2 of the Companies (Disclosure of Particulars in
 the Report of the Board of Directors) Rules, 1988, the information is
 annexed.
 
 Directors'' Responsibility Statement
 
 Pursuant to the requirement under Section 217 (2AA) of the Act, it is
 hereby confirmed:
 
 (i) That in the preparation of the accounts for the financial year
 ended 31 March 2011, the applicable accounting standards have been
 followed and there was no departure from such standards;
 
 (ii) That the Directors have selected such accounting policies and
 applied them consistently and made judgment and estimates that were
 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 on 31 March
 2011 and of the profit of the Company for the said financial year;
 
 (iii) That the Directors 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 detecting and preventing fraud and other irregularities;
 
 (iv) That the Directors have prepared the accounts for the financial
 year ended 31 March 2011 on a ''going concern basis''.
 
 Consolidated Financial Statement
 
 The financial statements of your Company have been duly consolidated
 with its subsidiary and joint ventures in pursuance of Clauses 32, 41
 as well as 50 of the Listing Agreement with the Stock Exchanges. For
 the purpose of such consolidation, the Accounting Standards –
 especially, AS 21 and 27 – have been adhered to.
 
 Report on Corporate Governance
 
 A detailed report on the Corporate Governance compliance is also
 furnished with this Report as required under Clause 49 of the Listing
 Agreement with the Stock Exchanges along with the Auditor''s Certificate
 regarding Compliance of the conditions of Corporate Governance.
 
 Particulars of Employees
 
 During the financial year 2010-11, the Company did not have any
 employee who received remuneration at a rate of Rs. 5,00,000 or more
 per month or Rs. 60,00,000 per annum.  Therefore, the disclosure
 pursuant to the provisions under Section 217(2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules, 1975,
 has not been made.
 
 Comments of Comptroller & Auditor General of India
 
 The comments of the Comptroller & Auditor General of India, under
 Section 619(4) of the Companies Act, 1956 on the Accounts of the
 Company for the financial year ended 31 March 2011 is set out elsewhere
 in the Annual Report.
 
 Directors
 
 In accordance with the provisions of Article 12 of the Articles of
 Association, Shri VLVSS Subba Rao, Shri K C Murarka, Shri Arun Seth and
 Shri M P Bezbaruah would retire by rotation at the ensuing Annual
 General Meeting and they are eligible for reappointment at the said
 Meeting.
 
 A Brief Profile of the above Directors appears elsewhere in the Report.
 
 The six Independent Directors of the Company – viz., Shri K C Murarka,
 Shri Arun Seth, Shri M.P.Bezbaruah, Shri P.K.Bora, Prof. Asish K.
 Bhattacharyya and Smt. Abha Chaturvedi – had been appointed on 26
 December 2008 inter alia pursuant to the direction / advice of the
 Ministry of Petroleum & Natural Gas, Government of India under Article
 7A of the Articles of Association of the Company. As the tenure of
 Independent Directors would expire on 25 December 2011 on completion of
 their approved term, application has been made to the Ministry for
 appointment of Independent Directors or renewal of term of office of
 the existing Independent Directors.
 
 The Company has received an advice dated 29 July 2011 from the Ministry
 of Petroleum & Natural Gas, Government of India, being the
 Administrative Ministry, intimating that the Competent Authority has
 concurred with the proposal for re- designation of the post of Managing
 Director of the Company as Chairman & Managing Director. In terms of
 the said letter and as per resolution passed by the Board at its
 meeting held on 11 August 2011, Shri S K Mukherjee, Managing Director
 has been re-designated as Chairman & Managing Director of the Company
 with effect from 29 July 2011 with all other terms & conditions of his
 appointment remaining unchanged.
 
 Auditors
 
 Your Company being a Government Company, Auditors are appointed or
 reappointed by the Comptroller and Auditor General of India in terms of
 Section 619(2) of the Companies Act, 1956. The remuneration of the
 Auditors for the year 2011- 12 is to be determined by the members at
 the ensuing Annual General Meeting as per Sections 224(8)(aa) and 619
 of the Act.
 
 Auditors'' Report
 
 Members may note that the Auditors'' Report dated 28 May 2011 for the
 year ended 31 March 2011 does not contain any reservation or
 qualification. However, the Statutory Auditors had made the following
 observations in their Report.
 
 QUOTE
 
 ICICI Venture Fund Management Co. Ltd. exited the joint venture unit,
 Transafe Services Ltd. [TSL] with full benefits without retaining any
 right of recovery on the part of Balmer Lawrie & Co. Ltd. [BL] for
 possible losses. Specific joint venture agreement between BL and ICICI
 specifying the exit clause, important for any joint venture agreement
 could not be provided.
 
 Consequent to exit of ICICI Ventures from TSL, the entire financial
 burden fell upon and/or assumed by Balmer Lawrie & Co. Ltd.(BL) for
 arranging necessary fund for settling the accounts of ICICI Ventures
 with premium as well as bringing in new partner namely Balmer Lawrie
 Van Leer Ltd. (BLVL), another unit of joint venture arrangement with
 BL.
 
 Investment of Rs. 553.28 lakhs during the previous year, a fresh
 further investment of a sum of Rs.1330.00 lakh during the current year
 by way of acquiring preference shares in TSL and providing unsecured
 loan of Rs. 1817.92 lakh to BLVL for the purpose of purchase of shares
 held by ICICI Venture, was done without going through a process of Due
 Diligence. In addition, the interest falling due for payment as on
 31/3/2011 has also been not serviced. Therefore, in our opinion, all
 these investments totalling to Rs. 3701.20 lakh appear to be
 prejudicial to the interest of the Company.
 
 UNQUOTE
 
 Explanatory Management Reply as approved by the Board:
 
 During the year the Company has invested Rs. 6 crore towards
 subscriptions to Convertible Redeemable Preference Shares (CRPS) in
 addition to converting earlier loan of Rs. 7.30 crores to CRPS. Further
 the Company has extended an unsecured loan of Rs. 1.80 crore during the
 year to TSL. These have been done in compliance with the Company''s
 obligation as Promoter to TSL under the restructuring scheme approved
 under the CDR mechanism.
 
 In 2009-10 the Company has acquired the shares held by two Funds
 represented by the respective Trustees and acting through their
 Investment Manager, ICICI Venture Fund Management Co. Ltd.
 [collectively referred to as ICICI Ventures] in Transafe Services Ltd.
 (TSL), a joint venture of the Company when ICICI Ventures desired to
 exit from TSL. Looking at the business prospects of TSL, increasing
 Company''s holding in TSL to 50% was considered as an appropriate
 strategy to strengthen its presence in the logistics business.
 
 The Company did not engage an external agency for due diligence
 considering the fact that TSL was a group company.  However, as a
 normal practice it carefully assessed the financials based on audited
 financial statements of TSL and additional Board level information
 available to the Company.  Subsequent to the Company increasing its
 holding in TSL to 50% and exit of ICICI Ventures, the accounting fraud
 was detected and criminal cases have been filed against TSL''s erstwhile
 Managing Director, Chief Financial Officer and others. A plaint has
 also been filed before the Calcutta High Court against ICICI Venture
 for appropriate remedies.
 
 The Shareholders'' Agreement of TSL had an exit clause specifying the
 procedure for finalization of the exit price, which was adhered to in
 the process.
 
 Considering the above factors, investments made by the Company in TSL
 are not prejudicial to the interest of the Company and are expected to
 create value for shareholders and other stakeholders in the long run.
 
 The Statutory Auditors also commented in their Audit Report that the
 internal control system as regards management of debtors and generation
 of scrap by the manufacturing units of the Company needs to be further
 strengthened.
 
 Explanatory Management Reply as approved by the Board:
 
 The Company has a system of review of debtors on a periodic basis at
 various levels of the organisation and all outstanding debts are
 followed up for collection regularly. Major parts of the debts of the
 Company are outstanding from PSUs/ Government and there are often
 delays in getting payments.  However, the comments of the Statutory
 Auditors have been noted and the Company will make efforts for further
 strengthening of follow-up and monitoring system.
 
 As regards management of scrap generation, the Company has a well laid
 down system, comparable to that practiced in similar industries, for
 monitoring/disposal of such manufacturing scrap. In view of the
 observations of the Statutory Auditors such procedure will be reviewed
 during 2011-12 and improvements to the extent feasible, would be
 incorporated.
 
 The Statutory Auditors further observed in their Audit Report that in
 their opinion, the Company''s present internal audit system as conducted
 in phased manner, by a firm of chartered accountants, is commensurate
 with its size and nature of its business but the same needs to be
 strengthened with regard to widening the coverage of various areas like
 investments made and its follow-up and in the matter of scrap
 management.
 
 Explanatory Management Reply as approved by the Board:
 
 The scope of Internal Audit was strengthened during the year and was
 considered fairly adequate. However, the Company, as a practice,
 reviews the scope of the Internal Audit programme on a yearly basis and
 effects modifications/ improvements as deemed necessary and that the
 observations of the Statutory Auditor would be duly considered during
 such review.
 
 The Statutory Auditors have also opined that the Balance Sheet of the
 Company as at 31 March 2011 and the Profit & Loss account and the Cash
 Flow Statement for the year ended on that date are in agreement with
 the books of account and comply with the Accounting Standards referred
 to in Section 211(3C) of the Act.
 
 Acknowledgement
 
 The Company''s Board is focused on creation of enduring value for all
 stakeholders utilizing multiple drivers of growth in the form of the
 diverse Strategic Business Units of the Company.
 
 Your Directors wish to place on record their appreciation of the
 support and confidence reposed in the Company by the customers and the
 dealers who have contributed towards customer-satisfaction. The
 Directors also acknowledge the contribution of the employees and their
 co-operation, dedication, commitment and perseverance towards
 achievement of new performance milestones. The Directors would also
 wish to thank the vendors, business associates / consultants, bankers,
 auditors, solicitors and all other stakeholders for their unstinted
 support to the Company.
 
 The Directors are also thankful to Balmer Lawrie Investments Ltd. (the
 Holding Company) and the Ministry of Petroleum & Natural Gas,
 Government of India, for the valuable guidance, support and
 co-operation extended to the Company.
 
 Finally, the Directors also wish to place on record their special
 appreciation to the valued Shareholders of the Company for their
 support.
 
 Registered Office:                 On behalf of the Board of Directors
 
 Balmer Lawrie House                                      S K Mukherjee
 
 21 Netaji Subhas Road                     Chairman & Managing Director
 
 Kolkata – 700 001.
 
 Date : 11 August 2011                                    K Subramanyan
 
                                                     Wholetime Director