2010-11 has been a very good year for Cummins India Limited.  The
 Company resumed its higher growth levels, exceeded its financial
 targets, progressed on its non-financial objectives and consequently,
 remained a Dependable partner to all its stakeholders. Along the way,
 it also crossed significant milestones, the most notable being the
 inauguration of the 300-acre Cummins Megasite at Phaltan earlier this
 year. The project reaffirms our commitment to profitable growth as well
 as our One Cummins approach.
 
 I am pleased to share that Cummins India Limited posted record sales as
 well as profits, making 2010-11 the best year in its history. Net sales
 for Cummins India Limited grew 39 percent to Rs. 3,945.4 crores. Net
 profit before tax at Rs. 802.4 crores increased 31 percent. The
 Companys cash position remained strong even as we continued to invest
 in our expansion programs.
 
 Maintain or Grow Market Leadership
 
 The Company has nearly doubled its revenues over the last four years.
 All four of our businesses: Industrial, Automotive, Power Generation
 and Distribution have contributed towards this success with equal
 passion. Clearly this type of growth has been at higher rates than the
 GDP growth which implies that we have been growing our market share
 leadership. With this strong foundation of market leadership, unmatched
 technology, scale and customer support footprint, along with time
 tested strategies and a stable, diverse leadership team, the Company is
 positioned well for another doubling by 2015.
 
 Critical to this high growth have been our new product programs and
 fit for market solutions that have helped us increase our share in
 the markets we compete in. Classic examples of fit for market
 solutions are the mechanically controlled 4B/6B engines that were
 developed to meet tighter construction segment emissions norms by our
 Industrial Engine Business this year. Likewise, our Automotive Business
 redesigned our B series engines to meet the more stringent BSIII
 emissions norms with mechanically controlled product leading to lower
 cost and ease of maintainability. The new BSIII emissions norms are now
 applicable throughout the country, barring 13 major cities, which are
 at BSIV. Our preparedness not only helped our customers transition
 smoothly to the new norms, but also testified our leadership in
 developing clean and green technologies.
 
 I am happy to relay that our Automotive Business also successfully
 concluded the requirement of 3,500 natural gas powered B series engines
 for low-floor eco-friendly buses. Ordered by OEMs that were fulfilling
 the Delhi Transport Corporation tender, these deliveries were staggered
 over a three-year time frame.
 
 Our Engine Business grew in the High Horsepower segments by positioning
 value packages in the rail (AC- AC DEMU), marine and pump segment. Last
 year we had seeded a prototype unit for the Self Propelled Accident
 Relief Train (SPART). Following its successful validation, we are now
 working on commencing production of these units for the Indian
 Railways. The business made further inroads in this segment with major
 projects like Diesel Electric Multiple Units (DEMU), Power Car, and 4
 and 8 Wheeler Over Head Equipment (OHE) cars.
 
 In order to provide greater value to our customers in the water well
 drilling segment our Engine Business introduced new rig packages
 powered by our 14 liter and 19 liter engines. For the construction and
 mining segments we launched the 15 liter and 19 liter electronic
 engines. These engines were on display at the 10th International Mining
 and Machinery Exhibition held in Kolkata (IMME). These state-of-the-art
 engines reinforce our commitment to the construction and mining
 industry, while highlighting our emission leadership and unrivalled
 fuel economy.
 
 Our Power Generation Business saw a surge in demand for low horsepower
 generator sets, which has led us to plan further expansion in our
 capacity. We intend to set up a power generation plant on the Cummins
 Megasite in the Special Economic Zone in Phaltan. With an initial
 capacity of 36,000 units per annum, and a matured capacity of over
 50,000 units, this facility would manufacture generator sets and
 generator drives in the low and medium horsepower range for exports.
 
 The business also launched the 78 liter QSK78 generators for the
 domestic market, positioning us to become the market leading player in
 this range.
 
 Our Distribution Business launched an end-to-end maintenance service
 for telecom towers, which is running successfully in 440 locations.
 This success offers potential for additional business and also an
 opportunity to increase the value of our offering.
 
 For long-term success of an organization, capable leadership at various
 levels is fundamental. We have taken a leader-led approach to imparting
 these skills in the Company. These Leadership Culture sessions were
 initiated by the Cummins Inc. Chairman and CEO, Tim Solso.
 Subsequently, the Cummins Inc. President and COO, Tom Linebarger
 facilitated Coaching & Developing sessions around the world. He was
 followed by our global Business Presidents, Pamela Carter on Talent
 Management, Rich Freeland on Fostering Open Communications, Tony
 Satthertwaite on Diversity Management and yours truly on Strategic
 Thinking/Setting the Aim. I have also been conducting interactive
 sessions on Leadership Excellence in the Indian context for managers
 across all levels in India.
 
 Furthering our leadership development efforts, we also launched the
 Global Leadership Development Program in India. The Program is targeted
 towards our senior leaders to help them become more effective in and
 outside India. Additionally, the soon to be announced Building Success
 in Others program, will provide support to first time managers,
 equipping them with skills to provide good leadership to junior level
 employees. We are optimistic that these sessions will help develop
 excellent leaders capable of leading the Company towards long-term,
 sustainable prosperity.
 
 Right talent is an essential element to driving high growth that is
 profitable. The Company is likely to increase its employee strength by
 over 700 this year.  Compared to historical levels this is a very
 significant increase in hiring volume, and I am happy to relay that
 numerous initiatives and investments are currently underway to enable
 us do this well.
 
 We believe diversity leads to innovation and excellence.  Clearly, in
 order to succeed in todays competitive environment, it is essential to
 have individuals representing diverse backgrounds at all levels of the
 organization. Being passionately driven by the senior leadership and
 embraced by all others in the organization, the year saw us improve
 representation of women to 19%, with almost 25% women employed in key
 leadership roles. We are committed to and are working determinedly
 towards achieving our target of 30% women representation by 2012. We
 also continued to make progress in expanding the representation of
 employees from different regions of India.
 
 Given the positive market conditions, coupled with investments that we
 are making in our people, products, technologies and infrastructure, we
 believe the Company is poised to achieve another doubling of revenue in
 the coming four years.
 
 Exceed 40% Return on Average Net Assets (ROANA) and 16% Profit Before
 Interest and Tax (PBIT)
 
 One of the most visible initiatives to supporting the above objectives
 is the investment in the Cummins Megasite at Phaltan. Besides
 augmenting capacities, the considerably leaner and efficient facilities
 built on this site are geared to help us significantly from a cost
 perspective. Moreover, by virtue of their location all the expansion
 projects stand to benefit immensely from the incentives offered by the
 State Government.
 
 The Cummins Megasite was inaugurated on January 14, 2011, by
 dignitaries; Shri. Sharad Pawar (Union Minister of Agriculture), Shri.
 Prithviraj Chavan (Chief Minister of Maharashtra), Smt. Supriya Sule
 (Member of Parliament) and other senior ministers of State, in the
 presence of the Cummins Inc. Chairman and CEO, Tim Solso. With this
 inauguration we launched the first three expansion projects at the
 Cummins Megasite, marking the beginning of a Campus that will see
 nearly 10 facilities operating from one location in the coming few
 years. All of these projects will have a positive impact on your
 Company.
 
 High Horsepower Rebuild Center: This Center rebuilds mechanical and
 electronic engines from 19 liters up to 60 liters, and repairs all
 Cummins engines helping our Distribution Business meet the requirements
 of our rapidly increasing customer base.
 
 Tata Cummins Limited: This project is an expansion of the joint venture
 Tata Cummins Limited for manufacturing the B series and ISB electronic
 engines.  Built to cater to the surging commercial vehicle, power
 generation and industrial markets, this expansion will help the Company
 serve its customers, more effectively.
 
 ReCon: This plant is a state-of-the-art remanufacturing facility for
 parts and engines up to 19 liters in size. This allows the Cummins
 India Limited Distribution Business to serve its customers with cost
 effective parts and engines that offer similar warranty as a new part
 or engine.
 
 Other than these three initial projects, the next unit to commence
 operations this year will be a common Parts Distribution Center (PDC)
 that will serve all Cummins businesses in India. This unit aims to
 improve supply chain efficiency in aftermarket parts distribution and
 warehouse operations. In addition to supporting our Distribution
 Business, the Center will offer optimal warehouse space to all the
 businesses in India, bringing significant improvement to our inventory
 management.  The Center will have the Cummins Inc. global processes as
 well as IT. infrastructure that will enable excellent delivery
 performance to our customers.
 
 Next in line is an engine upfit plant to cater to the growing
 requirements of the construction, compressor, and marine segments.
 Apart from upfitting mechanical and electronic B and L engines for
 various applications, the facility will also manufacture C series
 engines. Upon completion the plant will produce 20,000 engines
 annually.
 
 I am happy to share with you our plans to expand the laboratories and
 engineering facilities at our Kothrud site into a global, full-fledged
 India Technical Center. The India Technical Center would support the
 growth plans of our Industrial, Power Generation, Automotive and
 Components businesses in India and globally; designing solutions that
 are cleaner, healthier and safer, and most of all cost effective,
 giving the Company a competitive advantage in the domestic markets.
 
 I am very optimistic about all these projects and their collective
 contribution to ensuring our Companys sustained growth in a profitable
 manner.
 
 As we go about growing our businesses, it is equally important to lean
 ourselves out. Aligned to our low cost producer strategy, initiatives
 such as ACE-II (Accelerated Cost Efficiency) which began in 2008 and
 TRIMS (Total Cost Reduction in Indirect Materials and Services) which
 we launched in 2009, continued to help us maintain our low cost
 leadership position in the domestic markets, and remain the preferred
 source for exports to our parent.
 
 I am delighted to share that we concluded ACE-II having achieved 96% of
 the targeted cost reduction, generating accrued savings of Rs. 53.8
 crores during 2010-11.  ACE-II aimed at reducing total cost of
 ownership of direct materials by 20% over a three-year period.
 
 Likewise, TRIMS was initiated to reduce the Total Cost of Ownership in
 indirect materials by 10% per year over three years. The initiative
 along with other purchasing projects have generated bottom line savings
 of Rs. 12.4 crores and avoidance savings to the tune of Rs. 39.7 crores
 for the Company. Additionally, the program has helped consolidate the
 supply base and leverage our spend. Projects in the areas of cutting
 tools, safety equipment, packaging, civil maintenance and housekeeping
 are currently underway.
 
 Another initiative that continues to play a critical role in driving
 cost reduction is Six Sigma. Now in its eleventh year, Six Sigma has
 become so much a part of our DNA that we have progressed to completing
 nearly 355 projects during the year 2010-11, resulting in savings of
 approximately Rs. 61.89 crores for the Company. Of the number of
 projects closed, 90 are Customer Focused Six Sigma (CFSS) projects
 where our customers were an integral part of the team. We have been
 laying great emphasis on CFSS as they help our customers succeed and
 deepen our relationship with them.
 
 We also continued our efforts of engaging and working with our
 suppliers. Together, we closed 50 Supplier Focused Six Sigma (SFSS)
 projects.
 
 The Sigma Lite program, renamed as Introduction to Six Sigma, saw 12
 launches during the year, imparting training to more than 300 junior
 managers across various businesses. We strongly believe that Six Sigma
 is a great way of improving leadership skills, processes and
 efficiencies and to this effect, have been investing heavily in
 developing every employee to become a Green Belt and our best
 performers to become dedicated Black Belts and Master Black Belts.
 
 I am pleased to share that this year seven projects from India won the
 Cummins Inc. Chairmans Quality Award presented by Tim Solso. Six Sigma
 is an intrinsic part of our journey towards leadership excellence and
 achieving Zero Defects.
 
 Achieve and sustain the respect of all stakeholders
 
 This is as important as achieving our earlier objectives.
 
 I am delighted that shareholders benefited from the Companys
 performance. We had disbursed an enhanced interim dividend of 350
 percent (Rs. 7 per fully paid-up equity share of Rs. 2 each) in March
 as compared to the 300 percent interim paid the previous year. We
 concluded the 2010-11 financial year with recommendation of a final
 dividend of 400 percent (Rs. 8 per share of Rs. 2 each) aggregating to
 a record 750 percent (Rs. 15 per share of Rs. 2 each). The total return
 to shareholders during the fiscal year including dividends and share
 price appreciation was 38.9 percent. Over the last five fiscal years,
 the total return has been 25.7 percent on a compounded annual growth
 basis.
 
 We continued to delight our customers with new technologies. As an
 example, our Automotive Business introduced and successfully
 demonstrated the CNG hybrid technology in conjunction with Tata Motors
 for the buses that were supplied to Delhi Transport Corporation (DTC)
 for the Commonwealth Games. The CNG hybrid technology offers
 substantial improvement in fuel economy while reducing emissions.
 
 A true measure of us achieving and sustaining the respect of our
 customers is the Net Promoter Score (NPS), a system that we had
 launched last year to measure customer loyalty. Based on the customer
 feedback received through the system, our Distribution Business has
 started a project called Re-engineering of the Service Delivery
 Process1. The process has been designed to track every service event
 from the beginning to the end, enhance communication with our customers
 and draw the attention of senior leaders within the organization
 towards speedy resolution of the concerns voiced. The Company has in
 fact gone a step further in creating opportunities for customers to
 interact directly with the senior leadership facilitating first hand
 feedback on our products and services, thus demonstrating our
 dedication to the first of the ten practices under Cummins Operating
 System (COS), which is to put the customer first and provide real
 value1.
 
 That we are indeed the preferred partner to do business with was
 endorsed with the Voice of the Customer award in five of ten
 categories conferred by the international consultancy Frost & Sullivan
 on our Power Generation Business. The business has received this
 recognition for the second time since 2007, reinforcing the Companys
 position as the preferred power generation brand in India. These awards
 are based on the end-user satisfaction assessment that the consultancy
 conducted among generator set customers in India and go a long way in
 demonstrating our commitment to Dependability.
 
 Additionally, our Engine Business was recognized by a much valued and
 long-time business partner, Atlas Copco with the award for Best
 Quality Performance.
 
 Honours were conferred upon the Company by the leading industry body,
 Confederation of Indian Industry (CM). Cll presented the Company with
 the 11th National Award for Excellence in Energy Management 2010 for
 the rural electrification project which the Company had initiated in
 collaboration with the Cummins Engine Research Facility (CERF) at I IT
 Bombay. This award under the category of Innovative Energy Saving
 Product/ Service recognizes our indigenously developed technology which
 allows electricity generation, utilizing locally available renewable
 energy sources like Straight Vegetable Oil from non-edible oil seeds
 grown locally, whilst minimizing overall carbon emissions. A pilot of
 this project was validated in village Kolha in Orissa last year, just
 one of the Companys many initiatives towards deploying technology and
 expertise towards the development of the communities. The technology
 was replicated at village Padarwadi in Maharashtra, this year.  The
 initiative captured on film won the first place amongst entries from 36
 other global companies at the Boston College Center for Corporate
 Citizenship Film Festival.
 
 To our employees, we do not merely offer employment opportunities but
 long-term growth prospects that allow them to develop and succeed in
 the organization. Our Hire-To-Develop strategy is aimed at employing
 the right talent that believes in the Cummins Core Values at the entry
 level, which is then developed to take up greater responsibilities in
 the organization. We believe that by doing this in a structured way, we
 will be giving employees great work assignments and experiences, which
 will not only enhance their skills but also cement long term
 relationships with your Company. This year, 466 deserving employees
 were provided an opportunity to take up new roles and responsibilities
 within the organization. Over 100 engineers went through our Young
 Managers Development Program (YMDP). Of the 31 MBA students from
 premier B-Schools who had interned with us, 23 were retained through
 suitable placement across varied functions in the Company. A sizeable
 percentage of our new recruits are women, aligned with our efforts to
 increase gender representation in the organization.
 
 As part of our gender diversity efforts, the Affirmative Development
 Project was successfully implemented in India. Mid-level managers and
 members of our Womens Affinity Group were given an insight into the
 business case for diversity in a day-long workshop that was conducted
 by the Global Diversity Leader and a consultant partner. We are
 committed to providing an inclusive and energizing environment for
 talented people of all backgrounds at Cummins.
 
 A key enabler to facilitating our employees growth path in the
 organization is the Performance Management System. This process and
 system witnessed 99% employee utilization this year.
 
 To recognize exemplary performance during the year the Company hosted
 the sixth annual CMD Awards. Thirty teams from across the Cummins Group
 in India were rewarded for their commitment to the six Core Values, and
 critical initiatives such as Six Sigma, Customer Support Excellence,
 Health, Safety & Environment (HSE), and overall performance.
 
 For many of us, the desire to learn and garner knowledge is an unending
 journey. For deserving employees who wish to study further, we have
 introduced an Education Assistance Policy that facilitates
 participation in education programs. Our high performing employees
 continue to benefit from our partnership with leading institutions,
 such as the Indiana University Kelly School of Business and SP Jain
 Institute of Management & Research. To this list we have added the
 Indian Institute of Management, Ahmedabad which has worked with us on a
 Cumminized management program this year. 50 employees from across the
 organization have been sponsored for MBA programs at these esteemed
 institutes.
 
 Team Based Work System (TBWS), our global approach at engaging shop
 floor employees to driving improvement is being implemented in all our
 facilities at the Cummins Megasite and amongst the existing facilities,
 such as our Power Generation plant at Pirangut. This initiative
 develops self-motivated teams that are capable of operating the plant
 with minimum supervision; thereby improving our product quality and
 process efficiency, and in turn reducing our cost of operations.
 
 We continue to invest heavily in creating the right environment in the
 organization. At Cummins the Cummins Code of Business Conduct and
 Treatment of Others Policy is core to creating the right environment.
 All employees have been taken through sessions that educate them about
 the importance of acting with integrity and respect. I am very happy to
 relay that our most recent Employee Satisfaction Survey shows
 significant improvement in all five indices of satisfaction, namely;
 Communication, Performance, Vision, Diversity and Leadership.
 
 A critical aspect to providing a great place to work is ensuring that
 the work environment is clean, healthy and safe for all our employees.
 To support sound HSE practices in the organization, the Company has
 initiated procedures, audits and systems such as Driving Safety,
 
 Supplier/Contractor Safety, Safety System Monitoring and Measurement,
 and Internal Health Safety and Environmental Management.
 
 Our efforts were recognized when the facility at Kothrud was conferred
 with the National Energy Award 2010 by the Confederation of Indian
 Industry, Western Region.  Moreover, all of our engine manufacturing
 plants in Pune have received the ISO 14001 and OHSAS 18001
 certifications.
 
 Efforts made by the Kothrud facility in conserving water have shown
 remarkable results with river water consumption reducing by 43 percent
 as compared to last year and domestic water consumption reducing by 10
 percent per capita on a daily basis.
 
 Cummins efforts in the area of energy conservation have been no less
 significant. Having achieved 31 percent reduction in Green House Gases
 (GHG) from the 2005 baseline, the Group has succeeded in reducing GHG
 from 102.22 T Co2/$Mn in 2005 to 59TCo2/$Mnin2010.
 
 True to our Mission of demanding that everything we do leads to a
 cleaner, healthier and safer environment, all facilities at the
 Megasite are being built in accordance with standards outlined by the
 Indian Green Building Council. Furthermore, the IT building at the
 Megasite has been built to qualify for the LEED Certification.
 
 Pursuant to the labour situation at the Kothrud plant last year,
 relations between the organization and the union leadership are cordial
 and stronger. The numerous employee engagement initiatives, including
 developmental and behavioural training sessions and corporate
 responsibility projects have helped in positively engaging our
 associates while aligning them to the organizational objectives. We
 believe our efforts will go a long way in reinforcing ties and
 providing a great place to work to our associates.
 
 Aside from working to meet financial objectives, our employees have
 been doing significant work in serving and improving our communities.
 The Every Employee Every Community (EEEC) program witnessed 93%
 employee participation, wherein more than 26,000 hours were devoted to
 community service this year.  Such was the impact of the work that our
 employees undertook that six projects from India were adjudged winners
 of the Environmental Challenge that is announced each year by Cummins
 Inc. We aim at achieving 100% participation from employees across our
 various businesses going forward.
 
 The Cummins India Foundation continued to work relentlessly in the
 three identified focus areas, namely; Higher Education, Energy &
 Environment and Local Infrastructure Development. Under Higher
 Education, the Cummins Scholarship Program, in its fourth year,
 sponsored 40 socially and economically disadvantaged students to pursue
 higher education in Engineering and Management. Additionally, the
 Cummins India Foundation also donated Rs. 1 lakh to the Lila Poonawalla
 Foundation towards educating deserving but financially disadvantaged
 female students at a Masters level.
 
 The Cummins College of Engineering for Women has been established as a
 Signature Project by Cummins Inc. With this, we will be working towards
 establishing the college amongst the top 10 technical educational
 institutions in India over the next five years.
 
 Expanding its horizons the Company is working closely in and around
 Phaltan to bring positive changes in the lives of the communities. The
 Company has furthered direct employment opportunities for the
 employable youth at Phaltan. At the Cummins Megasite, of the 221
 employed from Satara District, 75% are residents of Phaltan Taluka
 alone. Apart from generating employment, the expansions are playing an
 important role in creating opportunities for many ancillary industries
 in and around the region.
 
 Committed to improving the neighborhoods of Phaltan, Cummins has
 adopted three villages namely, Nandal, Surwadi and Dawalewadi that are
 in close proximity to the town. The Group is working towards
 undertaking initiatives that will address the very immediate and
 critical needs like water, sanitation and hygiene, education, per
 capita income and avenues for income generation. At Nandal, the Cummins
 Group has already initiated two such projects, one each in the area of
 Energy & Environment and Infrastructure Development.  Similar
 initiatives are slated to be replicated at Surwadi and Dawalewadi in
 the near future.
 
 In the area of Higher Education, the Company is working closely to
 upgrade the Industrial Training
 
 Institute (ITI) at Phaltan. With dedicated efforts towards improving
 infrastructure, faculty and syllabus, Cummins is committed to improving
 the quality of technical education offered by the Institute and its
 Center of Excellence; thereby providing a sustainable solution to
 making the younger section, employable. This year 12 students from the
 Satara District were granted the Cummins Scholarship to pursue higher
 education.  This number will increase further in the coming years.
 
 In Closing
 
 In hindsight, the year has indeed been very fulfilling. We have been
 guided by our Vision, Mission and Core Values in doing what is right
 for all our stakeholders.
 
 I would like to sincerely thank our customers, suppliers and you, our
 shareholders for your sustained confidence and support to us. I remain
 grateful to our Board of Directors for their valuable direction towards
 helping us grow profitably while sustaining the respect of all
 stakeholders. I would like to acknowledge our Leadership Team and all
 employees for their teamwork and diligent execution of our strategies
 that have ensured sustained superior results.
 
 I recommit myself and my entire team at Cummins India Limited to our
 Core Values, Mission and ultimately our Vision of Making peoples
 lives better by unleashing the Power of Cummins.
 
 Sincerely,
 
 Anant. J. Talaulicar
 
 Chairman and Managing Director