The Directors have great pleasure in presenting the 26th Annual Report
 together with the Audited Statement of Accounts for the financial year
 ended March 31, 2011.
 
 FINANCIAL RESULTS AND APPROPRIATIONS
 
 The salient features of the Companys Financial Results for the year
 under review are as follows:
 
                                                           (Rs. In Lacs)
                                           Year Ended         Year Ended
                                             31.03.11           31.03.10
 
 Sales and other Income                     138924.02          108092.61
 
 Profit before Depreciation & Tax             7420.04            6178.52
 
 Depreciation                                 2424.67            2307.64
 
 Profit before Tax                            4795.37            3870.87
 
 Provision for Taxation                       1393.46            1409.87
 
 Profit after Tax                             3401.91            2461.00
 
 Net Profit brought forward                   2347.12            1821.96
 
 Profit available for appropriation           5749.03            4282.96
 
 Dividend (Recommended)                        999.88             799.90
 
 Dividend Tax (Net)                            159.12             135.94
 
 Transfer to General Reserve                  1000.00            1000.00
 
 Surplus carried to Balance Sheet             3590.03            2347.12
 
 OPERATIONS
 
 The Company has achieved a record sales turnover of Rs. 138,924.02 lacs
 registering a growth of 28.52 percent vis-à-vis Rs. 108,092.61lacs in
 the previous year. The profit before tax in the current year was at Rs.
 4,795.37 lacs as compared to Rs. 3,870.87 lacs in the previous year
 registering a growth of 23.88 percent.
 
 FUTURE PROSPECTS
 
 Indias GDP is likely to grow at an estimated sustained annual average
 rate of 8.40 percent over 2011-12 to 2015-16 and domestic demand -
 spurred by a large, growing young population, rising middle-class
 household consumption, and growing savings and investment rates - will
 support economic growth over the next five years. A likely increase in
 discretionary spending by Indias middle-class households will boost
 demand for durables such as automobiles and white goods, and services
 like hotels, restaurants and tourism.
 
 Auto Component Industry is gathering speed as it has direct bearing to
 automobile sector. Robust automobile sales should translate into strong
 order inflows for auto component manufacturers. In the year 2010-11
 Auto component Industry has registered encouraging results and growth,
 which augur well for the year ahead. The company recorded an impressive
 growth of 28.52 percent in value and 20.08 percent in volume.
 
 Our existing customers have targeted to meet predetermined sales
 targets with around 15 percent growth, with the support of new models
 likely to be launched both in 2 Wheeler and 4 Wheeler segment in the
 coming year i.e.2011-12. In brief, all customers of the Company are on
 growth path and Company is confident to meet their increased demand.
 
 TRANSFER TO GENERAL RESERVE
 
 The Board proposes to transfer an amount of Rs. 1,000.00 lacs to
 General Reserve, having regard to the requirements of section 205 (2A)
 of the Companies Act, 1956. The balance amount of Rs. 3,590.03 lacs
 (previous year Rs. 2,347.12 lacs) will be retained in the Profit and
 Loss Account.
 
 DIVIDEND
 
 Your directors are pleased to recommend a higher dividend of 125 per
 cent (i.e. Rs. 2.50 Per equity share of Rs. 2/- each) for the year
 ended March 31, 2011 amounting to Rs. 999.88 lacs in aggregate as
 compared to 100 percent i.e. Rs. 2 per share in the corresponding
 year. Dividend will be tax free in the hands of shareholders, as the
 Company will bear the dividend distribution tax of Rs. 162.20 lacs. The
 dividend, if approved, at the Annual General Meeting shall be payable
 to the shareholders registered in the books of the Company and the
 beneficial owners whose names are furnished by the depositories,
 determined with reference to the book closure from July 23, 2011 to
 August 11, 2011 (both days inclusive).
 
 DIRECTORS
 
 Mr. Brijmohan Lall Munjal, Mr. Nand Lal Dhameja and Mr. Devi Singh, the
 directors of the Company are liable to retire by rotation from the
 Board at the ensuing Annual General Meeting. Mr. Brijmohan Lall Munjal,
 Mr. Nand Lal Dhameja and Mr. Devi Singh being eligible have offered
 themselves for re-appointment.
 
 The present tenure of Mr. Yogesh Chander Munjal as Managing Director of
 the Company expires on August 31, 2011 being eligible has offered
 himself for re-appointment.
 
 Brief resumes of Mr. Brijmohan Lall Munjal, Mr. Nand Lal Dhameja, Mr.
 Devi Singh and Mr. Yogesh Chander Munjal have been appended to the
 Notice of the Annual General Meeting.
 
 Your directors recommend their appointment at the ensuing Annual
 General Meeting.
 
 CORPORATE GOVERNANCE
 
 Report on Corporate Governance and Management Discussion & Analysis
 Report along with Certificate of the Auditors of your Company pursuant
 to clause 49 of the Listing Agreement with the Stock Exchanges, have
 been included in this Report as Annexure-A. Your Company has been
 practicing the principles of good Corporate Governance over the years.
 
 In terms of sub-clause (v) of Clause 49 of the Listing Agreement,
 Certificate of CEO/CFO, inter alia, confirming the correctness of the
 financial statements, adequacy of internal control measures and
 reporting of matters to the Audit Committee in terms of the said
 Clause, is also enclosed as a part of the Report.
 
 The Board of Directors has laid down a Code of Conduct to be followed
 by all the Directors and members of Senior Management of your Company.
 The Board of Directors supports the broad principles of Corporate
 Governance. In addition to the basic governance issues, the Board also
 lays strong emphasis on transparency, accountability and integrity.
 
 AUDITORS
 
 M/s S.R. Batliboi & Co., Chartered Accountants, Gurgaon, the Auditors
 of the Company retire at the conclusion of the forthcoming Annual
 General Meeting, and being eligible, offer themselves for re-
 appointment. The Company has also received certificate from the
 auditors to the effect that their re- appointment, if made, would be in
 accordance with Section 224(1B) of the Companies Act, 1956.
 
 The Board recommends their re-appointment.
 
 AUDITORS REPORT
 
 The observations of the Auditors in their report read with the notes to
 accounts are self-explanatory and do not require any specific comments.
 However as pointed out by the Auditors in annexure to their report at
 point number (ix) (a), the slight delay in payment of undisputed
 statutory dues in few cases was on account of finalization of accounts
 beyond the payment due date.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 In compliance with Section 217(2AA) of the Companies Act, 1956, the
 Directors confirm:
 
 a) that the applicable accounting standards have been followed in the
 preparation of annual accounts and that there are no material
 departures;
 
 b) that such accounting policies have been selected and applied
 consistently and the judgments and estimates made are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company as at 31st March 2011 and of the profit of the Company for
 the year ended on that date;
 
 c) that 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; and
 
 d) that the annual accounts have been prepared on a going concern
 basis;
 
 AUDIT COMMITTEE RECOMENDATION
 
 During the year there was no such recommendation of the Audit Committee
 which was not accepted by the Board. Hence, there is no need for the
 disclosure of the same in this Report.
 
 FIXED DEPOSIT
 
 The Company has not accepted any Fixed Deposits during the year under
 Section 58A or 58AA of the Companies Act, 1956 and the rules made
 there-under, and as such no amount on account of principal or interest
 on public deposits was outstanding on the date of the Balance Sheet.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH &
 DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 The information pursuant to Section 217(1) (e) of the Companies Act,
 1956 read with the Companies (Disclosure of particulars in the report
 of the Board of Directors) Rules, 1988 regarding Conservation of
 Energy, Technology Absorption and R & D and Foreign Exchange earnings &
 outgo are given in Annexure-B which forms part of Directors Report.
 
 ENVIRONMENT COMPLIANCE
 
 India is the seventh largest country in the world by geographical area.
 While progress on the environmental front is being made, India still
 faces some major challenges. Despite highly evolved environmental laws
 and regulations in some areas, many environmental practices such as
 regulation of air pollutants using a model seen in western countries
 are still at a very rudimentary stage in India. Increased environmental
 regulations will likely become a key area of concern in the near
 future.
 
 The increasing desire of Indian companies to meet world class standards
 has caused established companies in India to take on sustainable
 initiatives as a means of improving their global brand and reputation
 and the environmental sector is expected to be at the forefront of
 Indias evolving story in the coming years.
 
 The Company has already considered the prerequisites of environment
 compliance long way back and is doing new initiative every year. Some
 of the major initiatives of regular basis are;
 
 Slogan of the Company One planet, one earth, one nature which
 propagates Save the earth for better tomorrow”.
 
 By Regular training for workers and staff to prevent accident related
 to mechanical, electrical, chemical, physiological and psychological
 safety the Company has made Zero incidents” as acceptable standard.
 
 The Company is a regular member of Haryana Environment Management
 Society.
 
 The Company has started Green Vendor Development Programme (GVDP) in
 2009-10. The aim of the project is to conserve water and Energy,
 Minimize generation of waste, terminate hazardous chemicals with
 non-hazardous chemicals, minimize carbon foot print, generate pollution
 prevention awareness throughout the plant and to achieve 100 percent
 legal compliance.
 
 In 2010-11 the Company has added special units to recover and recycle
 chrome and thinner from the waste. Special Kaizen teams with specific
 project made to conserve resources like energy, water and electricity.
 More emphasis was given to utilize natural light and natural
 ventilators.
 
 ISO/TS 16949 ACCREDITATION
 
 Your Companys manufacturing facilities plants located at Gurgaon and
 Manesar continue to maintain and uphold the prestigious ISO/TS
 16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health &
 Safety Assessment Series) certifications from reputed leading Indian
 and International Certification Institutions. Companys third plant
 located at Haridwar has also got TS 16945. These certifications help in
 continuous improvements, besides emphasis being laid on prevention of
 defects, reduction of wastes and variation in supply chain management.
 
 TPM
 
 The Company has taken up the journey of Total Productive Maintenance
 (TPM) with the help of JIPM (Japan Institute of Plant Maintenance)
 Japan and CII, India. Major objectives of TPM are to increase
 Productivity, to improve Quality, to reduce Costs, to ensure Delivery
 in time, to increase Safety, to increase profitability, to build Moral
 and to protect environment by formation of cross functional work groups
 (PQCDSME) and to improve overall effectiveness of equipment and
 processes within their areas. The other objectives are to procure and
 install maintenance free plant and machinery; and to achieve zero
 defects, zero break down, zero losses and zero accidents. In nut shell
 to convert all the losses into Profit.
 
 We have already got the category A award for TPM Excellency for Gurgaon
 Plant and will challenge the next level by the end of 2011. We have
 challenged JIPM TPM Excellence Award in December 2009 for Manesar Plant
 and were honored with TPM Excellence Award category A at Kyoto, Japan
 on March 9, 2011. We are now going to challenge the next level of TPM
 Excellence Award. For the same the TPM Kick - Off Ceremony for 2nd
 stage was held on April 22, 2011. The Company has declared start of TPM
 in Haridwar Plant on 23rd March 2011.We will challenge the TPM
 Excellence Award in December 2013. For further excellence in the
 industry the company is helping some of its vendors to start TPM
 journey.
 
 Lean Activities:
 
 We are in the process of clubbing TPM with lean manufacturing system in
 the near future. Our Company has conducted Lean Manufacturing System
 (Value Stream Mapping) Work Shop in the month of July 2008.  We have
 converted lots of huge & complicated machines to Lean Machines &
 manufactured Lean machines in house. We receive many visitors not only
 from India but also from all over the World to see our TPM & Lean
 machine manufacturing activity. Munjal Showa is taking a lead role in
 spreading this concept of Lean Machines across the Country thru CII,
 ACMA, IMTMA, MSIL, HHML, Honda Seil Club, etc.
 
 LISTING
 
 The shares of your Company are listed at National Stock Exchange of
 India Limited and Bombay Stock Exchange Limited, and pursuant to Clause
 38 of the Listing Agreement, the Annual Listing fees for the year
 2011-2012 have been paid to them well before the due date i.e. April
 30, 2011. The Company has also paid the annual custodian fees for the
 year 2011-12 in respect of Shares held in dematerialized mode to NSDL &
 CDSL.
 
 PARTICULARS OF EMPLOYEES
 
 A statement under sub-section (2A) of Section 217 of the Companies Act,
 1956 read with Companies (Particulars of Employees) Rules, 1975 as
 amended, forming part of this Directors Report is given in Annexure-C.
 
 HUMAN RESOURCES
 
 Your Company believes that employees form the fulcrum of growth and
 differentiation for the organization.  The Company recognizes that
 people are its principal assets and that its continued growth is
 dependent upon the Companys ability to attract and retain quality
 people. The total headcount increased to 3477 at the end of the year as
 compared to 3012 of the previous year. The Company encourages long-term
 commitment to the Company by rewarding its people for the opportunities
 they create and the value generated for customers and shareholders. The
 Company conducts several training programmes to upgrade the skills of
 the workforce.
 
 ACKNOWLEDGEMENT
 
 Your Directors place on record their appreciation of the co-operation
 and support extended to the Company by Government of India, State
 Governments of Haryana and Uttrakhand, other local authorities,
 bankers, suppliers, customers and other stakeholders whose continued
 support has been a source of strength to the Company. The continued
 dedication and sense of commitment shown by the employees at all levels
 during the year deserve special mention.
 
 The Directors also place on record their appreciation for the valuable
 assistance and guidance extended to the Company by Showa Corporation,
 Japan and for the encouragement and assurance, which our collaborator
 has provided from time to time for the growth and development of the
 Company.
 
 The Directors also take this opportunity to express their deep
 gratitude for the continued co-operation and support received from its
 valued shareholders.
 
                                          For and on behalf of the Board
 
 Place: New Delhi                                BRIJMOHAN LALL MUNJAL
 Dated: May 20, 2011                                         Chairman