The Directors have pleasure to present the 78th Annual Report of your
 Company covering the operating and financial performance for the year
 ended December 31, 2010.
 
 FINANCIAL REVIEW:
 
                                              2010              2009
                                        (in Rs 000)     (in Rs 000)
 
 Gross Turnover                          12,770,888       11,125,882
 
 Less: Excise Duty on Turnover              188,945          209,365
 
 Net Turnover                            12,581,943       10,916,517
 
 Other Income                               152,529           84,228
 
                                         12,734,472       11,000,745
 
 Profit / (Loss) before Depreciation 
 & Taxation                               1,755,076        1,281,868
 
 Less : Depreciation                        325,104          279,234
 
 Profit / (Loss) before Taxation          1,429,972        1,002,634 
 Provision for
 Taxation :
 
 -Current Tax                               546,378          401,757
 
 - Deferred Tax Charge/(Credit) (Net)       (69,926)         (66,361)
 
 - Fringe Benefit Tax                             —            1,722
 
 - Tax for Earlier Years                          —           (6,756) 
 
 Net Profit                                 953,520          672,272 
 Profit
 available for Appropriation              2,381,675        1,720,938
 
 OPERATIONS
 
 During the year 2010 your Company achieved a total turnover of Rs.
 12,770.9 million as compared to Rs.11,125.9 million in 2009, which
 reflects a growth of around 15%.
 
 Your Company has undergone a transformation in all areas of its
 business whether it is sales, profitability, shoe line, visibility and
 the ambience of its stores. In the last 4 years, 72% of the stores have
 been renovated.
 
 Due to the continuous and ongoing process of restructuring being
 adopted by your Company in all areas of its operations, there has been
 improvement in manufacturing, changes in sourcing, credit management,
 retail restructuring, labour union - management relationship, retail
 expansion programs, training and development, team building, internal
 controls, borrowings, working capital management, business processes,
 corporate governance, de-risking the business of the Company and now
 introduction of the Home Delivery Service of shoes for the convenience,
 comfort and choice of our valued customers. Using this service,
 customers can now place orders for any footwear which they are unable
 to find in a Bata store and get it home delivered through courier with
 no extra cost.
 
 The Company continues to focus on improving its collections by
 introducing a fresh range regularly and outsourcing some parts to get
 better margins. The cash flows from higher margins are used to expand
 our business primarily through large format stores. In order to improve
 quality and to reduce costs, our factories have been specialized to
 make footwear of particular variety. Hosur Factory specializes in Hush
 Puppies, Bangalore Factory makes School shoes and Batanagar turns out
 sports shoes and sandals. All these efforts have yielded improved
 margins for the Company and improved production to become more
 competitive.
 
 Your Company has won the Consumer Awards 2010 as Indias Most
 Preferred Retailer given by CNBC Awaaz. This award was won amongst
 stiff competition from other leading retailers and is one of the most
 prestigious awards the country has to offer. Your Directors are proud
 in receiving this Award and the credit for this goes to every employee
 who has worked so hard in shaping the future of the Company. Your
 Company
 
 has been consistently showing improved results in each quarter and we
 are now in a position to take calculated business risks to focus on
 volume growth and to make a deeper penetration in the market place.
 Your Company will continue to grow its business by focusing on tier 2
 and tier 3 cities where the potential for growth is enormous.
 
 TRANSFER TO RESERVES
 
 The Company has transferred a sum of Rs. 95.4 million to General
 Reserve against Rs.67.2 million last year.
 
 DIVIDEND
 
 The Board of Directors have recommended a dividend of 40% for the year
 ended December 31, 2010 as against 30% paid last year, subject to
 approval of the shareholders at the ensuing Annual General Meeting of
 the Company.
 
 FIXED DEPOSIT
 
 As on December 31, 2010 the Company has Rs 1.47 million unclaimed
 matured deposits. Necessary reminders have been sent to the deposit
 holders advising them to claim their deposits from the Company.
 Presently the Company is not accepting any fixed deposits.
 
 CREDIT RATINGS
 
 ICRA has reaffirmed the rating of A1+ to your Company for its CP
 programme. This is the highest-credit quality rating assigned by ICRA
 to short term debt instruments.
 
 AWARDS AND RECOGNITION
 
 Your Company has received the following Awards and Recognition, which
 has made us all proud:
 
 1.  Bata India Limited was awarded CNBC Awaaz Consumer Awards 2010 for
 Indias Most Preferred Exclusive Brand Retail Outlet in July 2010.
 Mr. Marcelo Villagran, Managing Director was felicitated by Mr. Pranab
 Mukherjee, Honble Finance Minister of India in a ceremony held in
 Mumbai.
 
 2.  Brand Equity recognized Bata in the TOP 50 Most Trusted Brands
 in August 2010. Bata is the only lifestyle retailer in the top 50
 brands.
 
 3.  Bata India Limited was listed amongst Indias Largest Corporations
 by Fortune India Magazine in December 2010.
 
 4.  Bata Industrials received Directorate General Mines Safety
 Certification for its PU Sole Safety Footwear range.
 
 5.  Bata India Limited received Images Fashion Award for the Most
 Admired Retail Partner of the Year in January 2010.
 
 6.  Bata India Limited was awarded Retailer of Year (Footwear / Non
 Apparel) by the Asia Retail Congress.  Mr. Marcelo Villagran, Managing
 Director received the award in a glittering ceremony at Mumbai on 8th
 February 2011.
 
 7.  Bata India Limited received the Most Admired Footwear Brand of
 the year award by Images Fashion Forum in Mumbai on 18th February 2011.
 
 8.  Amity University awarded Bata India Limited Corporate Excellence
 Award for the Best Retail Chain during the international business
 summit on 23rd February 2011.
 
 9.  Bata India Limited was recognized as the Most Trusted Brand at 18th
 position by the Brand Trust Report.  This ranking is post survey of
 16,000 brands; only 300 top brands were felicitated by The Trust
 Advisory.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 The following CSR activities were undertaken by your Company during the
 year 2010:
 
 - Shoes, slippers and stationery were donated to children in orphanage
 and tribal children under Bata Children Program across India.
 
 - The Company provided support to the disaster affected people by
 promptly sending in shoes after the earthquake in Ladakh.
 
 - Free Medical check up and blood donation camp organized in Batanagar.
 
 - The Company encourages entrepreneurial spirit in the small scale
 business located in the vicinity of its factories so that they become
 independent associates and partners in progress. This generates
 employment in the area giving opportunities for people to grow.
 
 - The Company is providing free medical services to the people living
 near the factory in Bataganj (Patna) and also free drinking water
 facilities to the inhabitants residing around the factory.
 
 - Bata Sports Club, Kolkata provides cricket and football coaching and
 guidance to budding talents through the services of renowned sporting
 personalities.
 
 - Bata School of Cricket participated in Cricket Association of Bengal
 tournaments in junior group (Under - 14 & 17 Years).
 
 - Organized sports day on the occasion of Childrens Day for the
 underprivileged children from various NGOs/projects in Kolkata.
 
 RETAIL
 
 The year 2010 has been a milestone year for Bata Indias retail
 business, with opening of 108 new large format stores across all major
 towns in India. With more than 1200 stores across 400 cities, the Bata
 Store is one of the most recognizable and favoured landmark in any
 major market in India.
 
 In Retail, your Company continues to improve the strategic positioning
 of its stores to cater to the masses and compete better in future with
 over 60 new Bata Stores opened every year, and existing stores being
 renovated during the year. The growth of the retail business with
 penetration in newer markets - especially Tier 2 / Tier 3 cities and
 growth in existing metro market is the focus for Bata India. All the
 new stores are in large format, with an average size of over 3000 sq.
 ft. and offer an incomparable footwear shopping experience to the
 customer.  The renovated stores are also modeled on these large format
 stores and promise a great shopping experience.
 
 The specially designed shoe display systems, unique furniture for
 non-footwear sales, contemporary styling, and great ambience ensure
 that these new Bata Stores provide the best retail environment to its
 customers, so as to make their footwear shopping experience at Bata a
 very endearing one.
 
 The large and international layout of these stores help in better
 exhibition and display of the several footwear concepts from Batas new
 shoe collection.
 
 The collection improved tremendously during the year 2010, with the
 company launching trendy and fashionable designs which appealed to
 todays youngsters. The new collection was well received and ensured
 that the brand enjoyed great customer support and loyalty. Batas
 leadership in the dress comfort segment continues and Comfit,
 Ambassador and Mocassino brands have grown very well. For the ladies
 segment, Batas popularity continues to grow with the trendy Marie
 Claire range and its latest designs to enhance a womans femininity,
 sensuality and individuality. The youth focused brand North Star and
 specialty outdoor brand Weinbrenner presents new trendy designs with an
 increased focus on casual styles.
 
 The premium brand of Hush Puppies offers city casual styles to
 customers while Scholl & Comfit are offered with fresh younger designs
 for absolute comfort with style. Popular amongst the tiny tots,
 Bubblegummers continue to allure them with its trendy and lightweight
 all-weather footwear.
 
 Customer Service remained our focus with launch of new initiatives like
 Home Delivery service, e-commerce enabled website and a dedicated call
 centre for customer queries and suggestions. Extensive training of
 store staff, customer response and research management systems, and
 customer relationship management remained focal areas for the Company.
 
 NON RETAIL
 
 The Non Retail business has shown remarkable growth in business and
 profits over last year. New dealerships were opened in unrepresented
 areas to increase the market coverage. New products launched by the
 Company resulted in serving many more customers.
 
 The Company is concentrating on the top distributors and working with
 them to grow our business. Constant incentive programs were offered to
 existing dealers to ensure growth in wholesale business.
 
 Bata Industrials & Institutional business has been steadily growing for
 last 2 years and is expected to grow at a healthy rate for next couple
 of years. Country wide distribution network has been established to
 harness the market potential to become market leaders in next 2 years.
 Bata Industrial collection has been awarded BIS & DGMS certification
 which will allow us to serve more customers.
 
 The Company has invested its resources in the factory to meet the
 stringent technical specifications and standards of the safety footwear
 business and ensure that our products are the best in the market.
 
 EXPORT
 
 Your Companys Export sales in 2010 were Rs 117.7 million compared to
 Rs.77.7 million in 2009.
 
 LOGISTICS
 
 Your Company has a well organized Logistic Team at Gurgaon which
 controls the distribution process and ensures that footwear of the
 right size is available at the right time and at right place, to our
 customers all over the country. Your Companys endeavour is to keep
 improving its distribution process through greater use of Technology
 inputs to track the rapid changes in consumer preferences and shopping
 practices. To support and deliver the growth projections, your Company
 is strengthening its Logistics Infrastructure through restructuring and
 consolidation of the space at various Regional Distribution Centres
 (RDCs), introduction of modern infrastructure and new technologies,
 reduction in product transit lead-times and faster and more frequent
 deliveries to stores.
 
 CAPITAL EXPENDITURE
 
 The Capital Expenditure incurred during the year amounted to Rs. 580.4
 million as against Rs.436.1 million in 2009. The increase in capital
 expenditure was predominantly due to opening a number of new stores and
 modernization of old stores. Capital expenditure has also been incurred
 for installation of machinery and moulds to modernize our factories and
 to produce latest trendy design footwear.
 
 INDUSTRIAL RELATIONS AND PERSONNEL
 
 Your Company has continuously been working to improve human resources
 competencies and capabilities in the company to deliver results as per
 the plan. Highlighted here are some of the initiatives and
 interventions taken up during the year 2010 :
 
 Strengthening and Re-designing Organization structure
 
 To strengthen the organization in the area of sourcing quality
 products, a new procurement function has been setup to support our
 sourcing from external vendors. All the teams which were earlier
 working for different category have become part of this team with the
 objective of sourcing quality and cost effective product on time. The
 function is headed by a Vice President - Procurement and based at
 Gurgaon. 17 new professionals are recruited in various disciplines to
 support the functions like quality control, vendor development,
 compliance, etc.
 
 Revamping of Logistics function
 
 All 5 Regional Distribution Centres (RDC) teams are restructured over a
 period of last six months. Your Company has hired total 21 new
 professional executive including 5 RDC managers during last year and
 now all our RDCs are managed by experienced professional managers hired
 from other retail organization. Your Company is now working on
 improvement in overall inventory and logistics management improvement
 to cater to all its stores across chains.
 
 Building up the best team in all our functional areas
 
 During 2010 your Company has hired 71 Middle and Senior level
 Executives for its various functional areas and people moving out,
 retiring etc. had been replaced with professionals with better
 qualification and experience.
 
 Creating bench strength and building up capability for future growth
 
 a) Executive Development plan
 
 For the second consecutive year, your Company pursued its aim of
 nurturing and developing new talent for various responsibilities by
 successfully training its Executive Trainees. 13 executive trainee have
 been hired from various retail management schools who have gone through
 9 months Executive Development Plan (EDP) which was initiated in the
 year 2009.
 
 Total 13 executive trainees, who successfully completed their training,
 have been placed as District Managers across chains in retail
 operations in 2010.
 
 Many more executives have been hired during 2010 for retail operation,
 merchandising and whole sale, etc.
 
 b) Graduate Engineers Development Plan
 
 Your Company has also initiated process of hiring and training
 engineers for its manufacturing division.  In the first batch of
 Graduate Engineer Trainees (GETs) a total of 11 graduate engineers
 were inducted at Batanagar. The one year duration training program is
 currently underway. During the initial phase of their training of 4
 months at Batanagar, the trainees have been placed to different units
 to take up On-the-Job training in their final phase of training.
 
 Training and Development
 
 a) Training of store staff, Store Managers and K-Agents
 
 Developing and Training of internal talents continued to be the focus
 area of your Company in 2010.  Identified employees with potential for
 growth were put on specific developmental plan, Training was conducted
 for 1905 store employees and 150 store managers and K-Agents to enhance
 their performance and effectiveness.
 
 b) Store operations management course seminar
 
 In September 2010, Bata India organized a seminar on Store Operations
 Management Course leaded by Ms. Serena Di Sarra (Course Leader &
 Business Analyst, Global Footwear Services) for the merchandisers and
 district managers from all over the region. The objective of the course
 was to equip participants with the best tools and skills to excel in
 the area of retail operations.
 
 During the seminar, the participants got an opportunity to interact
 one-on-one with the leadership team and consolidate their analytical
 skills, share best practices and familiarize themselves with Bata store
 operations management process.
 
 Total 15 participants from Kenya, Malaysia, Bangladesh, Thailand, Sri
 Lanka and India attended this five days program.
 
 c) Store Management Course and Winning Merchandise Course
 
 Nominated buyers, retail manager and district managers from retail
 operations attended winning merchandising course in Nairobi and
 Singapore. The program have helped them to broaden their horizon on
 different facets of merchandise and overall retail management and
 operations.
 
 Merchandising seminar
 
 A Merchandising Seminar was held, led by Ms. Gerry Tham, the then Chief
 Buyer - Family concept and attended by merchandisers and distributors
 with great enthusiasm. The focus was on providing a massive opportunity
 to all our participants to consolidate their critical expertise and
 familiarize themselves with Bata Merchandise Management.
 
 Millennium Club 2010
 
 Your Company recognized the achievement of the members of Millennium
 Club 2010. The Millennium Club is a recognition program for all Retail
 stores in Bata India Ltd. with an aim of acknowledging the superior
 performance and extra efforts put in by the store managers who have
 achieved a turnover of over Rs. 20 million and above during the
 preceding year.
 
 As a token of appreciation, the members were presented with trophies,
 certificates and lapel pins for themselves and their team members, by
 the Managing Director. This appreciation reinforced their commitment
 and passion towards achieving the goals of the Company.
 
 Performance management: through Quarterly Performance Review.
 
 Your Company initiated a quarterly performance review process for all
 the operational Retail Managers and District Managers. This process
 very clearly defines their objectives and achievements. This review
 takes place in retail chain office by the immediate supervisor before
 HR representative and feedback of the last quarter is given to the
 assessees and also their target for the next quarter is set. The
 overall process has been extremely helpful in setting up a process of
 continuous performance measurement and performance enhancement.
 
 Information in terms of Section 217(2A) of the Companies Act, 1956 read
 with the Companies (Particulars of Employees) Rules, 1975 is set out in
 an Annexure to this Report.
 
 FINANCE
 
 The Earning per Share (EPS) (Basic and Diluted) of your Company has
 increased substantially by 41.87% (from Rs.10.46 in 2009 to Rs.14.84 in
 2010).
 
 Your Company is out of Bank Borrowings since April 2010 as against
 Rs.146.5 million at the end of 2009, despite the entire capital
 expenditure and VRS funded through internal accruals.
 
 RESEARCH & DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
 
 Your Company continued its local Research & Development activities
 during the year in the key areas of product, process, material
 development, footwear moulds, leather and tannery technology with
 emphasis on creating a pollution-free work environment. Total
 expenditure incurred on Research & Development was Rs.  50.1 million
 during the year.
 
 Your Company continues to actively pursue energy conservation measures.
 
 SUPPORT FROM BATA GROUP
 
 Your Company has seamless access to the benefits of technical research
 and innovative programmes of the Bata group from Global Footwear
 Services, for which it paid a fee of Rs.135.0 million during the
 calendar year 2010.
 
 The Company continues to receive guidance and managerial support in its
 various functions including store layout, marketing, shoe line, up
 gradation of factories, training of managers and guidance from senior
 most managers of the group. The Technical Collaboration which expired
 on December 31, 2010 has been renewed for a further period of 10 years.
 
 STATUTORY AUDITORS
 
 The Statutory Auditors of the Company - Messrs. S R Batliboi & Co.,
 Chartered Accountants retire at the ensuing Annual General Meeting of
 the Company and have given their consent for re-appointment. Your
 Company has also received their Certificate pursuant to Section 224(1B)
 of the Companies Act, 1956.
 
 DIRECTORS RESPONSE TO THE COMMENTS, IF ANY, MADE BY THE AUDITORS IN
 THEIR REPORT
 
 Auditors Report read together with Annexure referred to in Paragraph 3
 of the Auditors Report do not contain any qualification of significant
 nature and do not call for any explanation / clarification.
 
 COST AUDITORS
 
 In compliance with the Central Governments Order, your Board has
 appointed Messrs. Mani & Co., Cost Accountants to carry out the Cost
 Audit of the Company in respect of Footwear. This appointment has to be
 made in each financial year and based on the application of your
 Company, the Central Government has approved the re-appointment of the
 Cost Auditor for the current financial year.
 
 DIRECTORS
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of your Company, Mr. P M Sinha and Mr. U
 Khanna, Directors of the Company are due to retire by rotation at the
 ensuing Annual General Meeting of the Company. Mr. P M Sinha, Chairman
 of the Board has decided not to seek any re-election. Mr. Sinha will,
 however, be stepping down from the Board after the conclusion of the
 78th Annual General Meeting of the Company. The Company has achieved
 several milestones during his tenure as the Chairman. The Board of
 Directors of your Company wishes to place on record its sincere
 appreciation for the valuable services rendered by Mr. P M Sinha during
 his tenure as the Chairman. The Board wishes Mr.  Sinha good health in
 the ensuing years. Mr. U Khanna, being eligible, offers himself for
 re-appointment as a Director on the Board of your Company.
 
 Mr. Shaibal Sinha, Director Finance of your Company resigned from the
 Board with effect from September 7, 2010 and the Board accepted his
 resignation with effect from the same date. The Board of Directors of
 your Company wishes to place on record its sincere appreciation for the
 valuable services rendered by Mr. Shaibal Sinha during his tenure as
 Director Finance of the Company.
 
 The Nomination, Governance & Compensation Committee recommended to the
 Board which was agreed by the Board that Mr. Fadzilah Mohd. Hussein be
 appointed as an Additional Director on the Board of your Company with
 effect from July 29, 2010. The Company has received a notice in writing
 from a Member of the Company under Section 257 of the Companies Act,
 1956 signifying his intention to propose the appointment of Mr.
 Hussein. Your Board, at the said Meeting has also appointed Mr. Hussein
 as Director Finance for a period of 5 (five) years with effect from
 October 01, 2010, subject to approval of the shareholders and also
 fixed his remuneration within the overall limits specified under the
 Companies Act, 1956 and as approved by the Shareholders at the 76th
 Annual General Meeting held on May 26, 2009. The aforesaid appointments
 of Mr. Hussein are being proposed by separate Resolutions which form
 part of the notice of the Annual General Meeting.
 
 The Nomination, Governance & Compensation Committee recommended to the
 Board which was agreed by the Board that Mr. Rajeev Gopalakrishnan be
 appointed as an Additional Director on the Board of your Company with
 effect from February 23, 2011. The Company has received a notice in
 writing from a Member of the Company under Section 257 of the Companies
 Act, 1956 signifying his intention to propose the appointment of Mr.
 Gopalakrishnan. Your Board, at the said Meeting has also appointed Mr.
 Gopalakrishnan as Managing Director-Bata Stores, Bata India Limited for
 a period of 5 (five) years, subject to approval of the shareholders and
 also fixed his remuneration within the overall limits specified under
 the Companies Act, 1956 and as approved by the Shareholders at the 76th
 Annual General Meeting held on May 26, 2009. The aforesaid appointments
 of Mr. Gopalakrishnan are being proposed by separate Resolutions, which
 form part of the notice of the Annual General Meeting.
 
 At its Meeting held on April 28, 2011 the Nomination, Governance &
 Compensation Committee recommended to the Board which was agreed by the
 Board that Mr. Atul Singh and Mr. Akshay Chudasama be appointed as
 Additional Directors on the Board of Directors of your Company with
 effect from April 28, 2011. In terms of Section 260 of the Companies
 Act, 1956 both Mr. Atul Singh and Mr. Akshay Chudasama hold office upto
 the date of the forthcoming Annual General Meeting. The Company has
 received separate Notices in writing from a Member of the Company under
 Section 257 of the Companies Act, 1956 signifying his intention to
 propose the appointments of Mr. Atul Singh and Mr. Akshay Chudasama as
 Directors of the Company, liable to retire by rotation. The
 appointments of Mr. Atul Singh and Mr. Akshay Chudasama as Directors of
 the Company are being proposed by separate Resolutions, which form part
 of the Notice of this Annual General Meeting.
 
 BATANAGAR PROJECT
 
 Your Company has restructured the Agreements with revised terms and
 conditions for development of the modern integrated township project at
 Batanagar. This has been done to ensure that the development of the
 project proceeds with due urgency and your Company manages to focus on
 its core businesses. The restructured Agreements have been signed on
 April 28, 2010. As envisaged, the project is progressing in full swing.
 The employees of the Company at Batanagar Factory have been shifted to
 The Bata Rehabilitation Housing Complex, located next to the Batanagar
 Factory. This Housing Complex has defined a new way of living for the
 employees as the new flats are full of amenities, e.g., Central open
 space for community functions, Storm water drainage system, PG Gas
 Connections replacing earlier stove systems, state-of-the-art
 multipurpose grounds for various kinds of sports, good housekeeping
 system, etc. In consideration of the restructured Agreements, the
 Company has received an aggregate amount of Rs.1,000.0 million in cash
 for future transfer of shares in the Joint Venture Company - Riverbank
 Developers Private Limited (RDPL) and variation of the development
 rights for the project. However, the condition precedent to recognizing
 such sale of investment and variation of rights in the joint
 development agreement had crystallized in the month of March, 2011 and
 consequently, the gains of Rs. 1,093.55 million before tax arising on
 the said transaction have been recognized in the Books of the Company
 during the financial year 2010-11. Further, as part of consideration,
 your Company is yet to receive 3,24,550 sq. ft. of constructed space at
 no additional cost as per the terms of the agreements.  Pursuant to
 such restructuring, your Company has disposed off its stake in joint
 venture with RDPL.
 
 Notwithstanding the aforesaid restructuring of Agreements, your Company
 continues to remain committed to the Government of West Bengal in terms
 of the approval given by it. The Companys factory will continue to
 operate from its present site and the Company will continue to make
 additional investments in the factory for its modernization and for the
 revitalization and rejuvenation of the employees of the Company at
 Batanagar. The Companys commitment to its employees and the Government
 of West Bengal remains undiminished.
 
 DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF
 THE COMPANIES ACT, 1956
 
 Your Directors hereby confirm :- 
 
 i) that in the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures;
 
 ii) that the Directors 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 of the Company for that period ;
 
 iii) that the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities;
 
 iv) that the Directors have prepared the Annual Accounts on a going
 concern basis.
 
 SUBSIDIARY COMPANIES
 
 As required under Section 212 of the Companies Act, 1956, the Audited
 Balance Sheet and Profit & Loss Account along with the respective
 Reports of the Auditors and the Board of Directors thereon of the
 subsidiary companies of the Company for the year ended 31 December 2010
 are attached.
 
 CORPORATE GOVERNANCE
 
 Your Company believes that Corporate Governance is a way of life rather
 than something to be carried out under legal compulsion. Your Company
 is committed to the application of the best management practices,
 compliance with law, adherence to ethical standards and discharge of
 social responsibilities. Your Company has in all spheres of its
 activities adequate checks and balances to ensure protection of
 interest of all stakeholders. Your Company also endeavours to share
 with its stakeholders openly and transparently information on matters
 which have a bearing on their economic and reputational interest. This
 calls for a great degree of judgment and discretion so as not to put
 business and commercial interest of the Company at risk.
 
 Corporate Governance Report as well as Corporate Governance Compliance
 Certificate received from the Statutory Auditors is provided as
 separate Annexure to this Report.
 
 CONCLUSION
 
 The Directors place on record their sincere appreciation for the
 cooperation and support received from investors, our dear shareholders,
 customers, business associates, bankers, vendors as well as regulatory
 and governmental authorities.
 
 The Directors appreciate the invaluable contribution of the management
 team under whose determined efforts the Company has been able to
 achieve all its major targets in 2010.
 
 The Board would also like to thank the Managing Director and the
 Director Finance, the nominated Directors on the Board and the Major
 Shareholders for their complete support in revamping the operations of
 the Company. We are also very grateful to our independent Directors who
 despite their busy schedules have given their contributions and shared
 their valuable experience and knowledge with the Management to take the
 Company forward. We wish the Management all the best for achieving even
 greater heights in the future.
 
                             For and on behalf of the Board of Directors
 
                                                               P M Sinha 
                                                                Chairman
 
 Gurgaon, April 28, 2011.