The Directors have pleasure in presenting their Thirty Sixth Annual
 Report together with the audited statement of accounts of the Company
 for the year ended 31st March, 2011.
 
 FINANCIAL RESULTS
 
                                                           Rs. in Crore
 
                                2010-11   2009-10    2010-11    2009-10
 Particulars                 Graphite India Limited   Graphite India 
                                                      Limited 
                                                      Consolidated
 
 Sales / Income from 
 Operations – (Gross)           1280.04   1178.22    1501.33    1394.06
 
 Profit for the year after 
 charging all expenses but
 before providing interest, 
 depreciation, exceptional 
 item and tax                    312.92    409.28     342.78     428.27
 
 Interest                          5.04     10.49       7.75      14.47
 
 Profit before depreciation, 
 exceptional item and tax        307.88    398.79     335.03     413.80
 
 Depreciation                     39.33     39.54      48.62      49.94
 
 Profit before taxation and 
 exceptional item                268.55    359.25     286.41     363.86
 
 Payment under Voluntary 
 Retirement Scheme                12.73         —      12.73          —
 
 Profit before Taxation          255.82    359.25     273.68     363.86
 
 Provision for taxation -
 Current Tax                      94.24    116.00      96.29     117.69
 
 MAT Credit                           —         —          —     (0.07)
 
 Earlier years                        —      0.08       0.15       0.11
 
 Deferred                       (10.74)     11.00    (11.87)      11.28
 
 Profit for the year             172.32    232.17     189.11     234.85
 
 Balance brought forward from 
 the earlier year                110.46     44.39     211.13     142.97
 
 Transfer from Debenture 
 Redemption Reserve               68.04      3.90      68.04       3.90
 
                                 350.82    280.46     468.28     381.72
 
 Which has been appropriated 
 as under :
 
 Dividend paid on Equity Shares    4.18         —       4.18          —
 
 Proposed Dividend on Equity 
 Shares                           68.38     60.03      68.38      60.03
 
 Dividend Tax                     11.79      9.97      11.79       9.97
 
 Transfer to General Reserve     100.00    100.00     100.00     100.00
 
 Reserve Fund                         —         —       0.26       0.59
 
 Balance carried forward         166.47    110.46     283.67     211.13
 
                                 350.82    280.46     468.28     381.72
 
 
 BUSINESS REVIEW
 
 As per Central Statistical Organisation, the Indian Economy - led by a
 resurgence in agriculture, services and manufacturing sectors - is
 estimated to grow by a robust 8.6% in FY 2010- 11. In 2009-10, the
 Indian Economy grew by 8%. The farm sector which grew by a meagre 0.4 %
 in 2009-10 is estimated to turnaround with an impressive 5.4% growth in
 2010-11, while manufacturing and services sectors are expected to post
 consistent growth levels of 8% and 9.6% respectively.
 
 The GDP forecast for 2011-12 is set at 9%, subject to certain
 assumptions.
 
 The United Nations Industrial Development Organisation, in one of its
 publications, has commended India for its strong economic growth and
 has ranked India as one of the top 10 manufacturers of the world for
 the year 2010.
 
 The world economy too registered a rapid recovery - led by Asia in the
 front, hopefully leaving the worst economic recession behind us.
 Despite the myriad challenges faced by
 
 the global economy, the forecast for world GDP for 2011 has been
 upgraded, thus signalling slow but steady revival.
 
 GRAPHITE INDIA
 
 Gross sales for 2010-11 were Rs. 1280 crore as against Rs. 1178 crore
 in the previous year and PAT was Rs. 172 crore for the current year as
 against Rs. 232 crore in the previous year.
 
 The Companys Graphite and Carbon Segment (Graphite Electrodes)
 continues to be the main source of income and profit for the Company,
 accounting for about 81% of the total revenues.
 
 With improved market demand for electrodes, capacity utilisation
 registered a steady rise every quarter and the growth in sales was
 driven entirely by volume growth. While volumes increased, electrode
 prices declined virtually throughout the year and are reflected in the
 declining PAT.
 
 Capacity utilization of the German Operations improved as compared to
 previous year. However due to softening of prices, results continue to
 be depressed.
 
 DIVIDEND
 
 The Directors are pleased to recommend the payment of Dividend @ Rs.
 3.50 per equity share on equity shares of Rs. 2 each.
 
 FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)
 
 Out of the FCCB amounting to USD 40 mn raised in 2005 with maturity
 date in October-2010:
 
 35,925 Bonds were converted into 285,91,033 equity shares; 
 
  3,875 Bonds were bought back; and 
 
    200 Bonds were redeemed.
 
 Additional Disclosures
 
 In line with the requirements of the Listing Agreements and the
 Accounting Standards of the Institute of Chartered Accountants of
 India, your Company has made additional disclosures in respect of
 consolidated financial statements, related party transactions and
 segmental reporting.
 
 Research & Development
 
 The R&D Centre was established in 1976 and since its inception, it has
 played a pivotal role in the development of
 
 new products and process routes that have given the Company a
 competitive advantage in local and global markets.
 
 Research & Development initiatives were carried out in the areas of raw
 materials, productivity, process development, process improvement,
 reduction in carbon emission, etc.  Many of the cost savings achieved
 were significant and in compliance with the “pollution control and
 clean environment norms”. These R&D efforts are continual and by
 benchmarking, the operational efficiencies of manufacturing facilities
 at different locations were compared and steps were taken for process
 improvement and achieving operational synergies. The focus is on
 further development and improvement of standards.
 
 Besides, the R&D initiatives in the areas of new product development,
 speciality products and Carbon-Carbon Composite Brake Discs for defence
 applications, continue.
 
 PUBLIC DEPOSITS
 
 The Company is not accepting public deposits. There is no unclaimed
 deposit during the year.
 
 Subsidiary Companies
 
 Carbon Finance Limited is a wholly owned Indian Subsidiary; Graphite
 International BV in The Netherlands and Carbon International Holdings
 NV in Curacao (previously Netherlands Antilles) are the wholly owned
 overseas subsidiaries of the Company.
 
 The overseas subsidiaries recorded a turnover of Euro 47.72 mn as
 compared to Euro 39.73 mn in the previous period. The profit before tax
 of these overseas subsidiaries was Euro 0.16 mn and profit after tax
 was Euro 0.13 mn (as against Euro 1.07 mn and 0.86 mn).
 
 The Company earned by way of Royalty Rs. 3.35 crore during the year, as
 against Rs. 3.13 crore in the previous year, from overseas
 subsidiaries.
 
 The Ministry of Corporate Affairs by a Circular dated 8 February, 2011
 has granted exemption from the provisions of Section 212 of the
 Companies Act, 1956 with regard to the attachment of the accounts,
 reports, statement in terms of Section 212(1)(e), etc. of its
 subsidiaries as part of its Accounts. The Board of Directors of the
 Company has by a resolution given consent for not attaching the balance
 sheet of its subsidiaries. The Annual Accounts of subsidiary companies
 and the related detailed information will be made available to the
 holding and subsidiary company investors seeking such information at
 any point of time. The annual
 
 accounts of the subsidiary companies will also be kept for inspection
 by any shareholder in the Registered Office of the Company and that of
 the subsidiaries. The Company shall furnish a hard copy of details of
 accounts of subsidiaries to any shareholder on demand.
 
 The Consolidated financial statement of the Company along with those of
 its subsidiaries prepared as per AS-21 forms part of the Annual Report.
 
 Information pursuant to Section 217 of the Companies Act, 1956
 
 Information in accordance with clause (e) of sub-section (1) of Section
 217 of the Companies Act, 1956 read with the Companies (Disclosure of
 Particulars in the Report of Board of Directors) Rules, 1988 and
 forming part of the Directors Report for the year ended 31 March, 2011
 is given in Annexure 1.
 
 Particulars pursuant to Section 217(2A) of the Companies Act, 1956 read
 with the Companies (Particulars of Employees) Rules, 1975 and forming
 part of the Directors Report for the year ended 31 March, 2011 are
 given in Annexure 2.
 
 DIRECTORS
 
 Mr. A. V. Lodha, Mr. N. S. Damani and Mr. K. K. Bangur, Directors of
 the Company, retire by rotation at the ensuing Annual General Meeting
 and being eligible, offer themselves for reappointment.
 
 Recognition/Award
 
 The Company continues to enjoy the status of a Star Trading House for a
 period of five years effective 1 April, 2009 till 31 March, 2014. This
 year too, the Company received the following awards for export
 performance –
 
 - from EEPC, Eastern Region, Award for Export Excellence for export
 performance during the year 2008-09; and
 
 - from CAPEXIL - Special Export Award for 2009-10.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions of Section 217(2AA) of the Companies Act,
 1956, the Directors state –
 
 1.  that in the preparation of the Annual Accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material departures.
 
 2.  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 as at 31 March, 2011 and of
 the profit of the Company for the year ended 31 March, 2011.
 
 3.  that they 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; and
 
 4.  that they have prepared the annual accounts on a going concern
 basis.
 
 Corporate Governance Report
 
 A Report on Corporate Governance along with a Certificate of Compliance
 from the Auditors forms part of this Report.
 
 Auditors
 
 Price Waterhouse, Chartered Accountants, Auditors of the Company retire
 and are eligible for re-appointment.
 
 Cost Auditor
 
 Mani & Co., Cost Auditors, who conducted audit of the cost accounts
 relating to Mini Steel Plant of Powmex Steels Division of the Company
 for the Financial Year 2009-2010 filed the Cost Audit Report with the
 Ministry of Corporate Affairs, Government of India on 6 September,
 2010. The due date for filing the said Report was 30 September, 2010.
 
 Acknowledgement
 
 Your directors place on record their appreciation of the assistance and
 support extended by all government authorities, financial institutions,
 banks, consultants, solicitors and shareholders of the Company. The
 directors express their appreciation of the dedicated and sincere
 services rendered by employees of the Company.
 
 
 
 
                                               On behalf of the Board
 
 
                                                         K. K. Bangur
                                                             Chairman
 
 
 Kolkata
 Date : May 9, 2011