The Directors have pleasure in presenting their Thirty Second Annual
 Report and the Audited Statements of Accounts for the financial year
 ended March 31, 2011.
 
 FINANCIAL HIGHLIGHTS
 
                                                      (Rs. in lacs)
 
                                               2010-11        2009-10
 
 Profit Before Depreciation and Taxation     185,974.83   133,954.96
 
 Less: Depreciation and Amortisation            1,082.07     1,495.84
 
 Profit Before Tax                           184,892.76   132,459.12
 
 Less: Provision for Taxation                  61,904.76    45,147.38
 
 Profit After Tax                            122,988.00    87,311.74
 
 Add: Balance brought forward from 
 previous year                                 93,001.65    58,309.25
 
 Balance available for appropriation          215,989.65   145,620.99
 
 Appropriations
 
 General Reserve                               12,300.00     8,800.00
 
 Statutory Reserve                             24,600.00    17,500.00
 
 Debenture Redemption Reserve                  21,381.60    10,442.08
 
 Dividend on Equity Shares of Rs. 10/- each    14,684.89    13,600.65
 
 Tax on Dividend                                2,438.95     2,276.61
 
 Balance carried to Balance Sheet             140,584.21    93,001.65
 
 DIVIDEND
 
 Your Directors at their meeting held on October 27, 2010 declared an
 interim dividend of Rs. 2.50/- per equity share (i.e. 25 percent) for
 the financial year 2010-11, which was paid on November 22, 2010. The
 payment of this Interim Dividend involved an outflow, including tax on
 dividend, of Rs. 6,574.91 lacs.
 
 Your Directors have recommended a fi nal dividend of Rs. 4/- per equity
 share (i.e. 40 percent) for the financial year ended March 31, 2011.
 This dividend distribution would result in a cash outflow of Rs.
 10,548.93 lacs including tax on dividend of Rs.1,502.50 lacs.
 
 Thus, the total amount of dividend (including interim dividend paid)
 for the year ended March 31, 2011 shall be Rs. 17,123.84 lacs including
 tax on dividend of Rs. 2,438.95 lacs, as against Rs. 15,496.82 lacs,
 including tax an dividend of Rs. 2,221.35 lacs for the previous fi
 -nancial year.
 
 CAPITAL ADEQUACY RATIO
 
 Your Companys total Capital Adequacy Ratio (CAR), as of March 31,
 2011, stood at 24.85 percent of the aggregate risk weighted assets on
 balance sheet and risk adjusted value of the off-balance sheet items,
 which is well above the regulatory minimum of 12.00 percent.
 
 CREDIT RATING
 
 The credit rating enjoyed by the Company as on March 31, 2011 is as
 follows.
 
 Credit Rating Agency Instruments Ratings Limit in Rs. (lacs)
 
 CARE Non Convertible Debentures AA+ 255,000
 
 CARE Subordinate Debt AA 180,000
 
 CRISIL Fixed Deposit FAA+
 
 CRISIL Subordinate Debt AA 70,000
 
 CRISIL Non Convertible Debentures AA 50,000
 
 CRISIL Short Term P1+ 200,000
 
 ICRA Fixed Deposit MAA+
 
 FITCH Non Convertible Debentures AA(Ind) 550,000
 
 FITCH Short Term FI+(Ind) 150,000
 
 FITCH Subordinate Debt AA(Ind) 120,000
 
 OPERATIONS
 
 For the financial year ended March 31, 2011, your Company earned Profi
 t Before Tax of Rs. 184,892.76 lacs as against Rs. 132,459.12 lacs of
 the earlier year, posting an increase of 39.58 percent year-on-year.
 The Profit After Tax of Rs. 122,988.00 lacs also is 40.86 percent more
 when compared to the previous year, which was Rs. 87,311.74 lacs. The
 total income for the year under consideration was Rs. 542,965.40 lacs
 and total expenditure was Rs. 358,072.64 lacs.
 
 The total disbursements made for financing of commercial vehicles
 during the year under review were Rs. 1,988,368.64 lacs. As on March
 31, 2011, the outstanding hypothecation loans were Rs. 1,946,414.11
 lacs.
 
 During the financial year ended March 31, 2011, the Company mobilised
 Rs.119,920.93 lacs through non-convertible debentures, Rs. 17,981.66
 lacs through subordinated debts, Rs. 61,869.26 lacs through term loans,
 Rs. 10,650.00 lacs through working capital loans, Rs. 1,000.00 lacs
 through commercial paper and Rs. 1,020,361.35 lacs through assignment
 of loan receivables from the customers.
 
 ECONOMIC SCENERIO
 
 The economic meltdown originated in the United States of America in the
 year 2008 seems to have enforced a major shift in the global economic
 power hierarchy. The timely support through a series of economic
 measures and by active governmental monitoring of the financial
 health, the Indian economy registered speedy recovery. Weathering the
 turbulent global slowdown, the Indian economy managed commendable
 expansion of 8.00 percent in 2009-10 and 6.80 percent in 2008-09.
 During the financial year ended March 31, 2011, the growth has been
 reported as over 8.60 percent.  It is now widely believed that India
 could well be on course to be the third largest economy in the world in
 a couple of years, overtaking Japan. Besides, it is expected that,
 after 2020, Indias growth would be faster than that of even China.
 The Indian economy has benefi ted immensely from robust domestic demand
 and a revival in investor and consumer sentiment. This has resulted in
 stronger capital inflows into the country. The agricultural sector,
 which was lagging behind, has also performed well assisted by
 favourable monsoon, which in turn, gave a major thrust to the rural
 demand.
 
 The Indian economy is projected to grow 8.50 percent - 9.00 percent in
 2011-12. A good south-west monsoon season is forecasted for the year,
 which in turn, would give a fi llip to our growth dynamics. A 9.00
 percent GDP growth, then could be well within the reach. The Twelfth
 Five Year Plan could probably set a target growth of 9.00 percent to
 9.50 percent.  However, managing the infl ationary pressures and the
 balance of payment situation would be a challenge. Besides, the
 volatile interest rates could also prove to be a dampener.
 
 The growth of the commercial vehicle segment, which is closely linked
 to the countrys GDP growth, has also been good during these years.
 During the year ended March 31, 2011, the passenger vehicles segment
 grew at 29.16 percent when compared to the previous year. During this
 period, utility vehicles grew by 18.87 percent and multi-purpose
 vehicles grew by 42.10 percent. The overall commercial vehicles segment
 registered growth of 26.97 percent during April- March 2011 as compared
 to the same period last year. While medium & heavy commercial vehicles
 registered growth of 31.78 percent, light commercial vehicles grew at
 22.88 percent.  Three wheelers sales recorded a growth rate of 19.44
 percent in April-March 2011. While passenger carriers grew by 22.03
 percent during April-March 2011, goods carriers registered growth of
 9.45 percent. In the export front, during April-March 2011, the
 passenger vehicles segment registered marginal growth at 1.64 percent,
 while the commercial vehicles and three wheelers segments recorded
 growth of 69.51 percent and 55.86 percent respectively.
 
 The enhanced industrial activity, expected agricultural growth and huge
 governmental expenditure on infrastructure development are some of the
 major factors, which are expected to propel the demand for new
 commercial vehicles.  Besides, increased passenger movement through the
 roads and introduction of new and improved vehicles in the market are
 also expected to push up the demand. It is projected that during the fi
 nancial year 2011-12, the light commercial vehicle and the medium &
 heavy commercial vehicle segments would grow 18-21 percent and 10-12
 percent respectively.  The passenger bus segment would be recording a
 growth of 8-10 percent. The three wheelers (cargo) and three wheelers
 (passenger) would grow 4-6 percent and 10-12 percent respectively.
 
 The sale of commercial vehicle has averaged about 11.00 percent in the
 fi ve years ended 2010. Considering the typical life cycle of the
 commercial vehicles, most of the vehicles that have been sold in the
 last four to fi ve years would be due for resale shortly. The market
 for large commercial vehicle in India alone is estimated to be about
 Rs. 70,000 crores and the market for financing the pre-owned vehicles
 of 5-12 years is expected to be around Rs. 40,000 crores. Your Company,
 therefore, expects that the demand for commercial vehicles financing
 would continue to remain strong.
 
 FIXED DEPOSITS
 
 As on March 31, 2011, there were 635 fi xed deposits aggregating to Rs.
 278.50 lacs that have matured but remained unclaimed. There were no
 deposits, which were claimed but not paid by the Company. The unclaimed
 deposits have since fallen down to 569 deposits amounting to Rs. 221.22
 lacs.  Appropriate steps are being taken continuously to obtain the
 depositors instructions so as to ensure renewal/ repayment of the
 deposits in time.
 
 SUBSIDIARIES
 
 The Company has two wholly owned subsidiaries viz.  Shriram Equipment
 Finance Company Limited (SEFCL) and Shriram Automall India Limited
 (SAIL). These subsidiary companies are non-material Indian unlisted
 subsidiaries of the Company.
 
 Shriram Equipment Finance Company Limited (SEFCL):
 
 SEFCL is engaged in the business of hire purchase/loan financing of
 equipment, especially construction equipment and has been registered
 under Section 45-IA of the Reserve Bank of India Act, 1934 as
 Non-Banking Finance Company (Non-Deposit Accepting) vide Certifi cate
 No. N-07-00786 dated October 8, 2010 issued by Reserve Bank of India.
 
 For the financial year ended March 31, 2011, which is the first full
 financial year of operation, SEFCL has reported income from operations
 of Rs. 2,002.83 lacs as against none for the previous year and Profit
 after tax of Rs. 115.70 lacs as against loss of Rs. 1.19 lacs for the
 earlier year.
 
 During the year under review, your Company subscribed to 15,000,000,
 0.01 percent compulsorily convertible preference shares of Rs. 100/-
 each issued by SEFCL.
 
 Shriram Automall India Limited (SAIL):
 
 SAIL plans to set up Automalls, which would be a trading platform for
 the sale of pre-owned commercial vehicles. In these Automalls to be
 set up by SAIL, it intends to provide showrooms for new commercial
 vehicles, a platform for sale of refurbished pre-owned commercial
 vehicles and will also facilitate sale of commercial vehicles
 repossessed by financing companies and for this purpose would set up
 touch-screen kiosks across the country, through which customers will be
 able to access real- time information on pre-owned vehicles available
 for sale. SAIL proposes that the Automalls would ultimately become a
 one- stop shop catering to the various needs of commercial vehicle
 owners. SAIL opened its first Automall in Chennai in the month of
 March 2011 and has a target of opening 50 to 60 Automallsin the
 current financial year.
 
 For the financial year ended March 31, 2011, SAIL has reported income
 from operations of Rs. 6,216.27 lacs as against none for the previous
 year. Being the initial stages of its operations the company has
 incurred a loss of Rs. 1,391.51 lacs as compared to the loss of Rs.
 0.55 lacs for the period ended on March 31, 2010.
 
 During the year under review, your Company subscribed to 9,950,000
 equity shares of Rs. 10/- each issued by SAIL.
 
 In terms of the Circular No: 51/12/2007-CL-III dated February 08, 2011
 of the Ministry of Corporate Affairs, Government of India, the Board of
 Directors of the Company at their meeting held on April 29, 2011 has,
 by resolution passed thereat, given their consent for not attaching the
 Annual Reports of the subsidiaries to the Balance Sheet of the Company.
 A statement on consolidated financial position of the Company with
 that of the subsidiaries is attached to the Annual Report.  The
 consolidated financial statements attached to this Annual Report are
 prepared in compliance with the applicable Accounting Standards and
 Listing Agreement.
 
 The annual reports and the annual accounts of the subsidiaries and the
 related detailed information shall be made available to Shareholders of
 the Company and the subsidiaries seeking such information at any point
 of time. The annual accounts of the subsidiaries shall also be kept for
 inspection by shareholders at the Registered office of the Company and
 of the respective subsidiaries. The Company shall furnish hard copy of
 details of accounts of the subsidiaries to any Shareholder on demand.
 
 The annual accounts of the subsidiaries shall be available on the
 website of the Company viz. www.stfc.in and shall also be provided to
 the Shareholders on their written request to the Company.
 
 SHARE CAPITAL
 
 During the year under review, the Company allotted 642,850 fully paid
 up equity shares of the face value of Rs. 10/- each to its employees on
 exercise of stock options by them.
 
 Details of the shares issued and allotted under the Employees Stock
 Option Scheme of the Company, as well as the disclosures in compliance
 with Clause 12 of the Securities and Exchange Board of India (Employee
 Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
 1999 are set out in Annexure to this Report.
 
 PUBLIC ISSUE OF NCDs
 
 With a view to develop an additional channel for raising monies to fund
 the business operations, your Company, pursuant to the Securities and
 Exchange Board of India (Issue and Listing of Debt Securities)
 Regulations, 2008 and subject to the necessary approvals, consents and
 permissions, issued and allotted Secured and Unsecured Non Convertible
 Debentures (NCDs), through a public issue and raised a sum of Rs.
 49,999.99 lacs in May 2010.
 
 Considering the potential in raising funds through public issuance of
 NCDs and the extra ordinary support received from the investing public
 for its previous NCDs offerings, your Board, at its meeting held on
 April 29, 2011, has decided to offer and allot to public, subject to
 the aforementioned Regulations and such approvals as may be necessary,
 secured NCDs not exceeding Rs. 200,000 lacs.
 
 CORPORATE SOCIAL RESPONSILITY INITIATIVES
 
 Your Company is fully aware of the fact that as a corporate citizen, it
 is also entrusted with the responsibility to contribute for the
 betterment of the community at large and has the necessary resources at
 its disposal to do so. Hence, your Company endeavours to empower the
 under privileged and the weaker sections of the community. Your Company
 has been supporting several NGOs involved in educational, vocational
 and other charitable programmes and has continued to engage itself in
 social welfare activities by contributing to charitable institutions.
 
 During the financial year ended March 31, 2011, your Company supported
 a variety of charitable projects and has contributed a sum of Rs.
 272.06 lacs to several charitable organizations.
 
 HUMAN CAPITAL
 
 Your Company fi rmly believes that the human capital built up by it
 over the years is its most valuable asset and all efforts are made to
 empower them continuously. The broader employee ownership of its share
 capital has contributed to a large extent on retaining its employees
 and has also impacted positively on the Companys performance.
 Imparting of training through internal as well as external training
 programmes is being done continuously so as to equip them to face the
 new challenges in the market place.
 
 As of March 31, 2011, the Company has 16,919 employees.
 
 DIRECTORATE
 
 As per Section 256 of the Companies Act, 1956, Mr. Arun Duggal, Mr.
 Ranvir Dewan and Mr. S. Venkatakrishnan would retire by rotation at the
 ensuing Annual General Meeting, and being eligible, offer themselves
 for re-appointment.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions of Section 217(2AA) of the Companies Act,
 1956, the Directors confi rm that, to the best of their knowledge and
 belief:
 
 a.  In the preparation of the Annual Accounts, the applicable
 Accounting Standards have been followed along with proper explanation
 relating to material departures;
 
 b.  That such accounting policies as mentioned in Schedule 21.1 of the
 Accounts have been selected and applied consistently, and judgments and
 estimates have been made 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 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;
 
 d.  The Annual Accounts have been prepared on a going concern basis.
 
 RBI GUIDELINES
 
 The Company continues to comply with all the requirements prescribed by
 the Reserve Bank of India, from time to time, as applicable to it.
 
 CORPORATE GOVERNANCE
 
 The Report on Corporate Governance forms part of the Directors Report,
 and is annexed herewith.
 
 As required by the Listing Agreement, Auditors Report on Corporate
 Governance and a declaration by the Managing Director with regard to
 Code of Conduct are attached to the said Report.
 
 The Management Discussion & Analysis is given as a separate statement
 forming part of the Annual Report.
 
 Further, as required under Clause 49 of the Listing Agreement, a
 certifi cate, duly signed by the Managing Director and Chief Financial
 officer on the Financial Statements of the Company for the year ended
 March 31, 2011, was submitted to the Board of Directors at their
 meeting held on April 29, 2011. The certifi cate is attached to the
 Report on Corporate Governance.
 
 Corporate Governance - Voluntary Guidelines: The Board of Directors
 have taken note of the Corporate Governance Voluntary Guidelines 2009
 issued by the Ministry of Corporate Affairs (MCA) in December 2009.
 Though these guidelines are recommendatory in nature, the Board is
 aware of its importance and would consider adopting the relevant
 provisions of these Guidelines as and when deemed appropriate.
 
 AUDITORS
 
 M/s. S. R. BATLIBOI & Co., Chartered Accountants, Mumbai and M/s. G. D.
 Apte & Co., Chartered Accountants, Mumbai, Auditors of the Company,
 retire at the conclusion of the ensuing Annual General Meeting and are
 eligible for re-appointment.  Certifi cates have been received from
 them to the effect that their re-appointment as Auditors of the
 Company, if made, would be within the limits prescribed under Section
 224(1B) of the Companies Act, 1956. They have also confi rmed that they
 hold a valid peer review certifi cate as prescribed under
 
 Clause 41(1)(h) of Listing Agreement. Members are requested to consider
 their re-appointment.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
 EARNINGS & OUTGO
 
 Pursuant to the requirement under Section 217(1)(e) of the Companies
 Act, 1956, read with Companies (Disclosure of Particulars in the Report
 of the Board of Directors) Rules, 1988:
 
 a.  The Company has no activity involving conservation of energy or
 technology absorption.
 
 b.  The Company does not have any Foreign Exchange Earnings.
 
 c.  Outgo under Foreign Exchange - Rs. 0.76 lacs.
 
 PARTICULARS OF EMPLOYEES
 
 Information in accordance with the provisions of Section 217(2A) of the
 Companies Act, 1956 read with Companies (Particulars of Employees)
 Rules, 1975, as amended, forms part of the Directors Report. However,
 as per the provisions of Section 219(1)(b)(iv) of the Companies Act,
 1956, this Report and Accounts are being sent to all the Shareholders
 of the Company, excluding the statement of particulars of employees
 under Section 217(2A) of the Companies Act, 1956.  Any Shareholder
 interested in obtaining a copy of the said statement may write to the
 Vice President (Corporate Affairs) & Company Secretary at the Head Offi
 ce of the Company, and the same will be sent by post.
 
 ACKNOWLEDGEMENT
 
 The Board of Directors would like to place on record their gratitude
 for the guidance and cooperation extended by Reserve Bank of India and
 the other regulatory authorities.  The Board takes this opportunity to
 express their sincere appreciation for the excellent patronage received
 from the Banks and Financial Institutions and for the continued
 enthusiasm, total commitment, dedicated efforts of the executives and
 employees of the Company at all levels. We are also deeply grateful for
 the continued confi dence and faith reposed on us by the Shareholders,
 Depositors, Debenture holders and Debt holders.
 
 For and on behalf of the Board of Directors
 
 Arun Duggal
 
 Chairman
 
 Mumbai
 April 29, 2011