Dear Shareholders,
 
 The Board of Directors of your Company is pleased to present the 39th
 Annual Report on the business and operations of the Company together
 with the audited Balance Sheet and Profit and Loss Account and
 Auditors'' Report thereon for the financial year ended 31st March, 2011.
 
 1.  PRODUCTION REVIEW:
 
 The production performance for the year is shown below in physical
 terms : I
 
 Description                                 2009-2010        2010-2011
 Three wheelers                                 12,178           14,381
 
 2.  SALES REVIEW:
 
 The Sales performance for the year is shown below :
 
                                  2009-2010                   2010-2011
 
 Description            Physical  Financial     Physical      Financial
                       (in Nos.) (Rs in lakhs)   (in Nos.) (RS, in lakhs)
 
 Three Wheelers           11,720   12,492.07       14,039     15,770.98
 
 Spares                     -         468.03          -          464.42
 
 Petrol, Dtesel, 
 Lubricants etc.            -       1,024.34          -      * 1,240.12
 
 Other Sales                -          73.63          -           77.85
 
 TOTAL                      -      14,058.07          -       17,553.37
 
 3.  FINANCIAL REVIEW:
 
 The salient features of the Company''s financial results for the year
 under review are as follows:
 
                                                         (Rs in Lakhs)
 
 Description                                 2009-2010     2010-2011
 
 a) Profit/(Loss) before Depreciation       (2,637.40)    (1,577.59)
 
 b) Depreciation                               151.44        133.55
 
 c) Profit/(Loss) for the year              (2,788.84)    (1,711.14)
 
 d) Prior period adjustment                    (11.70)         -
 
 e) Income Tax                                    -            -
 
 f) FBT                                           -            -
 
 Net Profit/(Loss) (PAT)                    (2,800.54)    (1,711.14)
 
 The production and sales performance of the Company improved during the
 year under report.  However the company registered a loss of Rs 17.11
 crores compared to X 28.01 crores in the previous year.
 
 4.  CONTRIBUTION TO NATIONAL EXCHEQUER
 
 The company has contributed a sum of Rs 3,811.49 lakhs to the exchequer
 during the period under review.
 
 5.  EXPORTS
 
 The company has achieved exports of Rs 25.40 lakhs during the period
 under review. The royalty income by way of foreign exchange remittances
 amounted to Rs 30.37 lakhs during the year.
 
 9.  CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO:
 
 Your company is an ISO 9001 : 2000 certified which focuses on quality
 management system.
 
 Information in accordance with provision of Section 217 (1) (e) of the
 Companies Act, 1956 regarding the conservation of energy, technology
 absorption and foreign exchange earnings and outflow are given in
 Annexure - 1, 1-A and 1-B to this report.
 
 10.  PARTICULARS OF EMPLOYEES:
 
 Information under Sec. 217(2-A) of the Companies Act, 1956 read with
 the Companies (Particulars of Employees) Rules, 1975 be treated as NIL
 as none of the employee of the company is getting salary more than the
 prescribed limit.
 
 11.  INDUSTRIAL RELATIONS:
 
 During the year under review, that is 1.4.2010 to 31.3.2011, the
 industrial relations in the Company continued to be under stress mainly
 due to non fulfillment of employees'' aspirations. The aspiratioii of
 employees regarding Wage Revision and retirement age could not be
 fulfilled due to Company''s poor financial health.
 
 12.  VIGILANCE:
 
 Vigilance Group continues to function with particular emphasis on the
 aspects of preventive and corrective vigilance. In selected areas,
 surprise checks and system studies were carried out and the
 improvements suggested were implemented. Company also observed
 Vigilance Awareness Week from 25.10.2010 to 01.11.2010.
 
 13.  HUMAN RESOURCE DEVELOPMENT :
 
 Employees of the Company are the most important constituent and Company
 understands that without their motivation and development Company can
 not progress. The Company has been analyzing developmental needs in
 technical and managerial areas and provides requisite training and
 exposure to the employees at all levels in the area on Product
 upgradation, Energy Conservation, Total Productive Maintenance, Safety,
 Customer Satisfaction, Quality & Environmental Management Systems,
 Productivity and Work Culture.
 
 14.  HINDI IMPLEMENTATION:
 
 Official Language implementation Committee monitors and reviews the
 progress of implementation of the Annual Programme issued by Department
 of Offical Language, Ministry of Home Affair, Government of India.
 Hindi Divas is commemorated every year by observing offical language
 week in the month of September. Various competitions are organized for
 employees and winners are felicitated.
 
 15. RESERVATION FOR SCHEDULED CASTES & SCHEDULED TRIBE:
 
 As on 31.3.2011, the total strength of the company is 1011. Out of
 these, 246 employees belong to Scheduled Castes and 02 employees to
 Scheduled Tribe.
 
 16.  DIRECTORS:
 
 Shri P. Muthusamy, Director (Finance), has been relieved from SIL
 w.e.f. 17th March, 2011. The Company has taken up the matter with DHI
 for filling up the vacant positions of Independent Directors as well as
 Director (Fin.) on the Board.
 
 Shri S.K. Tripathi, Independent Director, retired w.e.f. 5th July,
 2010.
 
 The Board records the appreciation for contribution made by aforesaid
 Directors during their association with the Company.
 
 17.  DIRECTORS'' RESPONSIBILITY STATEMENT:
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956, with respect to Directors'' Responsibility Statement, it is
 hereby confirmed :
 
 (a) That in the preparation of the accounts for the financial year
 ended 31st March 2011, the applicable accounting standards have been
 followed along with proper explanation relating to material departures;
 
 (b) That the Directors have selected such accounting policies and
 applied them consistently and made judgements and estimates that were
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company at the end of the financial year and of the
 profit or loss of the Company for the year under review;
 
 (c) That the Directors have taken proper and sufficient care 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;
 
 (d) That the Directors have prepared the accounts for the financial
 year ended 31st March 2011 on* a ''going concern'' basis.
 
 18.  ADEQUACY OF INTERNAL CONTROL:
 
 The Company has proper and adequate system of internal controls to
 ensure that all activities are monitored and controlled against any
 unauthorized use of disposal of assets, and that the transactions are
 authorized, recorded and reported correctly.
 
 The Company ensures adherence to all internal control policies and
 procedures as well as compliance with all regulatory guidelines.
 
 19.  FIXED DEPOSITS:
 
 The Company has not accepted any deposits under Companies (Acceptance
 of Deposit) Rules, 1975 during the year.
 
 20.  STATUS OF REPAYMENT OF LOAN FROM GOI
 
 Due to continuing losses the company has not re-paid principal amount
 of Rs 787.20 lakhs and interest of Rs 658.58 lakhs as on 31.03.2011.
 
 21.  AUDITORS REPORT:
 
 M/s S. Srivastava & Co., Chartered Accountants have been appointed by
 the Comptroller and Auditor General of India, as Statutory Auditors of
 the Company for the year 2010-11. The Statutory Auditors'' Report on the
 Accounts of the Company for the financial year ended 31st March, 2011
 alongwith Management replies are enclosed at Annexure-V.
 
 The Accounts of the Company were submitted to the Comptroller & Auditor
 General of India for their report under Section 619(4) of the Companies
 Act 1956 and their report is appended as Annexure-IV.
 
 22.  COST AUDITOR:
 
 Shri R.N. Tripathi, Cost Accountant, Lucknow has been appointed as Cost
 Auditor of the Company by the Govt, of India, Ministry of Corporate
 Affairs, for auditing cost records relating to manufacture of Motor
 Vehicles for the financial year ending 31st March 2011.
 
 Cost audit report for the year ended at 31st March, 2010 was submitted
 with the Ministry of Corporate Affairs on 27.09.2010
 
 23.  CORPORATE GOVERNANCE:
 
 A certificate from M/s S. Srivastava & Co., Auditors of the Company
 regarding compliance of conditions of Corporate Governance as
 stipulated under Clause 49 of the Listing Agreement alongwith the
 report on Corporate Governance is attached as Annexure-4 to this
 report.
 
 24.  ACKNOWLEDGEMENT:
 
 The Board of Directors would like to express their grateful
 appreciation for the sincere support and co-operation extended by its
 Bankers, Financial Institutions, Dealers and Suppliers. The Directors
 would also like to express their sincere thanks for the co-operation
 and advice received from Government of India, particularly, Department
 of Heavy Industry and Public Enterprises, BIFR, BRPSE, the State
 Government and the local authorities for their continued support, co-
 operation and guidance.
 
 Your Directors wish to place on record their deep sense of appreciation
 for the devoted services of employees, and are deeply grateful to the
 shareholders for reposing the confidence and faith in us.
 
                                        For and on behalf of the Board
 
 Lucknow                                                    Ajai Kumar
 
 30th August, 2011                      Chairman-cum-Managing Director