Dear Shareholder
 
 2011-12 has been a significant year. 13 July 2011 saw the unveiling of
 our new corporate identity: the RP-Sanjiv Goenka Group.  Covering 10
 companies across five business verticals, the Group has an asset base
 of Rs.14,000 crore; Rs.9,000 crore in revenues; Rs.4,500 crore in
 market capitalisation; 100,000 shareholders; and 16,000 employees.
 
 The business verticals under the Group are:
 
 - Power and Natural Resources. This covers your Company, CESC Limited;
 Noida Power Company Limited and Integrated Coal Mining Limited.
 
 - Carbon Black which involves Phillips Carbon Black Limited.
 
 - Retail. This incorporates Spencer''s Retail Limited; Music World
 Retail Limited; and Au Bon Pain Cafe India Limited.
 
 - Media and Entertainment. This has Saregama India Limited and Open
 Media Network Limited.
 
 - Infrastructure, which is represented by CESC Properties Limited.
 
 The logo of this new group is derived from an arrow-head, which
 represents speed, focus and progressiveness. Six such arrow- heads
 converge to a common goal, which forms the ''Dhanuchakra'' -orthe logo
 identifying the Group.
 
 Let me now move on to the performance of CESC, or your Company. A good
 place for a significant fiduciary to begin is the financials.
 
 During 2011-12, total income from operations of CESC as a standalone
 entity rose by 12.6% to Rs.4,781.9 crore. Input prices increased
 considerably on account of coal costs. Despite that, earnings before
 interest, depreciation and taxes (EBIDTA) went up by 8.8% to Rs.1,258.6
 crore. Profit before depreciation and taxation (PBDT) increased by
 11.5% to Rs.982.8 crore. And your Company''s profit after taxes (PAT)
 rose by 13.5% to Rs.554.3 crore. You will agree that these are
 creditable numbers.
 
 I would now like to touch upon some key performance parameters.
 
 - Generation from your Company''s three units at Budge Budge, Southern
 and Titagarh increased by 3.6% in 2011-12 to 8,692 million units.
 During the year, CESC''s composite plant load factor for the three
 plants was almost 88%, versus the national average of 73.3%.
 
 - Several initiatives were taken to improve power distribution and
 ensure an almost zero load-shedding status for Kolkata.  Some of these
 were: (i) increasing the capacities of existing substations; (ii)
 commissioning four new distribution stations; (iii) significantly
 increasing the network of underground cables across the licensed area
 and (iv) installing over 328,000 new meters-either as new connections
 or as replacements.
 
 - In addition, your Company is executing some larger projects to
 upgrade its distribution network, such as (i) successfully
 commissioning a fourth transformer at its Eastern Metropolitan
 substation; (ii) setting up a new substation at Dum Dum and the
 Barrackpur Trunk Road and (iii) a receiving station at Rishra, which
 will allow CESC to import additional power and further improve
 reliability and security of supply in the western part of the licensed
 area.
 
 I am happy to inform you that the 2 x 300 MW coal fired thermal power
 project at Chandrapur in Maharashtra is on schedule.  Construction work
 is in its advanced stages. The two units are expected to be
 commissioned in April 2013 and July 2013.
 
 Equally, all requisite clearances-including the environmental ones -are
 in place for the 2 x 300 MW thermal power project at Haldia in West
 Bengal.
 
 The Group has also moved on to renewables. In Kutch (Gujarat), it set
 up a 9 MW solar power project using photovoltaic technology.  The plant
 was commissioned on 9 March 2012 and was dedicated to the nation on 19
 April 2012 by the Hon''ble Chief Minister of Gujarat, Shri Narendra
 Modi. Another solar power project is on theanvilatBikanerinRajasthan.
 
 Let me now move on to two concerns, and one potential opportunity.
 
 The first concern is coal scarcity. This is a serious problem for coal
 fired thermal producers across India. At the end of February this year,
 more than 30 power plants had coal stock of less than a week and some
 25 or so of less than five days. The domestic coal deficit was only
 partially met by using imported coal. As it stands, it seems unlikely
 that domestic coal output will meet the power demand in the Twelfth
 Five Year Plan (2012-17).  Consequently, many fuel supply agreements
 may not deliver the coal these promise.
 
 Your Company has attempted to deal with this crisis by locking in
 imported coal. Thanks to the Group''s owning over 11% equity ownership
 of coal mining assets in South Africa, as well as executing long term
 supply agreements, your Company should have access to sufficient
 imported coal over the foreseeable future. The first delivery of such
 coal is expected in 2014.
 
 The second concern is the pricing of power. As coal costs rise, so too
 will be the pressure on pricing. Against this will be the concerns of
 state governments and state electricity boards - which will try to
 politically resist such pass-through whenever it can.
 Generation-cum-distribution companies such as yours will have to do a
 tight balancing act between the needs of the state governments on the
 one hand and shareholder value on the other.  Such tight rope walking
 may increase in the medium term.
 
 Now to the potential opportunity. I am often asked the following
 question: Given CESC''s century-long experience in power distribution,
 why aren''t you considering more such plays in different geographies
 across India? My answer is this: Yes. We have the capabilities and
 the competencies. And we are always exploring for the ''right''
 territories, provided these come with the ''right'' conditions and at
 the''right''prices.
 
 I want to end this letter with a request. Please wish the RP-Sanjiv
 Goenka Group all the success. We need your support and good wishes.
 This Group, built on a legacy of over a century, has more to deliver.
 To everyone.
 
 With best regards,     
 
                                                           S. Goenka
 
 13 June 2012                                          Vice-Chairman