The directors have pleasure in presenting the thirty third annual
 report together with the audited accounts of the company for the year
 ended 31 March, 2011.
 
 FINANCIAL RESULTS
 
                                                      Rs. in crores
 
                                                   2010-11  2009-10
 
 Gross income                                      1201.83   929.52
 
 Profit before tax                                  100.11    31.33
 
 Profit after tax                                    62.18    15.42
 
 Add: Balance brought forward                        56.46    55.55
 
 Amount available for appropriation                 118.64    70.97 
 
 Adjustments / Appropriation:
 
 Transfer to statutory and other reserves            15.55     3.09 
 
 Dividend
 
 - Equity                                            17.89     6.64
 
 - Preference                                         0.39     3.15 
 
 Tax on dividend                                      2.97     1.63 
 
 Balance carried forward                             81.84    56.46
 
 Total                                              118.64    70.97
 
 TERMINATION OF JOINT VENTURE
 
 During the year under review, the joint venture with DBS Bank Ltd.,
 Singapore (DBS) was terminated and the equity and preference shares
 held by DBS were bought by Tube Investments of India Ltd. (TII) and New
 Ambadi Estates Pvt. Ltd. (NAEPL) ,constituents of the Murugappa Group
 on 8 April, 2010. Further to this, the company changed its name to
 refect the change in the joint venture status of the company.
 
 SHARE CAPITAL
 
 During the year under review, the company increased the authorised
 capital from Rs.400 crores to Rs.420 crores and further made the
 following issues with the approval of shareholders:
 
 1. Issue of 1,08,93,852 equity shares of Rs.10/- each to International
 Finance Corporation (IFC), a qualified institutional buyer on a
 preferential basis at Rs.92/- per equity share aggregating to about
 Rs.100.22 crores.
 
 2. Conversion of 3,00,00,000, 1% fully convertible cumulative
 preference shares (FCCPS) of Rs.100/- each held by the existing
 promoters at a conversion price of Rs.92/- per equity share and alloted
 3,26,08,695 equity shares of Rs.10/- each on 17 May, 2010 in accordance
 with the SEBI (Issue of capital and disclosure requirements),
 Regulations 2009 (SEBI ICDR Regulations).
 
 3. On 6 October, 2010 the company made a further issue of 9,375,000
 equity shares of Rs.10/- each at Rs.160/- per equity share aggregating
 to Rs.150 crores being the price determined in accordance with the SEBI
 ICDR Regulations to the following investors:
 
 Name of the Investors                         Amount of
                                              Investment 
                                         (Rs. in crores)
 
 Amansa Investments Limited                        50.00
 
 Aquarius Investments Limited                      42.50
 
 India Capital Fund Limited                        18.00
 
 India Capital Opportunities 1
 Limited                                            4.50
 
 International Finance Corporation                 15.00
 
 Reliance Capital Trustee Limited
 A/c Reliance Banking Fund                         20.00
 
 Total                                            150.00
 
 In view of lack of appetite from the investors at competitive coupon
 rates for the instrument, the company did not place any preference
 shares during the year even though the shareholders had on 6 October,
 2010 approved an issue of 100,00,000 cumulative redeemable preference
 shares of Rs.100/- each aggregating to Rs.100 crores by way of private
 placement.
 
 Issue of perpetual debt & subordinated debt
 
 During the year, the company mobilized funds in the form of Perpetual
 Debt Instrument (PDI) aggregating to Rs.150 crores which qualifies
 partly as Tier I capital and partly as Tier II capital and subordinated
 debt to the tune of Rs.161.50 crores which forms part of Tier II
 capital as per RBI Guidelines.
 
 OPERATIONS
 
 During the year ended 31 March, 2011, the company recorded,
 
 - 48% growth in disbursements – (vehicle finance and home equity)
 
 - 33% growth in Net Managed Assets (including assigned assets)
 
 Disbursements in commercial vehicle finance for the year were at
 Rs.4496 crores as against Rs.2861 crores in the previous year.  The
 division achieved a growth of 57% over previous year.
 
 For the year, home equity business recorded a disbursement of Rs.1235
 crores as against Rs.1004 crores in the previous year.  The division
 achieved a growth of 23% over the previous year.
 
 The total business assets under management (net of provisions) of the
 company as at 31 March, 2011 increased to Rs.9133 crores from Rs.6850
 crores in the previous year. The company has seen a growth of 33% over
 the previous year.
 
 The profit before tax for the year was at Rs.100.11 crores as against
 Rs.31.33 crores in the previous year. Profit after tax was at Rs.62.18
 crores for the year as compared to Rs.15.42 crores in the previous
 year.
 
 DIVIDEND
 
 Your directors are pleased to recommend a dividend of Rs.1.50 per
 equity share of Rs.10 each.
 
 Your directors also recommend approval for the payment of the
 cumulative dividend on 3,00,00,000 fully convertible cumulative
 preference shares (FCCPS) of Rs.100/- each from 1 April, 2010 till 17
 May, 2010 being the date of conversion @ 1% coupon rate being Re.1 per
 preference share of Rs.100/- each.
 
 TRANSFER TO RESERVES
 
 Your company has transferred a sum of Rs.12.44 crores to statutory
 reserve as required by the Reserve Bank of India Act, 1934 and Rs.3.11
 crores to general reserves.
 
 OUTLOOK
 
 With the rebound of the economy and the spectacular growth witnessed in
 the automobile sector – specifically in the commercial vehicles
 industry, the outlook for the year ahead is promising. If the
 inflationary pressures are contained without any significant monetary
 compression, the year ahead will see the growth momentum sustained.
 
 FIXED DEPOSITS
 
 The company is classified as a systemically important non-deposit
 accepting non banking finance company (SI-ND-NBFC). It ceased taking
 deposits from public effective 1 November, 2006. At the time of
 conversion, the outstanding unmatured deposits were transferred to an
 escrow account together with the future interest payable thereon till
 the date of maturity and these are being repaid on maturity.
 Accordingly, there have been no fresh deposits accepted during the
 financial year 2010 - 11. Net of repayments, the matured and unclaimed
 deposits (including interest accrued) as at 31 March, 2011 were Rs.0.67
 crores.
 
 As at 31 March, 2011 and as on the date of this report, there were 267
 depositors whose deposits had matured but had not claimed the maturity
 amount aggregating to Rs.0.67 crores (along with interest accrued). As
 a process, the company sends periodical reminders to these depositors
 before transferring the sums due to the Investor Education and
 Protection Fund (IEPF) under Section 205C of the Companies Act, 1956.
 During the year, the company remitted a sum of Rs.0.08 crores to
 
 IEPF under this head representing unclaimed public deposits and
 interests thereon beyond seven years. In respect of outstanding fixed
 deposit of Rs.0.02 crores, the repayment to the depositors has been
 stayed by courts / instruction from CBI and not remitted to IEPF.
 
 CREDIT RATING
 
 Short Term:
 
 The companys short term debt of Rs.2000 crores is rated as A1+ by
 ICRA. During the year, CRISIL upgraded the companys short term debt
 rating from P1 to P1+ for Rs.250 crores.
 
 Long Term – Secured:
 
 ICRA re-affirmed its existing rating of LAA- to the various non
 convertible debentures and lines of credit from banks. During the year,
 ICRA revised the outlook on the above ratings to ‘positive from ‘under
 watch with developing implications.
 
 During the year, CARE affirmed the rating of CARE AA to the non
 convertible debenture programme of the company.
 
 Long Term - Unsecured:
 
 ICRA re-affirmed its existing rating of LAA - on the subordinated debt
 programme of the company. During the year, ICRA revised the outlook on
 the above ratings to ‘positive from ‘under watch with developing
 implications.
 
 Fitch re-affirmed its existing rating of AA - (ind) with Stable outlook
 on the subordinated debt programme of the company.  During the year,
 Fitch revised the outlook on the above ratings to ‘Stable from
 ‘Negative.
 
 The company ‘s Perpetual Debt Instrument (PDI) aggregating to Rs.150
 crores are dual rated as LA+ (Positive) by ICRA and CARE A+ by CARE.
 
 RBI GUIDELINES
 
 The company has complied with all the applicable regulations of the
 Reserve Bank of India as on 31 March, 2011.
 
 CAPITAL ADEQUACY
 
 The companys capital adequacy ratio was at 16.67% as on 31 March, 2011
 as against 14.80% as on 31 March, 2010. The minimum capital adequacy
 prescribed by RBI at 12% was revised to 15% effective 31 March, 2011.
 
 EMPLOYEE STOCK OPTION SCHEME
 
 Pursuant to the approval accorded by the shareholders at the twenty
 ninth annual general meeting of the company held in July 2007, the
 compensation & nomination committee had formulated the Employee Stock
 Option Scheme 2007. During the year under review, 5,04,300 options were
 granted to the
 
 employees of the company and its subsidiaries under the said scheme. As
 required under the Securities and Exchange Board of India (Employees
 Stock Option and Employees Stock Purchase Scheme) Guidelines, 1999
 (SEBI Guidelines), the following details of this scheme as on 31 March,
 2011 are being provided:
 
 Nature of Disclosure       Particulars
 
 a. Options granted         21,02,243 options in 7 tranches since 
                            30 July, 2007. Each option gives the 
                            grantee a right to subscribe to one equity 
                            share of Rs.10/- each in the company.
 
 b. The pricing formula     The options were granted at an exercise 
                            price equal to the latest available closing
                            price of the equity shares on the Stock 
                            Exchange in which there was highest 
                            trading volume, prior to the date of grant 
                            of the options.
 
 c. Options vested          2,44,298
 
 d. Options exercised       3,652
 
 e. The total no. of 
    shares arising as a     3,652 (Pending allotment as on 31 
                            March, 2011)
    result of exercise 
    of option
 
 f. Options lapsed/
    surrendered             11,17,310
 
 g. Variation of terms of 
    Option                  The compensation & nomination committee
                            at its meeting held on 30 July, 2008
                            revised the performance parameters of 
                            the employees for vesting. No terms were 
                            varied during the 2010-11.
 
 h. Money realised by 
    exercise of options     Rs.2,73,088/- 
 
 i. Total no of
    Options in force        9,81,281
 
 j. (i) Details of Options
    granted to Senior       Options granted till date to senior 
                            management personnel are as follows: 
    Management Personnel
 
                            Name & Designation of the 
                            Employee                    No. of Options 
                                                        granted
 
                            Kaushik Banerjee,
                            President – Asset Finance    69,995
 
                            D.Arulselvan, Sr. Vice 
                            President & CFO              43,773
 
                            Rohit Phadke, Sr. Vice
                            President & Business Head    43,773
                            - Home Equity
 
 (ii) Any other employee 
 who received               None 
 a grant in any one year
 of Option amounting to 5% 
 or more of Options granted 
 during the year
 
 (iii) Employees who were
 granted                    None 
 Options, during any one 
 year,equal to or exceeding 
 1% of the issued capital 
 of the company at the
 time of grant.
 
 k. Diluted Earnings Per 
 Share (EPS)                Rs.5.67/- 
 pursuant to issue of
 shares on exercise of 
 Option calculated in 
 accordance with 
 Accounting Standard 
 AS-20.
 
 l. (i) Difference between 
 the compensation           The employee compensation cost for the 
                            year would have been higher by Rs.57.60 
 cost using the intrinsic 
 value of the               lakhs had the company used the fair 
                            value of options as the method of 
                            accounting 
 stock Options (which is 
 the method                 instead of intrinsic value.  
 of accounting used by 
 the company) and the
 compensation cost that 
 would have been 
 recognized in the
 accounts if
 the fair value of
 Options had been 
 used as the method of 
 accounting.
 
 (ii) Impact of the 
 difference mentioned in    The stock-based compensation cost calculated
                            as per the intrinsic value method upto 
 (i) above on the
 profits of the company     31 March, 2011 is Nil. If the stock-based
                            compensation cost was calculated as per the
                            fair value method prescribed by SEBI, the 
                            total cost to be recognized in the 
                            financial statements for the period ended 
                            31 March, 2011 would be Rs.57,59,567/- 
 
 (iii) Impact of the 
 difference mentioned in    Had the company accounted the Options 
                            as per fair value the diluted EPS would have
 (i) above on the EPS 
 of the company             been Rs.5.62 instead of Rs.5.67
 
 m. (i) Weighted Average 
 exercise price             Rs.187.60 
 of Options
 
 (ii) Weighted average 
 fair value of              Rs.93.07 
 Options
 
 n. (i) Method used to 
 estimate the fair          The fair value has been calculated using 
                            the Black Scholes Options Pricing model.
 value of Options
 
 (ii) Significant 
 assumptions used 
 (weighted average 
 information
 relating)
 
                            30-Jul-07  24-Oct-07  25-Jan-08  25-Apr-08
 
 (a) Risk –free 
 interest rate               7.10%-      7.87%-      6.14% -  7.79%-
     
                             7.56%       7.98%       7.10%    8.00% 
 
 (b) Expected life of 
 the Option                  3-6         3-6         3-6      2.50
                                                              –5.50
                             years       years       years    years 
 
 (c) Expected volatility     40.64%-     41.24%-     44.58% -  45.78%-
                
                             43.16%      43.84%      47.63%    53.39% 
 
 (d) Expected dividend
 yields                      5.65%       5.65%       5.65%     3.97%
 
 (e) Price of the underlying 
 share in the market at 
 the time of Option
 grant                       193.40     149.90        262.20   191.80
 
 
 
 
                            30-Jul-08  24-Oct-08   27-Jan-11  27-Jan-11
                                                    Trache I  Trache II
 
 (a) Risk –free 
 interest rate                9.14%-     7.54%-
                              9.27%      7.68%         8%       8%
 
 (b) Expected life of 
 the Option                   2.50       2.50          4       3.40
                             –5.50      –5.50
                              years      years        years    years 
 
 (c) Expected volatility      46.52%-    48.20%-
                
                              53.14%     55.48%        59.50%   61.63% 
 
 (d) Expected dividend
 yields                       3.97%      3.97%         10%      10%
 
 (e) Price of the underlying 
 share in the market at 
 the time of Option
 grant                        105.00     37.70        187.60    187.60
 
 
 The certificate from the statutory auditor as required under the SEBI
 Guidelines, confirming that the companys Employees Stock Option Scheme
 2007 has been implemented in accordance with the SEBI Guidelines and
 shareholders resolution, will be placed before the shareholders at the
 ensuing annual general meeting.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 The directors responsibility statement as required under
 
 Section 217(2AA) of the Companies Act, 1956, reporting the compliance
 with the accounting standards, is attached and forms a part of the
 directors report.
 
 CORPORATE GOVERNANCE REPORT
 
 A report on corporate governance, including the status of
 implementation of mandatory and non-mandatory norms as per clause 49 of
 the listing agreement and the corporate
 
 governance voluntary guidelines, 2009 issued by Ministry of Corporate
 Affairs, is attached and forms part of the directors report.
 
 MANAGEMENT DISCUSSION AND ANALYSIS
 
 The management discussion and analysis report, highlighting the
 business-wise details is attached and forms part of this report.
 
 DIRECTORS
 
 Mr. V.P.Mahendra is liable to retire by rotation and expressed his
 desire not to seek re-appointment at the ensuing annual general
 meeting. Your board considered recommending the appointment of
 Mr.V.Srinivasa Rangan, Executive Director of HDFC Ltd. in the place of
 Mr.V.P.Mahendra at the ensuing annual general meeting to the
 shareholders.
 
 Mr. R.V.Kanoria retires by rotation at the ensuing annual general
 meeting and being eligible, offers himself for re-appointment.
 
 On 28 July, 2010 Mr.M.B.N.Rao and Mr.L.Ramkumar were appointed as
 additional directors. Further, the board, subject to the approval of
 the shareholders, appointed Mr.Vellayan Subbiah as managing director of
 the company on 28 July, 2010 for a period of five years with effect
 from 19 August, 2010.  All the additional directors hold office till
 the ensuing annual general meeting.
 
 The company has received notices from members under the provisions of
 Section 257 of the Companies Act, 1956 proposing the appointment of the
 additional directors as directors of the company and proposing the
 candidature of Mr.Srinivasa Rangan as a director.
 
 AUDITORS
 
 M/s. Deloite Haskins & Sells, chartered accountants, retire at the
 ensuing annual general meeting and are eligible for re-appointment.
 
 INFORMATION AS PER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956
 
 The company has no activity relating to consumption of energy or
 technology absorption. Foreign currency expenditure amounting to
 Rs.4.63 crores (including interest accrued but not due) was incurred
 during the year under review. The company does not have any foreign
 exchange earnings.
 
 PARTICULARS OF EMPLOYEES
 
 In accordance with the provisions of Section 217(2A) of the Companies
 Act, 1956, read with Companies (Particulars of Employees) Rules, 1975
 and the Companies (Particulars of Employees) Amendment Rules, 2011, the
 name and other
 
 particulars of employees are set out in the annexure to the directors
 report. However, having regard to provisions of Section 219 (1) (b)
 (iv) of the Companies Act, 1956, the annual report is being sent to all
 members of the company excluding the aforesaid information. Any member
 interested in obtaining such particulars may write to the company
 secretary at the registered office of the company.
 
 SUBSIDIARY COMPANIES
 
 Consequent to the termination of joint venture with DBS, the names of
 the subsidiary companies also were changed.
 
 Cholamandalam Securities Limited, Cholamandalam Distribution Services
 Limited and Cholamandalam Factoring Limited are subsidiaries of the
 company. The financial performance of the subsidiaries is given below.
 
 Cholamandalam Securites Limited (CSEC)
 
 CSEC recorded a gross income of Rs.10.14 crores for the year ended 31
 March, 2011. CSEC made a profit before tax of Rs.0.49 crores as against
 a profit of Rs.3.48 crores in the previous year.
 
 Cholamandalam Distributon Services Limited (CDSL)
 
 CDSL recorded a gross income of Rs.11.51 crores for the year ended 31
 March, 2011. CDSL made a profit before tax of Rs.6.90 crores as against
 a profit of Rs.6.89 crores in the previous year.
 
 Cholamandalam Factoring Limited (CFACT)
 
 During the year, the company infused equity share capital aggregating
 to Rs.20 crores to strengthen its capital base. CFACT recorded a gross
 income of Rs.0.02 crores for the year ended 31 March, 2011. CFACT made
 a loss before tax of Rs.8.16 crores as against a loss of Rs.8.62 crores
 in the previous year.
 
 Directors Responsibility Statement
 
 The directors accept the responsibility for the integrity and
 objectivity of the Profit & Loss Account for the year ended 31 March,
 2011 and the Balance Sheet as at that date (financial statements) and
 confirm that:
 
 - in the preparation of the financial statements the generally accepted
 accounting principles (GAAP) of India and applicable accounting
 standards issued by the Institute of Chartered Accountants of India
 have been followed.
 
 - appropriate accounting policies have been selected and applied
 consistently and judgments and estimates that are reasonable and
 prudent have been made so as to give a true and fair view of the state
 of affairs of the company as at the end of the financial year and of
 the profit of the company for that period.
 
 - proper and sufficient care has been taken 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.  To ensure
 this, the company has established internal control systems, consistent
 with its size and nature of operations, subject to the inherent
 limitations that should be recognized in weighing the assurance
 provided by any such system of internal controls.  These systems are
 reviewed and updated on an ongoing basis. Periodic internal audits are
 conducted to provide reasonable assurance of compliance with these
 systems. The audit committee meets at regular intervals to review the
 internal audit function.
 
 - the financial statements have been prepared on a going concern basis
 
 
 ACKNOWLEDGEMENT
 
 The directors wish to thank the companys customers, vehicle
 manufacturers, vehicle dealers, banks, mutual funds, rating agencies
 and shareholders for their continued support. The directors also thank
 the employees of the company for their contribution to the companys
 operations during the year under review.
 
                                               On behalf of the board
 
                                                        M.B.N.Rao
                                                        Chairman
 
 30 April, 2011 
 Chennai