Anant Raj Industries Ltd

To the Members,

The Directors take pleasure in presenting the Twenty Sixth Annual Report of the Companytogether with the Consolidated audited accounts for the year ended March 31, 2011.

Financial Results

Operations

As you are aware your Company had consolidated its various group companies carryingsimilar business activities by way of a series of mergers and acquisitions. After the saidmergers your Company's main focus is on the development of IT Parks, hospitality andhousing projects, shopping mall & commercial complexes.

Your Company is diligently deploying its resources and has executed certainHospitality, IT Projects, Commercials and IT SEZ Projects. The Rents from these projectshave increased significantly during the year under review.

Your Company during the year under review, has posted Consolidated Net Profit After taxof Rs. 16783.65 Lacs as compared to Rs. 23824.91 Lacs during the previous year.

Your Company during the year under review, has posted Standalone Net Profit After taxof Rs. 16746.93 Lacs as compared to Rs. 23716.70 Lacs during the previous year.

Tile Division

With the restructuring of the Group since 2005, your Company’s main focus is onInfrastructure and Development such as IT Parks, Hospitality, Housing Projects &Commercials Complexes, etc. Tile manufacturing business has become insignificant. Yourmanagment is exploring various possiblities for this business including re-establishing,re-location of tile manufacturing facility.

Rental Income

Rental Income of your Company has been increased from Rs. 49 Crores to Rs. 76 Croresthis year

Land Acqusition

Your Company, during the year has purchased approximately 218 Acres of land in Gurgaon,Manesar, Sonepat in Haryana, Delhi, and Neemrana, Rajasthan with developable area 10.70Mn. Sq. Feet and 2.80 lac Sq. Yards for plotted Development. Total acquisition cost of theland is around Rs. 837 Crores.

The new land acquisition has created strong pipeline for additional residentialdevelopment for next 4 years.

Projects launched during the year

Residential

During the year under review your Company has launched the following residentialprojects :

Projects DEL-37 & Madelia have been fully sold out during the year.

Projects completed during the year

Retail

Your Company through its Subsidiary, M/s Anant Raj Projects Limited, has constructedand developed a commercial mall "Moments" at Kirti Nagar in West Delhi havingleasable area 6 lac Sq.Ft. The project has been fully completed and operational and willgenerate rental incomes from the current financial year. Project is adjacent to MetroStation, Kirti Nagar, New Delhi.

Hospitality

Your Company's hospitality projects named "Park Land Exotica", "ParkLand Retreat ", "Hotel Mapple" is already operational and generatingrevenues.

Your Company's hospitality project Hotel Tricolor is fully completed and leased out toOrchid Hotels Limited and will be generating revenues from current year.

Projects under development

Commercial

Your Company is developing IT SEZ with developable area 2.1 Mn.Sq.Feet at Rai, Sonepatwhich is expected to be completed by March, 2012

IT Park with developable area 0.6 Mn.Sq.Feet at Panchkula, Haryana expected to becompleted by March 2013. The project is being developed through subsidiary of yourCompany, M/s Rolling Construction Pvt Ltd in joint venture with Monsoon Capital, USA.

Projects in pipeline

a) Residential -

b) Commercial -

Dividend

The Board of Directors, subject to approval of shareholders at the ensuing AnnualGeneral Meeting, has recommended a dividend @ 30% (Rs. 0.60 per equity share of Rs. 2/-each) for the year ended March 31, 2011. The cash outflow on account of dividend will beRs. 1770.58 lacs and Corporate dividend tax would be Rs. 287.23 lacs.

Issue of Securities

The Company, during the year under review, issued and allotted 1750 (One Thousand SevenHundred Fifty) Secured Listed Redeemable Non-Convertible Debentures (NCDs) of Rs.10,00,000/- each agreegating to Rs. 175 Crores on private placement basis.

Forfeiture of Warrants

The holder of 2,00,00,000 (Two Crores) Fully Convertible Warrants issued by the Companyduring the year ended March 31, 2010 had not exercised their option to convert the sameinto equity till last date of exercise of option i.e. January 9, 2011 and hence the amountreceived as application money on account of share warrants amounting to Rs. 43,50,00,000/-was forfeited in terms of SEBI (ICDR) Regulations.

Transfer to Reserves

In accordance, with the statutory provisions, your Company has transferred a sum of Rs.1674.69 lacs to the General Revenue.

Credit Rating

Your Company has been granted "CARE A - (SINGLE A MINUS)" rating to theaforesaid issue of non-convertible Debentures by CARE (Credit Analysis Research Limited)

Share Capital

The paid-up share capital as on March 31, 2011 was Rs. 59,01,92,670 divided into29,50,96,335 equity shares of Rs. 2/- each. There has been no increase in the paid-upshare capital of the Company during the year.

Listing of Shares

The Company’s equity shares are listed at Bombay Stock Exchange & NationalStock Exchange and GDRs are listed at Luxembourg Stock Exchange. The listing fee for theyear under review has been paid to the Stock Exchanges.

Fixed Deposits

The Company has not invited or accepted any fixed deposits from the public in terms ofprovisions of Section 58A of the Companies Act, 1956 read with the Companies (Acceptanceof Deposits) Rules, 1975.

Insurance

The Company's properties including Building, Plant and Machinery, Stocks, Stores, etc.,have been adequately insured against major risks.

Organisation Structure

During the financial year ended 31st March 2011, there has not been any major change inthe organization structure of the Company. Your Company continues to be governed by itsBoard of Directors under the day to day control and management being exercised by theManaging Director and the Chief Executive Officer of the Company.

Statement Pursuant to Section 217(1)e and Section 217(2A) of the Companies Act, 1956

A statement pursuant to Section 217(e) and Section 217(2A) of The Companies Act, 1956,read with Companies (Disclosure of Particulars in report of Board of Directors) annexedhereto and forms part of the Director’s Report.

Management Discussion & Analysis Report

Management Discussion & Analysis Report is given in Annexure forming part of thisreport.

Corporate Governance Report

As per the requirements of Clause-49 of the Listing Agreement a separate report onCorporate Governance is given in Annexure, which forms part of this report. The Auditorscertificate on compliance under Corporate Governance is also annexed.

Directors Responsibility Statement

The Board of Directors hereby confirms and accepts the responsibility for the followingin respect of the audited annual accounts for the financial year ended March 31, 2011:

(i) that in the preparation of the annual accounts, the applicable accounting standardshad been followed along with proper explanation relating to material departures;

(ii) that the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the year ended on that date;

(iii) that the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the directors have prepared the annual accounts on a going concern basis

Subsidiaries and Group Companies

The Ministry of Corporate Affairs vide its General circular No. 2/2011, dated February08, 2011 has granted a general exemption under Section 212(8) of the Act to all theCompanies from annexing the annual accounts and other statements of subsidiary companieswith the annual report of the holding company.

A statement setting out important financials of the subsidiary companies is attachedand forms a part of this Annual Report.

The Annual accounts of the subsidiaries are also available for inspection for anymember/investor, during the business hours, at the Registered Office of the Company andthe same can be accessed from the website of the Company i.e. www.anantraj.com.

Directors

Pursuant to Section 256 of the Companies Act, 1956 read with the Clause 86 of Articlesof Association of the Company, Shri Amit Sarin and Shri Brajindar Mohan Singh, retire byrotation at the ensuing Annual General Meeting and being eligible have offered themselvesfor reappointment.

Brief resume of the Directors seeking appointment/ reappointment together with thenature of their expertise in specific functional areas and names of companies in whichthey hold directorships and membership of Board/ Committees and number of shares held asstipulated under Clause 49 of the Listing Agreement are stated in the notice forming partof this Annual Report.

Auditors

B. Bhushan & Co., Chartered Accountants, Auditors of the Company, retire at theconclusion of the ensuing Annual General Meeting and being eligible have offeredthemselves for re-appointment.

Acknowledgements

The Directors place on record their appreciation for the assistance, help and guidanceprovided to the Company by the Bankers and authorities of State Government from time totime. The Directors also place on record their gratitude to employees and shareholders ofthe Company for their continued support and confidence in the management of the Company.

Annexure to Director’s Report

(Referred in report of even date)

Statement pursuant to Section 217(1)(e) of the Companies Act, 1956, read with Companies(Disclosure of Particulars in the Report of Board of Directors)

A. Energy Conservation (Tile Division)

(i) Energy Conservation measures taken:

The Company has a regular program for maintenance of machineries to ensure optimumutilization of energy resources. The management has developed measures, checks and systemsto ensure economy in consumption of energy resources, especially power and fuel costs.

(ii) Additional investment and proposals, if any, being implemented for reduction ofconsumption of energy:

The Company has developed systems to identify areas for making investment andimplementing proposals to reduce consumption of energy resources and for optimumutilization of limited energy resources.

(iii) Impact of measures taken at (i) and (ii) above for reduction of energyconsumption and consequent impact on the cost of production of goods :

The reduction in consumption of energy resources has resulted in reducing the cost ofproduction of finished goods.

B. Technology Absorption (Tile Division)

(i) Specific areas in which R&D carried out by the Company:

Consumption of indigenous raw materials and spares while continuing to maintain highquality of finished products.

(ii) Benefits derived as a result of above R&D:

Saving in foreign exchange outgo and indegenisation of the products.

(iii) Future plan of action:

Endeavor to manufacture finished products confirming to established Standards andquality.

(iv) Expenditure on R&D:

The expenditure incurred on research and development activities is intrinsic to theother costs of production and therefore it is not possible to quantify the expenditureseparately.

Technology absorption, adaptation and innovation

(i) Efforts in brief, made towards technology absorption, adaptation and innovation:

The imported technological know-how for manufacture of ceramic tiles has been fullyabsorbed and adapted by the Company’s personnel in the production process.

(ii) Benefits derived as a result of the above efforts:

Improved manpower resources and reduction of dependency on foreign technology andknow-how.

In case of imported technology:

(i) Technology Imported:

Manufacture of ceramic glazed floor and wall tiles by use of single fast firingprocess.

(ii) Year of Import : 1988-89

(iii) Has technology been fully absorbed: Yes

C. Foreign Exchange Earning and Outgo

Your Company incurred an expenditure of Rs. 62.50 lacs during the year which resultedin outflow of foreign exchange.

Particulars of Employees

Pursuant to Companies (Particulars of Employees) Amendment Rules, 2011 dated 31stMarch, 2011 and Section 217(2A) of the Companies Act, 1956), the particulars of employeesforming part of the Directors’ Report for the year ended March 31, 2011:

Note:

1. Gross Remuneration comprises salary, House Rent Allowance and Company’scontribution to Provident Fund Account.

2. Shri Anil Sarin is a relative of Shri Ashok Sarin, Chairman of the Company and ShriAmit Sarin, Director & CEO of the Company.

3. Shri Anil Sarin holds 9.75% of the paid-up share capital of the Company.