To the Members,
 
 The Directors have the pleasure in presenting their 10th Annual Report
 together with the audited Balance Sheet and Profit & Loss Account for
 the financial year ended 31st March 2011.
 
 Socio Economic Environment
 
 India is one of the world''s fastest growing economies. Our country
 offers several economic advantages to its nationals as well as foreign
 investors. The Country''s rise as an Asian economic powerhouse over the
 years has been quite remarkable. Economic conditions in India have
 become quite conducive towards meeting the wants of a wider cross
 section of people.
 
 With economic liberalization of India in 1990s, the nation started
 generating a lot of interest among foreign investors.  A rapidly
 developing economy coupled with favorable attitude of the Government of
 India towards foreign investors, have attracted substantial foreign
 direct investments to India.
 
 Ernst & Young had carried out a survey in June 2008, which identified
 India as the fourth most attractive investment destination of the
 world. All this augurs well for the Indian economy.
 
 On the downside, inflation in India is a matter of serious concern and
 rose to more than 13 percent in June 2010. But due to Government
 measures and role played by the Reserve Bank of India, high inflation
 was brought down to a level of about 8.62 percent in June 2011.
 
 Company''s Performance
 
 The performance of your Company is greatly dependent upon two issues,
 one being, amount of dividend received from its subsidiary, Balmer
 Lawrie & Co. Ltd. (''BL'') and the other being interest received from
 deployment of its surplus funds with scheduled commercial banks. In
 other words, financial performance of BL and interest prevailing at the
 time of deployment of surplus funds, are two issues, which are central
 to the performance of your Company. The interest rates have increased
 slightly as compared to the previous year 2009- 10. The quantum of
 dividend received from the subsidiary, for the financial year 2010-11,
 too was higher as compared to the dividend received during the
 financial year 2009-10.  The above two factors have contributed higher
 profit for the financial year 2010-11, as compared to the Profit for
 the financial year 2009-10.
 
 Financial performance of your Company, for the year under review,
 2010-11, as compared to the immediately preceding year, i.e., 2009-10,
 is enumerated below:
 
 Financial Results
 
                                                 (Rs. in lakhs)
 
                                             Year ended on 31st March
 
                                                  2011           2010
 
 Surplus for the year before
 Tax                                           2484.64        2170.24
 
 Provision for Taxation                          61.82          59.03
 
 Net Profit                                    2422.82        2111.21
 
 Dividend
 
 Your Directors are now pleased to recommend, for declaration, a
 dividend of Rs. 8.50 (Rupees Eight and paise fifty only) per Equity
 share of Rs. 10/- each, fully paid-up, i.e., 85%, for the financial
 year ended 31st March 2011, as against dividend of Rs. 7.60 (Rupees
 Seven and paise Sixty only) per Equity share of Rs. 10/- each, fully
 paid-up, paid in the previous financial year ended 31st March 2010.
 Subject to declaration at the ensuing Tenth Annual General Meeting,
 dividend will be paid to those Shareholders who are holding the shares
 as on the date of the commencement of the Book closing period, i.e., on
 16th September 2011. In respect of shares held electronically, dividend
 will be paid to the beneficial owners - as per details furnished by the
 Depositories, i.e., Central Depository Services (India) Ltd. and
 National Securities Depository Ltd.
 
 Appropriations
 
 Balance Profit amounting to Rs. 118.02 lacs, has been brought forward
 from the financial year 2009-10. This together with Net Profit for the
 financial year 2010-11, aggregates to Rs. 2540.84 lacs, which has been
 appropriated as given hereunder, against the backdrop of the
 appropriations of Rs. 2227.26 lacs, for the immediately preceeding
 financial year 2009-10:
 
 Appropriations                                 (Rs. in lakhs)
 
                                           Year ended on 31st March
 
                                                2011           2010
 
 Proposed dividend @ Rs. 8.50                1886.77        1686.99
 (Rupees Eight and paise fifty only)
 per Equity share [Previous year
 dividend @ Rs. 7.60 (Rupees
 Seven and paise sixty only)
 per Equity share of Rs. 10/- each
 fullypaid-up, was declared]
 
 Corporate Tax on Dividend                         0              0
 
 Transfer to Reserve Fund                     484.57         422.25
 
 Surplus carried forward
 to the next year                             169.50         118.02
 
 Deposits with Banks
 
 Surplus funds of the Company have been deployed in the Fixed Deposit
 Schemes of the Banks. As at 31st March 2011, the total amount of
 deployment in the Fixed Deposit Schemes of Schedule Banks stood at Rs.
 3900 lakhs, which in turn has yielded interest income to the tune of
 Rs. 214.94 lakhs.
 
 Management Discussion and Analysis Report
 
 Your Company is not engaged in any other business activity, except, to
 hold the Equity shares of Balmer Lawrie & Co. Ltd.  and accordingly
 matters to be covered under ''Management Discussion and Analysis
 Report'', are not applicable to your Company.
 
 Report on Subsidiary Companies
 
 In terms of Sections 4(1)(b)(ii) and 4(1)(c) of the Companies Act, 1956
 (''the Act''), your Company has two subsidiary companies, namely, Balmer
 Lawrie & Co. Ltd. (''BL'') and Balmer Lawrie (UK) Ltd. (''BLUK''). By
 virtue of your Company''s shareholding in BL (61.8%), your Company is
 the holding Company of the latter. BL has one subsidiary company, which
 is a foreign company, namely, BLUK, which in turn under Section 4(1)(c)
 of the Act, is also a subsidiary of your Company.
 
 It is understood that BL, in terms of the recent General Circular No.
 2/2011 (Ref. no. 5/12/2007 – CL III) of the Ministry of Corporate
 Affairs, has complied with the conditions, including obtaining consent
 from its Board of Directors for non- attachment of its subsidiary''s
 accounts. Further, it is understood that BL is presenting the Annual
 Accounts of its subsidiary, BLUK, in Indian currency and has
 consolidated its financial statement with that of the above-referred
 foreign subsidiary company.
 
 Your Company in terms of Section 212(1) of the Act has attached a copy
 of the Annual Report and Accounts of BL.
 
 Further your Company has furnished the Annual Accounts of BLUK in the
 manner as was dealt in the Annual Report of BL.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings & Outgo Section 217 (1) (e) of the Companies Act, 1956, read
 with Rule 2 of the Companies (Disclosure of Particulars in the Report
 of the Board of Directors) Rules, 1988, dealing with the disclosures
 about the above matters, are not applicable to your Company.
 
 Particulars of Employees
 
 Your Company has no employee in the category to report under Section
 217 (2A) of the Companies Act, 1956, read with the Companies
 (Particulars of Employees) Rules, 1975.
 
 Directors'' Responsibility Statement
 
 Your Directors acknowledges the responsibility for ensuring compliance
 with the provisions of Section 217 (2AA) of the Companies Act, 1956, in
 preparation of the Annual Accounts of your Company for the financial
 year ended 31st March 2011 and confirm that:
 
 (i) in the preparation of the accounts for the financial year ended
 31st March 2011, the applicable Accounting Standards have been followed
 and there was no material departure from such standards;
 
 (ii) 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, as at the end of the financial year on 31st March 2011
 and of the Profit of the Company for the said financial year;
 
 (iii) 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 preventing and detecting fraud and other irregularities; and
 
 (iv) the Directors have prepared the Accounts for the financial year
 ended 31st March 2011, on a ''Going Concern basis''.
 
 Consolidated Financial Statement
 
 The investment in Equity shares of your Company''s in its subsidiary,
 Balmer Lawrie & Co. Ltd. (''BL''), was intended to be temporary and as of
 now there is no change in such intention. Thus in terms of paragraph
 11(a) of the Accounting Standard-21, issued by the Institute of
 Chartered Accountants of India (''ICAI''), the annual financial statement
 of your Company has not been consolidated with the financial statement
 of its subsidary, i.e., BL and group compaines of BL, i.e., subsidary
 and joint ventures of BL, which in turn fall under the same group that
 of your Company.
 
 However, the nature of equity share holding of BL in BL''s subsidiary
 and joint venture companies are not temporary in nature and therefore
 BL, in terms of the Accounting Standards 21 and 27, issued by ICAI read
 with Clause 32 of the Listing Agreement of the Stock Exchanges, has
 consolidated its financial statement with that of its subsidiary and
 joint venture companies, which has been duly audited by BL''s Statutory
 Auditors. In order to provide an insight about the group''s financial
 performance, such Consolidated Financial Statement of BL along with the
 Report of the Auditors, is annexed hereto.
 
 Corporate Governance
 
 Your Company''s Equity Shares are listed with the Stock Exchanges since
 the year-end 2002 & early 2003. Since the days of initial listing, your
 Company has consistently abided by the various regulations of the Stock
 Exchanges, including the regulations on Corporate Governance, as
 provided under Clause 49 of the Listing Agreement. A separate section
 titled ''Corporate Governance Report'' is furnished in ''Annexure 1''.
 
 In terms of Clause 49 of the Listing Agreement, the Statutory Auditors
 have examined the compliance of Corporate Governance guidelines and
 issued a certificate, which is annexed to this Report and marked as
 ''Annexure 2''.
 
 We understand that necessary steps are being taken by the
 Administrative Ministry, i.e. Ministry of Petroleum & Natural Gas
 (MOP&NG) for induction of adequate number of independent Directors on
 the Board of Directors (''the Board'') and Audit Committee of your
 Company.
 
 Further, we would like to report that the Board and the Audit Committee
 met three times instead of four times and as such on one occassion the
 gap was more than the stipulated period of four months. The above non
 compliance was due to delay in replacement of the erstwhile directors,
 who were nominees of the erstwhile Administrative Ministry, namely,
 Department of Disinvestment, Ministry of Finance, with the present
 directors, who are nominees of the present Administrative Ministry,
 MOP&NG.
 
 Directors
 
 Last year''s Directors'' Report, covered changes in composition of the
 Board till the date of Reporting, i.e., till 25th August 2010, which
 formed a part of your Company''s Annual Report for the financial year
 2009-10. Thereafter there has been no change in composition of the
 Board.
 
 Shri P. Kalyanasundaram, a nominee of the Government of India was
 appointed Director with effect from 13th October 2008 and subsequently
 designated as the Chairman of the Board with effect from 27th October
 2008. Shri P.  Kalyanasundaram will retire by rotation at the ensuing
 10th Annual General Meeting and has expressed his willingness to be
 re-appointed, as a Director of your Company.
 
 Auditors
 
 Your Company pursuant to Section 617 of the Companies Act, 1956, is a
 ''Government Company''. Being a Government Company, the power to appoint
 the Statutory Auditors of your Company, lies with the Comptroller &
 Auditor General of India (''CAG'').
 
 Though the power of such appointment/re-appointment lies with CAG, in
 terms of Sections 224(8) (aa) and 619 of the Companies Act, 1956, the
 privilege of determining/fixing remuneration of the Statutory Auditors
 of a Government Company vests with the members.
 
 Thus the proposal of fixing remuneration of the Auditors, has been
 included under Ordinary Business in the Notice convening the 10th
 Annual General Meeting of your Company.
 
 The amount of remuneration payable to the Statutory Auditors of your
 Company would be commensurate with the volume of work involved in
 conducting audit of Annual Accounts for the financial year 2011-12.
 Since this cannot be quantified at this stage, the members are
 requested to authorize the Board of Directors to determine/fix the
 remuneration payable to the Statutory Auditors. The members may kindly
 note that in respect of the financial year 2010-11, the Board had fixed
 Rs. 15,000/-, as remuneration, which is exclusive of applicable service
 tax and other re-imbursements.
 
 Reports of the Auditors
 
 You may appreciate that Report of the Statutory Auditors on Annual
 Accounts of your Company for financial year ended 31st March 2011, does
 not have any reservation, qualification or adverse remark.
 
 The CAG for the financial year 2010-11, has decided not to review the
 report of the Statutory Auditors on Annual Accounts of your Company for
 the year ended 31st March 2011 and as such have no comments to make
 under Section 619(4) of the Companies Act, 1956.
 
 Appreciation
 
 Your Directors wish to place on record their appreciation of the
 continued guidance and support extended by MOP&NG and other Ministries.
 Your Directors also acknowledge the valuable support and services
 provided by Balmer Lawrie & Co. Ltd. Your Directors appreciate and
 value the trust imposed upon them by the members of the Company.
 
                                           On behalf of the Board of
 
 Registered Office                                P. Kalyanasundaram
 
 21 Netaji Subhas Road,                                     Chairman
 
 Kolkata – 700 001.                          Sukhvir Singh, Director
 
 Date: 17th August 2011                               K. Subramanyan
 
                                                            Director