The Members
 
 The Directors have pleasure in presenting the Eighteenth Annual Report
 on the business and operations of the Company together with the Audited
 Accounts for the year ended March 31, 2011.
 
 FINANCIAL RESULTS
 
                                                             Rs. Lakhs
 
                             CONSOLIDATED           STANDALONE
 
                         Year Ended March 31      Year Ended March 31
 
                           2011         2010         2011        2010
 
 INCOME
 
 Sales, Operating and 
 Other Income         8,04,193.76  8,29,150.01  5,91,518.42  5,99,821.36
 
 Profit Before 
 Taxation             1,03,947.78  1,00,768.49    42,031.59    72,010.30
 
 Provision for 
 Taxation               38,495.90    36,428.40    14,200.00    23,372.19
 
 Net Profit after 
 Taxation               65,451.88    64,340.09    27,831.59    48,638.11
 
 Add: Share of 
 Profit/(Loss) of 
 Associates                261.13    (1,779.66)       -            -
 
 Less: Elimination of 
 Unrealized Profit on 
 Transactions with 
 Associate               4,073.48     7,553.14        -            -
 Companies
 
 Less: Share of Minority 
 Interest               17,032.65     9,152.40        -            -
 
 Net Profit after 
 Taxation, Minority 
 Interest and Share 
 of Profits of          44,606.88    45,854.89        -            -
 Associates
 
 Surplus brought 
 forward              1,19,810.35    77,955.34   1,07,176.33    58,538.22
 
 Profit Available 
 for Appropriation    1,64,417.23 1,23, 810.23   1,35,007.92  1,07,176.33
 
 Transfer (from)/to 
 Debenture Redemption 
 Reserve                   -           (242.27)       -            -
 
 Transferred to 
 General Reserve         3,000.00     1,900.00        -            -
 
 Balance Carried to 
 Balance Sheet        1,61,417.23  1,22,152.50   1,35,007.92  1,07,176.33
 
 DIVIDEND
 
 As a measure of prudence and with a view to conserve resources for
 funding the business plans of the Company, no dividend on the Equity
 Shares for the year ended 31st March, 2011 was recommended.
 
 OPERATIONS REVIEW
 
 On a Consolidated basis your Company has reported Gross Revenues of Rs.
 8,04,193.76 Lakhs as against Rs. 8,29,150.01 Lakhs of Revenues registered
 in the Previous Year. Total Expenditure for the Year was Rs. 7,00,245.98
 Lakhs as against Rs. 7,28,381.52 Lakhs in the Previous Year. The Earnings
 Before Interest, Tax, Depreciation and Amortization (EBITDA) amounted
 to Rs. 2,14,866.05 Lakhs while the same was Rs.1,71,097.50 Lakhs for the
 Previous Year i.e. an increase of 26%. The Profit Before Taxation stood
 at Rs. 1,03,947.78 Lakhs, an increase of 3% as compared to Rs. 1,00,768.49
 Lakhs in the Last Year.
 
 The Net Profit after Tax after adjustment of Minority Interest and
 Share of Profits of Associates was Rs. 44,606.88 Lakhs as against Rs.
 45,854.89 Lakhs for the Previous Year.
 
 Gross Interest and Finance charges on consolidated basis amounted to Rs.
 75,544.86 Lakhs in comparison to Rs. 35,541.08 Lakhs due to increase in
 loans and Working Capital Requirements for Project Execution.
 
 A detailed discussion on the results of the operations and the
 financial condition is included in the Management Discussion and
 Analysis section placed at Annexure-II to this report.
 
 BUSINESS REVIEW
 
 A detailed business review is being given in the Management Discussion
 and Analysis Section of the Annual Report placed at Annexure-II to this
 report.
 
 SUBSIDIARY COMPANIES
 
 During the year, the following companies have become subsidiaries of
 the Company:
 
 Lanco Solar Energy Private Limited (Formerly known as Lanco Solar
 Projects (India) Private Limited), Bhanu Solar Projects Private
 Limited, Diwakar Solar Projects Private Limited, Khaya Solar Projects
 Private Limited, Himavat Power Private Limited, Arneb Power Private
 Limited, Regulus Power Private Limited (Formerly known as Nandigama
 Power Private Limited), Lanco Kanpur Highways Limited, JH Patel Power
 Project Private Limited, Lanco Solar Services Private Limited, Lanco
 Solar Holding Netherland BV, Lanco Solar International Pte Limited,
 Lanco Holding Netherland BV, Green Solar SRL, Lanco Enterprise Pte
 Limited (China), Lanco Solar International Limited, Lanco Italy PV1
 Investments BV, Lanco Italy PV2 Investments BV, Lanco Spain PV1
 Investments BV, Lanco Solar International USA Inc., LE New York – LLC,
 Lanco Resources International Pte Limited, Lanco Power International
 Pte Limited, Lanco Resources Australia Pty Limited, The Griffin Coal
 Mining Company Pty Limited, Carpenter Mine Management Pty Limited,
 Lanco Energy Africa, Inversion Solar Andalucia 14 SLU, Lanco Rocky Face
 Land Holdings LLC, Lanco Tracy City Land Holding LLC (USA), Lanco North
 Park Land Holding One LLC (USA), Lanco North Park Land Holding Two LLC
 (USA), Apricus S.R.L., Lanco Solar Project Development SLU.
 
 During the year, the names of the following subsidiaries have been
 changed:
 
 Lanco Kondapalli Power Limited (Formerly Lanco Kondapalli Power Private
 Limited), Lanco Tanjore Power Company Limited (Formerly Aban Power
 Company Limited), National Energy Trading and Services Limited
 (Formerly Lanco Power Trading Limited), Lanco Teesta Hydro Power
 Private Limited (Formerly Lanco Energy Private Limited), Lanco Budhil
 Hydro Power Private Limited (Formerly Lanco Green Power Private
 Limited), Lanco Mandakini Hydro Energy Private Limited (Formerly Lanco
 Hydro Energies Private Limited), Lanco Power Limited (Formerly Lanco
 Amarkantak Power Limited), Lanco Vidarbha Thermal Power Limited
 (Formerly Lanco Vidarbha Thermal Power Private Limited), Regulus Power
 Private Limited (Formerly Nandigama Power Private Limited), Lanco
 International Pte Limited (Formerly Lanco Enterprise Pte Limited).
 
 NOTE ON PARTICULARS REQUIRED AS PER SECTION 212 OF THE COMPANIES ACT,
 1956
 
 In terms of the provisions of Section 212 of the Companies Act, 1956,
 the Company was required to attach the Annual Reports of the Subsidiary
 Companies and the related detailed information to the Balance Sheet of
 the Holding Company. However, the Ministry of Corporate Affairs vide
 their General Circular No. 2/2011 dated 8th February, 2011 granted
 general exemption to the Companies under Section 212(8) from the
 requirement to attach detailed financial statements of each subsidiary.
 Accordingly, the Annual Report does not contain the financial
 statements of the subsidiaries. The detailed financial statements and
 audit reports of each subsidiary are available for inspection at the
 registered office of the Company and upon written request from a
 shareholder, your Company will arrange to send the financial statements
 of subsidiary companies to the said shareholders.
 
 HEALTH, SAFETY AND ENVIRONMENT
 
 The Lanco group has adopted focused approach on the subject of Health,
 Safety and Environment (HSE) by creating awareness and synergies among
 the business units. This journey aims towards a phase of sustainable
 growth, characterized by a holistic approach that is fully integrated
 into business models.
 
 Many of the plants and project sites are conferred with the coveted
 Integrated Management System (ISO 9001, ISO 14001 & OHSAS 18001)
 bringing sustained efforts and a better perspective towards achieving
 HSE excellence. During the year, Lanco Tanjore Power Company Limited
 (Formerly Aban Power Company Limited) received the Safety Appreciation
 Award from National Safety Council (February, 2010) and the G3 - Good
 Green Governance Award at Delhi for its best eco-friendly practices.
 
 DIRECTORS
 
 In accordance with the provisions of the Companies Act, 1956 and the
 Articles of Association of the Company, Dr. P. Kotaiah, Mr. P.  Abraham
 and Mr. G. Bhaskara Rao, Directors retire by rotation and being
 eligible offer themselves for re-appointment.
 
 Your Board of Directors re-appointed Mr. L. Madhusudhan Rao as
 Executive Chairman and Mr. G. Bhaskara Rao as Executive -
 
 Vice Chairman for a further period of 5 years with effect from 1st
 April, 2011 and Mr. G. Venkatesh Babu as Managing Director of the
 Company for a further period of 5 years with effect from 24th June,
 2011. These re-appointments are subject to approval of the Members at
 the ensuing Annual General Meeting.
 
 During the Financial Year 2010-11, the Board of Directors appointed Mr.
 S. C. Manocha as an Additional Director with effect from 14th August,
 2010. He was also appointed as a Wholetime Director for a period of
 five years from the same date, subject to the approval of the Members
 at the ensuing Annual General Meeting. In terms of Section 260 of the
 Companies Act, 1956 he shall hold office upto the date of the ensuing
 Annual General Meeting of the Company. The Company has received
 requisite Notice in writing from a Member proposing his candidature for
 the office of Director liable to retire by rotation.
 
 DEPOSITS
 
 Your Company has not accepted deposits falling within the provisions of
 Section 58A of the Companies Act, 1956 read with the Companies
 (Acceptance of Deposits) Rules, 1975 during the year under review.
 
 AUDITORS
 
 S.R. Batliboi & Associates, Chartered Accountants and Brahmayya & Co.,
 Chartered Accountants, Auditors of the Company, will retire at the
 conclusion of the Annual General Meeting.
 
 S.R. Batliboi & Associates, Chartered Accountants and Brahmayya & Co.,
 Chartered Accountants, have conveyed their willingness to accept
 appointment and confirmed their eligibility under Section 224 (1B) of
 the Companies Act, 1956.
 
 COST AUDITORS
 
 Pursuant to Order from the Ministry of Corporate Affairs, DZR & Co.,
 Cost Accountants have been appointed as Cost Auditors for the year
 2011-12. They are required to submit the report to the Central
 Government within 180 days from the end of the accounting year.
 
 DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY,
 TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 We present the abridged accounts under Section 219 of the Companies
 Act, 1956 (the Act). Pursuant to the Companies (Central Government''s)
 General Rules and Forms, 1956 read with Section 219 of the Act, the
 Particulars of Conservation of Energy, Technology Absorption and
 Foreign Exchange Earnings and Outgo as required by Section 217(1)(e) of
 the Act, read with the Companies (Disclosure of Particulars in the
 Report of Board of Directors) Rules, 1988 have not been provided.
 However, these particulars are available for inspection at the
 Registered Office of the Company and upon written request from a
 shareholder, we will arrange to mail these details.
 
 DISCLOSURE ON COMPANY''S EMPLOYEES STOCK OPTION PLANS
 
 The Employees Stock Option Plan – 2006 and the Employees Stock Option
 Plan – 2010 were approved by shareholders by passing Special
 Resolutions in the Extraordinary General Meeting held on 7th June, 2006
 and Annual General Meeting held on 31st July, 2010, respectively.
 
 The required information relating to the said schemes pursuant to
 Clause 12 of the SEBI (ESOS/ESOP) Guidelines, 1999, are enclosed as
 Annexure-I.
 
 PARTICULARS OF EMPLOYEES
 
 We present the abridged accounts under Section 219 of the Companies
 Act, 1956 (the Act). Pursuant to the Companies (Central Government''s)
 General Rules and Forms, 1956 read with Section 219 of the Act, the
 Particulars of Employees as required by Section 217(2A) of the Act,
 read with the Companies (Particulars of Employees) Rules, 1975 have not
 been provided. However, these particulars are available for inspection
 at the Registered Office of the Company and upon written request from a
 shareholder, we will arrange to mail these details.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 The Management Discussion and Analysis as required under Clause
 49(IV)(f) of the Listing Agreement is enclosed as Annexure-II.
 
 CORPORATE GOVERNANCE
 
 The Report on Corporate Governance is given separately in this Annual
 Report. The Certificate of Practising Company Secretary certifying
 compliance in this regard is annexed to the said Report.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 As required by Section 217(2AA) of the Companies Act, 1956, your
 Directors hereby confirm that:
 
 (i) in the preparation of the annual accounts, the applicable
 accounting standards have been followed and that no material departures
 are made from the same;
 
 (ii) we have selected such accounting policies and applied them
 consistently and made judgements and estimates that are reasonable and
 prudent so as to give true and fair view of the state of affairs of the
 Company at the end of the financial year and of the profits of the
 Company for the period;
 
 (iii) we 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
 
 (iv) we have prepared the annual accounts on a going concern basis.
 
 INFORMATION ON AUDITORS'' OBSERVATIONS
 
 The Auditors'' Report on the Standalone Financial Statements does not
 contain any qualification. The observations of the Auditors in
 Paragraphs 4 & 5 in their Report on Consolidated Financial Statements
 read with Note nos. 4(xxiii) and 4 (xxvii) of Schedule 21 of the
 consolidated financial statements provide fullest information and
 explanation and hence are not required to be reiterated.
 
 RECENT DEVELOPMENTS
 
 Lanco through its Australian subsidiary, Lanco Resources Australia Pty
 Limited, has acquired The Griffin Coal Mining Pty Ltd (GCM) and
 Carpenter Mine Management Pty Ltd (CMM). Griffin Coal owns operational
 thermal coal mines in Western Australia, having coal resources of 1.1
 billion tonnes and producing over 4 million tonnes per annum (mtpa) of
 coal which can be ramped up to over 15 mtpa in the near term.
 
 A case was filed by Perdaman Chemical and Fertilizers Pty. Ltd
 (“Perdaman”) claiming damages against The Griffin Coal Mining Company
 Pty Ltd and the directors of the same, also including the Company and
 Lanco Resources Australia Pty. Ltd, another subsidiary of the Company
 in the Supreme Court of Western Australia alleging breach of a coal
 supply agreement and also alleging breach of the Australian Consumer
 Law.
 
 In response, the Company has appointed Clifford Chance, a renowned
 multinational law firm and one of the top queen counsel of Australia to
 represent us in the Court. Time till 2nd September, 2011 has been
 granted to us to file the counter reply.
 
 Further in respect to the application moved by Perdaman in the Court
 seeking an undertaking from The Griffin Coal Mining Company Pty Ltd
 that it will not enter into any charge, pledge or security with regard
 to its coal asset without giving Perdaman a notice of 10 days, the
 hearings in that matter have been completed on 27th July, 2011 and the
 decision thereon may be pronounced in course of time.
 
 ACKNOWLEDGEMENT AND APPRECIATION
 
 Your Directors take this opportunity to thank all the stakeholders
 including Shareholders, Financial Institutions, Banks, Customers,
 Suppliers and Regulatory and Governmental Authorities for their
 continued support to the Company. Directors also wish to place on
 record their sincere appreciation of Employees at all levels for their
 hard work, dedication and commitment.
 
                                       For and On behalf of the Board
 
                                   L. Madhusudhan Rao  G. Venkatesh Babu
                                   Executive Chairman  Managing Director
                                   DIN - 00074790      DIN - 00075079
 
 Place : Gurgaon, 
 Date  : 29.07.2011