The year 2010 - 11 has been a turnaround year for Chola.  The company
 emerged from a challenging environment to once again claim its place as
 a strong player in the NBFC space, with solid and sustainable growth.
 The three Asset Management businesses-Vehicle Finance, Home Equity and
 Corporate Mortgage Finance made a significant contribution to the
 companys bottom line. Capitalizing on the buoyancy in the market, the
 company increased its volume in Vehicle Finance and Home Equity, with
 aggregate disbursements of Rs.5731 crores, the highest ever by both
 these verticals. More importantly, portfolio performance from these two
 verticals continue to be very strong. Vehicle Finance has had Net
 Credit Losses(NCL) of Rs.21.80 crores, and Home Equity has had NCL of
 Rs.3.80 crores. Vehicle Finance NCL numbers are the lowest ever
 achieved to date.
 
 Chola continues to compete as a multi-line lender in the industry. We
 have, however, made conscious choices in terms of the segments in which
 we compete. We have significantly reduced our exposure to unsecured
 lending and it is our intent to stay away from this business until
 environmental and legal conditions in the unsecured lending business
 significantly change. For the most part, it is also our intent to
 restrict our lending to the productive end of the segment versus the
 consumptive end.
 
 This year has also been a year focused on strengthening our core. We do
 believe that the process of strengthening our core will continue well
 in to the 2011-12 financial year, and perhaps the year after as well.
 The focus of this imitative is to improve customer service whilst also
 improving portfolio quality. We are doing this by improving our internal 
 processes, strengthening our technology platform, and investing 
 significantly in terms of training our people. Over the last twelve 
 months, all of our teams have delivered extremely robust business 
 results.
 
 Kaushik Banerjee and his team at Vehicle Finance were on the right
 track with their strategies for growth. Vehicle Finance increased its
 market share by expanding its presence in Tier III and Tier IV towns
 and rural areas. The business posted a 57% increase in disbursements
 over the past year, The collections team also produced strong results
 with a closing ACL of 0.36%.
 
 Kaushik also led the Corporate Mortgage division to establish its mark
 in the HNI and promoter funding space, despite intense competition and
 volatile stock market fluctuations.
 
 Chola has emerged a key player among NBFCs in the Home Equity business
 in the short span of four years. During the year Rohit Phadke and his
 team redefined the business with personalized customer service and
 faster turnaround on loan disbursements. Reducing operating cost to
 income ratio and enhancing team productivity, the division increased
 its asset book by 49% over the previous year, meeting ambitious stretch
 targets.
 
 The subsidiaries too, turned in reasonably good performances,
 considering the volatile market conditions. I am sure Jaikumar and team
 from Cholamandalam Distribution Services and Mariam and her colleagues
 from Cholamandalam Securities will seize opportunities for greater
 growth this year.
 
 Good treasury management is crucial to all businesses, to finance
 institutions - it is critical. The continued efforts of Arulselvan and
 his team towards strengthening the treasury, focusing on credit ratings
 and bringing in business intelligence and good asset liability
 management, all contributed to increase in profit margins.
 
 Regulatory Compliance and Stakeholder management is vital.  At a time
 when the company has gone through a difficult phase, Sujatha and her
 team from Secretarial rose to the occasion with true professionalism
 and dedication. The team ably supported the company in its transition
 and its fund raising activities of equity as well as debt capital,
 ensuring compliance in a dynamic regulatory environment.
 
 Our new venture into the Gold Loan business is part of our strategy for
 expansion and future growth. I am sure Pravin Salian and his team will
 capitalize on the strength of the Chola brand and the captive customer
 base to script another success chapter in the companys history.
 
 At Chola this turnaround year has provided us with a great learning.
 When you try to surmount challenges that most believe is impossible,
 you go beyond what you had hitherto believed is possible. And therein
 lies the truth of a turnaround.
 
 Best Wishes,
 
 Vellayan Subbiah