The Directors have pleasure in presenting their Report and Statement of
 Accounts for the year ended 31st December, 2010.
 
                               For the year ended   For the year ended
                               31st December, 2010  31st December, 2009
                               (Rupees in Crores)   (Rupees in Crores)
 
 FINANCIAL RESULTS
 
 Profit before Depreciation, 
 Exceptional Items & Tax                762.17            607.98
 
 Deducting therefrom:
 
 Depreciation                            24.33            27.18
 
 Provision for Tax
 
 Current [Including Wealth Tax of 
 Rs. 0.16 Crore
 
 (2009: Rs. 0.16 Crore)]                251.09           206.83
 
 Deferred Taxation                      (2.49)           (7.80)
 
 Fringe Benefit Tax                      -                0.71
 
 Excess Income Tax provision for 
 earlier years written back             (1.07)             --
 
 Prof it after Tax                     490.31           381.06
 
 Adding thereto:
 
 Balance as per last Balance Sheet 
 brought forward                        31.18            50.75
 
 Profit Available for Appropriation    521.49           431.81
 
 The appropriations are:
 
 Dividend
 
 Interim                               173.10          123.64
 
 Final                                 197.82           61.82
 
 Special                                  -            123.64
 
 Tax on Dividend
 
 Interim                                28.75           21.01
 
 Final                                  32.86           10.51
 
 Final 2009                             (0.24)            -
 
 Special-2009                           (0.48)          21.01
 
 Transfer to General Reserve            49.03           39.00
 
 Balance carried forward                40.65           31.18
 
                                       521.49          431.81
 
 PERFORMANCE
 
 Sales increased by 18% over the previous year to Rs. 2735 crores mainly
 due to an increase in unit sales realizations and higher volumes.
 
 Costs of materials have increased by 23% over the previous year to
 Rs.1385 crores due to an increase in Base oil prices and higher
 volumes.
 
 Pro-active Cost Containment Strategies helped your Company to grow its
 gross profits by 13%.
 
 Operating & other expenses increased by Rs. 6 Crores only compared to
 2009, though there was an increase in spend on Advertisement & Sales
 Promotion expenses by Rs. 13 Crores, the same being offset by savings
 in processing charges and miscellaneous expenditure.
 
 Profit before tax increased by 27% over the previous year to Rs. 738
 Crores.
 
 Tax rate for the current year has remained at nearly the same level as
 that of the previous year. Profit after tax increased by 29% over the
 previous year to Rs. 490 Crores.
 
 BONUS SHARES
 
 As the members are aware, the Board of Directors had recommended,
 subject to the approval of the shareholders, one Bonus Equity Share for
 every one Equity Share of Rs. 10/- each held on the Record Date.
 Accordingly, the approval of the shareholders was obtained by way of a
 Postal Ballot on 30th March, 2010. The Bonus Shares were thereafter
 allotted on 13th April, 2010.
 
 CORPORATE GOVERNANCE
 
 Pursuant to Clause 49 of the Listing Agreement, a Management Discussion
 and Analysis Report and a Report on Corporate Governance are given as
 Annexure A and B respectively to this Report.
 
 A certificate from the Statutory Auditors of the Company regarding the
 Compliance by the Company of the conditions stipulated under clause 49
 of the Listing Agreement is also attached to this Report.
 
 The declaration by the Chief Operating Officer pursuant to clause 49(1)
 (ii) of the Listing Agreement stating that all the Board Members and
 Senior Management Personnel have affirmed their compliance with the
 Companys Code of Conduct for the year ended 31st December, 2010 is
 also attached to this Report and marked Annexure C.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 As required under Section 217 (2AA) of the Companies Act, 1956 your
 Directors confirm that:
 
 (i) In the preparation of the annual accounts, the applicable
 accounting standards have been followed and no material departures have
 been made from the same.
 
 (ii) 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 as on 31st December, 2010 and of the profits of the
 Company for the year ended 31st December, 2010.
 
 (iii) The Directors have taken proper and sufficient care 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.
 
 (iv) The Directors have prepared the annual accounts on a going concern
 basis.
 
 DIVIDEND
 
 The Interim Dividend in respect of the year ended 31st December, 2010
 of Rs.  71- per share on 24,72,80,596 Equity Shares was paid to the
 Shareholders of the Company whose names appeared on the Register of
 Members on 2nd August, 2010.
 
 The Directors recommend a payment of final dividend of Rs. 8/- per
 share on 24,72,80,596 Equity Shares.
 
 DIRECTORS
 
 Mr. Amish Mehta resigned with effect from close of business hours of
 15th November, 2010 as the Wholetime Director of the Company designated
 as Director - Finance.
 
 Mr Sujit Vaidya was at the Board Meeting held on 12th October, 2010 and
 was appointed with effect from the said date as an Additional Director
 of the Company. At the said Board Meeting, he was also appointed with
 effect from 16th November, 2010 as a Wholetime Director of the Company
 designated as Director - Finance.
 
 In accordance with section 260 of the Companies Act, 1956 (the Act),
 Mr. Vaidya holds office up to the date of the forthcoming Annual
 General Meeting of the Company. Notice has been received under section
 257 of the Act along with the requisite deposit from a shareholder
 proposing Mr. Vaidya as a candidate for the office of Director.
 
 Your Directors wish to place on record their gratitude for the guidance
 and advice received from Mr. Mehta during his tenure as a Director of
 the Company.
 
 Mr. R. Gopalakrishnan and Mr. S. Malekar retire by rotation and are
 eligible for re-appointment.
 
 The information on the particulars of Directors seeking
 appointment/re-appointment as required under Clause 49 of the Listing
 Agreement executed with the Bombay Stock Exchange Limited and the
 National Stock Exchange of India Limited have been given under
 Corporate Governance (Annexure B) of this Report.
 
 CONSERVATION OF ENERGY
 
 (a) Energy conservation measures taken:
 
 Energy conservation during the financial year has accrued as a result
 of the following steps taken at the various factories of the Company:
 
 Patalganga:
 
 1.  Tube lights were replaced with compact fluorescent lamps
 
 2.  Variable Frequency Drives have been installed on pumps.
 
 3.  Energy savers have been installed on air conditioners.
 
 4.  Auto on /off system provided for street lighting with day light
 sensor.
 
 Silvassa:
 
 1.  Installation of Variable Frequency Drive for transfer and filling
 pumps.
 
 2.  Automatic stoppage of blending agitators on completion of blending
 recipe.
 
 Paharpur:
 
 1.  Automation of power factor panel to ensure high power factor close
 to one.
 
 2.  Optimising the thermopack efficiency by preventive maintenance.
 
 3.  Installation of solar lighting panel for street lights during the
 night.
 
 4.  Variable Frequency Drives installed for air compressor & thermopack
 pump which has led to energy efficiency.
 
 5.  Replacement of pumps with energy efficient pumps.
 
 6.  Optimising blending temperature of products which helped reduce
 energy consumption.
 
 (b) Additional Investments and proposals, if any, being implemented for
 reduction of consumption of energy.
 
 The measure mentioned in (a) above have led to reduction in fuel and
 electricity consumption as well as improvement in the productivity.
 
 Further energy efficient luminaries have been installed in the
 laboratory, supply and dispatch area.
 
 (c) Impact of measures at (a) and (b) above for reduction of energy
 consumption and the consequent impact on the cost of production of
 goods.
 
 The measure mentioned above have led to reduction in fuel and
 electricity consumption as well as improvement in the productivity.
 
 TECHNOLOGY ABSORPTION
 
 1.  Site Safety and Security continued to remain an area of focus at
 the Technology Centre. The Technology Centre transitioned into the
 Operating Management System with a management of change to align with
 Global Standards.
 
 2.  The year 2010 was a year of site upgradation for the Technology
 Centre. The focus on safety at all levels ensured that your Company
 completed the year without a single incident.
 
 3.  The Research & Development centre was recertified to the latest ISO
 specification of 9001 - 2008.
 
 4.  Huge emphasis was laid on technology protection and alignment with
 global requirements by ensuring that all product formulations and raw
 materials have global codes and are entered in databases like
 Streamline and Fusion.
 
 5.  Your Company secured business for various new products with OEMs
 in India to further strengthen its partnership (TATA Nano, Mahindra &
 Mahindra, Maruti etc.).
 
 6.  Various products were launched throughout the year with superior
 properties and stronger differentiations. Some key launches were
 Magnatec 5W-30 and RX CNG. Work is already in progress to make sure
 your Company has the pipeline managed for product launches throughout
 the years 2011 and 2012.
 
 7.  Formulation optimization initiatives by Technology team with
 support from Supply Chain and Marketing was an area of focus, which
 brought about significant savings in raw material costs as well help to
 manage the security of supplies for our raw materials.
 
 8.  Your Company has developed and installed Truck Driving Simulator
 at their Technology Centre to meet increasing requirement for fuel
 economy and safe driving in India. The project, costing Rs. 4.8 million
 is aimed at providing such training to drivers. Fuel Economy is a key
 development area for all the OEMs but limitations are being faced in
 significantly improving the same by conventional means. A two hour
 training session of drivers can improve their driving habits resulting
 in fuel efficient and safe driving contributing to cleaner environment
 and reduced number of accidents.
 
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 1.  Activities relating to Export
 
 There were no significant exports by the Company during the year.
 However, some of the countries where our products were exported were
 China, Saudi Arabia, and Thailand.
 
 2.  Earnings and Outgo
 
 Members are requested to refer to note Nos. 18 & 19 and of Schedule L
 forming part of the Balance Sheet and Profit and Loss Account for the
 year ended 31st December, 2010.
 
 PARTICULARS OF EMPLOYEES
 
 The information required to be published under the provisions of
 section 217(2A) of the Companies Act, 1956 (the Act) read with
 Companies (Particulars of Employees) Rules, 1975 as amended, forms part
 of this Report.
 
 AUDITORS
 
 The Shareholders of the Company are requested to appoint Auditors and
 to fix their remuneration.  M/s. S. R. Batliboi & Co., Chartered
 Accountants, the retiring Auditors have furnished to the Company the
 required certificate under section 224(1 B) of the Companies Act, 1956
 and are therefore eligible for re-appointment as Auditors of the
 Company.
 
 PERSONNEL
 
 The Board wishes to place on record its sincere appreciation of the
 efforts put in by the Companys workers, staff and executives for
 achieving excellent results under difficult conditions.
 
 STAKEHOLDERS
 
 The Board also wishes to thank its Shareholders, Distributors, Bankers
 and other business associates for their support during the year.
 
                         On behalf of the Board of Directors
 
                         N. K. Kshatriya              R. Kirpalani
                          Vice Chairman    Director - Automotive &
                                           Chief Operating Officer
 
                            S. Malekar                   S. Vaidya
 
               Director - Supply Chain          Director - Finance
 
 Mumbai
 
 Dated: 27th April, 2011