The Directors are pleased to present the Ninety-First Annual Report
 for nine month period ended March 31, 2011.
 
 FINANCIAL HIGHLIGHTS
 
                                              (Rs. in crores)
 
                                     Nine month    Year ended
                                   period ended      June 30,
                                      March 31,          2010
                                           2011
 
 Net Sales, excl. Excise Duty           1250.47       1347.21
   
 Other Income                             14.08          6.85
 
 Profit before Interest,                 211.88        213.34
 Depreciation, and Tax
 
 Less: Interest and                        7.22         12.91
 Commitment charges
 
 Less: Depreciation/                      20.98         27.03
 Obsolescence/Amortization
 
 Profit Before Tax                       183.68        173.40
 
 Less: Provision for Tax                  54.54         56.20
 
 Less/(Add): Deferred Tax                  1.86        (0.77)
 
 Profit After Tax                        127.28        117.97
 
 Profit brought forward                  134.25        126.55
 
 Profit available for                    261.53        244.52
 appropriation
 
 Appropriations
 
 Interim Dividends                        19.54         21.98
 
 Final Dividend                           17.09         14.65
 
 Special Dividend                             -         36.63
 
 Dividend Distribution Tax                 5.81         12.01
 
 Transfer to General Reserve              25.00         25.00
 
 Balance carried to Balance              194.09        134.25
 
 Sheet                                   261.53        244.52
 
 
 DIVIDEND
 
 Your Directors have recommended a Final Dividend of Rs. 0.70/- per
 share of Rs. 2/- each for nine month period ended March 31, 2011.
 Considering the two interim dividends already declared and paid, the
 total dividend for the year works out to 75% i.e. equivalent to Rs.
 1.50 on the share of Rs. 2/- each. The total cash outgo on account of
 dividends amounts to Rs. 42.44 crores (inclusive of Dividend
 Distribution Tax), which translates into 33.3% of Companys earnings.
 The
 
 Final Dividend will be paid to those Members whose names appear in the
 Register of Members on July 27, 2011.
 
 
 DIRECTORS
 
 Mr. Vijay Rai and Mr. Vikram Tandon retire by rotation and are eligible
 for re-appointment.
 
 The profiles of Mr. Rai and Mr. Tandon seeking re- appointments form
 part of the Notice convening the Annual General Meeting. The Board
 recommends re-appointment of these Directors.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions under Section 217(2AA) of the Companies Act,
 1956, your Directors confirm that:
 
 1.  In the preparation of the Accounts, the applicable accounting
 standards have been followed.
 
 2.  The Directors have selected such accounting policies and applied
 them consistently and made judgements and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at March 31, 2011 and profits for nine month period
 ended March 31, 2011.
 
 3.  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.
 
 4.  The Annual Accounts have been prepared on a going concern basis.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 The Consolidated Financial Statements, prepared by the Company in
 accordance with the applicable Accounting Standards (AS-21, AS-23 and
 AS-27) issued by the Institute of Chartered Accountants of India,
 together with the Auditors Report, form part of this Annual Report.
 
 CODE OF CONDUCT
 
 Pursuant to Clause 49 of the Listing Agreement, a Declaration signed by
 the Managing Director & CEO regarding compliance of Code of Conduct for
 nine month period ended March 31, 2011, is annexed and forms part of
 this Report.
 
 CORPORATE GOVERNANCE
 
 The Company has fully complied with the Corporate Governance Code, as
 prescribed under Clause 49 of the Listing Agreement. A Report on
 Corporate Governance, along with a Certificate from Auditors,
 confirming the compliance, is annexed and forms part of this Report.
 
 AUDITORS
 
 The Companys Auditors viz. Messrs. Walker, Chandiok & Co., Chartered
 Accountants, Mumbai and Branch Auditors viz. Messrs. Wrigley
 Partington, U.K., in respect of Companys Branch in Cheshire, London
 (UK), will retire at the ensuing Annual General Meeting and are
 eligible for re-appointment. Both these Auditors have sought their
 re-appointments.
 
 The Directors recommend re-appointment of the Auditors.
 
 COST AUDITORS
 
 Pursuant to the provisions of Section 233-B of the Companies Act, 1956,
 audit of cost accounts in respect of Diesel Engines, IC Engines and
 Power Driven Pumps, is being regularly carried out by the Cost
 Auditors. The Directors have re-appointed Dhananjay V. Joshi &
 Associates, Cost Accountants, as Cost Auditors of the Company for the
 financial year 2011-12.  The approval of the Central Government is
 awaited.
 
 PUBLIC DEPOSITS
 
 As on March 31, 2011, the unclaimed Deposits amount to Rs. 0.08 crore.
 Pursuant to the provisions of Section 205C of
 
 the Companies Act, 1956, all unpaid Public Deposits and interest due
 thereon, have been transferred to the Investor Education and Protection
 Fund, on the respective due dates.
 
 HUMAN RESOURCES
 
 During the period under review, the Companys industrial relations by
 and large remained cordial. During this period, the Company signed a
 long term wage settlement Agreement with the workers union at Diesel
 Engines Unit, Chinchwad, Pune.
 
 Your Company has infused a lot of rigor and intensity in its people
 development process and in honing skill-sets. HR processes are being
 aligned to facilitate achieving long term organizational goals. Ongoing
 learning and refreshing HR systems across the Company are few of the
 priority agenda for the Companys human resource function.
 
 Particulars pursuant to the provisions of Section 217 of the Companies
 Act, 1956
 
 Information on Conservation of Energy, Technology Absorption and
 Foreign Exchange Earnings and Outgo, stipulated under Section 217(1)(e)
 of the Companies Act, 1956 is set out in the Annexure to this Report.
 
 Pursuant to the provisions of Section 217(2A) read with the Companies
 (Particulars of Employees) Rules, 1975, the names and other particulars
 of employees are to be set out in the Directors report, as an addendum
 thereto. However, in tandem with the provisions of section
 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts as
 set out therein, are being sent to all the Members of the Company
 excluding the aforesaid information about the employees. Any Member,
 who is interested in obtaining these particulars, may write to the
 Company Secretary at the Registered Office of the Company.
 
 ACKNOWLEDGEMENT
 
 Your Directors recognize and appreciate the contributions made by the
 employees at all levels for their enthusiasm which have enabled the
 Company to achieve better financial results. The Board also
 acknowledges the unstinted support provided by the stakeholders of the
 Company.
 
 
 
 
                           For and on behalf of the Board of Directors
 
 
                                                          Karan Thapar
                                                              Chairman
 
 
 Place : Mumbai 
 Date  : April 29, 2011