Dear Shareholders,
 
 We have pleasure in presenting the Annual Report on the business
 operations of the Company along with the Statement of Audited Accounts
 for the year ended 31st March 2011.
 
 1.  Financial Results                          (Rs in ''000)
 
 Particulars                                   2010-11      2009-10
 
 Total Income                                    3,274        4,188
 
 Profit/(Loss) before Taxation                 (11,537)      (6,118)
 
 Profit/(Loss) after Tax                       (11,537)      (6,118)
 
 Balance brought forward                       (31,133)     (24,873)
 
 Balance transferred to Balance Sheet          (42,644)     (31,133)
 
 During the year, the Company incurred Rs. 183.53 lacs on exploration
 activities and Rs. 137.78 lacs on administrative and other expenses.
 The cumulative amount spent on exploration activities of Rs. 759.77
 lacs as on 31 March, 2011 has been transferred to pre-operative
 expenses.
 
 2. BUSINESS OPERATIONS AND OUTLOOK
 
 For full details on the operations of the Company during the year under
 review, please refer to the segment titled Report on Exploration
 Activities and the segment titled Status of important applications
 for Reconnaissance Permit (RP) / Prospecting Licence (PL) / Mining
 Lease (ML) published elsewhere in this Annual Report.
 
 The highlights of the operations undertaken by the Company during the
 year under review are summarized hereunder:
 
 Ganajur Main Gold Prospect:
 
 - During November, 2010 the Mining Lease application of Deccan
 Exploration Services Private Limited (DESPL), a wholly-owned subsidiary
 of the company for 0.29 sq km covering the Ganajur Main Gold Prospect
 was recommended by the Government of Karnataka to the Ministry of
 Mines, Government of India (MoM) for final approval.
 
 - In February, 2011 the company appointed SRK Mining Services (India)
 Private Limited, Engineers and Consultants (SRK), to undertake a
 comprehensive scoping (pre-feasibility) study to assess the mining
 potential of Ganajur Main Gold Prospect located in the Ganajur-Karjagi
 Block of Haveri District in the State of Karnataka.
 
 - Other than studying the financial economics of establishing an open
 pit mining operation, the scoping study will also address technical
 issues such as mine optimization, process design and future work
 programs. Further, the scoping study will also provide an updated
 resource statement.
 
 - Our shareholders would be aware that in May, 2010 SRK completed an
 initial resource estimate and compilation of a technical report
 according to the internationally approved JORC (Joint Ore Reserves
 Committee, Australia) Guidelines for the Ganajur Main Gold Prospect.
 
 - The ML application in respect of the Ganajur Main Gold Prospect is
 being pursued vigorously by the company.
 
 Update on Hutti Gold Projects :
 
 - The company has been updating the shareholders on this matter from
 time to time. The announcements made by the company in this regard are
 available on the company''s website as well as on the website of the
 BSE.
 
 - Upon the direction of the Hon''ble High Court of Karnataka, the
 Ministry of Mines, Government of India (Central Government) had
 considered and rejected the recommendation of the State Government of
 Karnataka to reserve an area of 16,109 hectares in the Hutti Belt,
 Karnataka in favour of Hutti Gold Mines Limited, a State Government PSU
 and had instead directed the State Government to consider the pending
 Prospecting Licence (PL) applications of DESPL.  It may be noted that
 DESPL had lodged PL applications for gold in the Hutti Belt after
 successfully carrying out exploration under Reconnaissance Permit.
 
 - Hutti Gold Mines Limited has now filed a Writ Petition in the Hon''ble
 High Court of Karnataka challenging the aforesaid decision of the
 Central Government. The matter is now pending before the Hon''ble High
 Court which has fixed 29 August, 2011 as the next date of hearing.
 
 3.  SUBSIDIARY COMPANY
 
 As required under Section 212 of the Companies Act, 1956, the audited
 Profit and Loss Account for the year ended 31 March, 2011 along with
 the Balance Sheet as at that date and the Reports of the Directors and
 Auditors thereon of Deccan Exploration Services Private Limited, a
 subsidiary company is attached.
 
 4. CORPORATE GOVERNANCE
 
 The Company has complied with all the mandatory requirements of
 Corporate Governance Code specified by the Securities and Exchange
 Board of India through Clause 49 of the Listing Agreement. As required
 by the said Code, a separate Report on Corporate Governance forms part
 of this Annual Report. A Certificate from M/s. Rathi & Associates,
 Practising Company Secretaries, Mumbai regarding compliance with the
 conditions of Corporate Governance also forms part of this Annual
 Report.
 
 Further, in terms of Clause 49(IV)(F) of the Listing Agreement, a
 separate report titled Management Discussion and Analysis forms part
 of this Annual Report.
 
 5. DECCAN GOLD MINES EMPLOYEE STOCK OPTION PLAN, 2008
 
 The disclosures required to be made under the SEBI (Employee Stock
 Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are
 given in the Annexure to the Report.
 
 6. BOARD OF DIRECTORS
 
 Mr. Charles E.E. Devenish and Dr. M. Ramakrishnan are the Directors who
 retire by rotation and being eligible, offer themselves for
 reappointment.
 
 Necessary resolutions seeking the approval of the shareholders for the
 reappointment of the aforesaid Directors forms part of the Notice
 convening the Annual General Meeting. In terms of Clause 49(IV)(G)(i)
 of the Listing Agreement entered into with the Bombay Stock Exchange
 Limited all the requisite details about the Directors seeking
 re-appointment at the ensuing Annual General Meeting forms part of the
 Notice convening the Annual General Meeting.
 
 Further, pursuant to Clause 49(IV)(E)(iv) of the Listing Agreement, the
 shareholders may take note that none of the Non Executive Directors
 hold any shares / convertible instruments in the Company as on the date
 of this Report.
 
 7. DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
 confirm :
 
 - that in the preparation of the annual accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material departures.
 
 - that they 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 ended 31 March, 2011 and
 of the loss of the Company for that period.
 
 - that they 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.
 
 - that they have prepared the attached Statement of Accounts for the
 year ended 31 March, 2011 on a going concern basis.
 
 8. PERSONNEL
 
 Your Directors place on record, their appreciation for the good work
 done by all the employees.
 
 During the year under review, none of the employees of the Company was
 in receipt of remuneration in excess of the limits prescribed under the
 provisions of Section 217 (2A) of the Companies Act, 1956 read with the
 Companies (Particulars of Employees) Rules, 1975.
 
 9. AUDITORS
 
 The Statutory Auditors M/s. V.K. Beswal & Associates, Chartered
 Accountants, Mumbai retire at the ensuing Annual General Meeting and
 being eligible, offer themselves for reappointment.
 
 10. STATUTORY AUDITORS'' REPORT
 
 Observations made in the Statutory Auditors'' Report are
 self-explanatory and therefore, do not call for any further comments
 under Section 217(3) of the Companies Act, 1956.
 
 11. FIXED DEPOSITS
 
 The Company has not accepted or renewed any deposit from public during
 the year under review.
 
 12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS & OUTGO
 
 A. Conservation of Energy and Technology Absorption
 
 Considering the nature of the Company''s existing business activities,
 your Directors have nothing to state in connection with conservation of
 energy and technology absorption.
 
 B. Foreign exchange earnings and outgo
 
 It may be noted that during the year under review, the Company did not
 have any foreign exchange earnings, but had a foreign exchange outgo of
 Rs. 0.22 lac.
 
 13. ACKNOWLEDGEMENT
 
 The Directors wish to express their gratitude to all the business
 associates and to the Investors / Shareholders for the confidence
 reposed in the Company and its management. The Directors also convey
 their appreciation to the employees at all levels for their enormous
 personal efforts as well as collective contribution.
 
                                       For and on behalf of the Board
 
 Place: Bangalore                          Charles E.E. Devenish
 
 Date: 10 August, 2011                            Chairman