Dear Members,
 
 The Directors are pleased to present their Twenty Seventh Annual Report
 together with Audited Accounts for the financial year ended 31st March
 2011, which was the 25th year since the Company commenced its
 commercial operations.
 
 PERFORMANCE REVIEW
 
 The improvement in the commercial vehicles market witnessed in the
 second half of the previous year continued and the Company was able to
 achieve the highest ever volume of sales at 12870 vehicles (10133). Net
 Revenue at Rs. 893.0 crores (Rs. 722.2 crores), Operating Profit of Rs.
 69.5 crores (Rs. 58.0 crores) and Profit before Tax at Rs. 51.4 crores
 (Rs. 30.4 crores) also set new records.
 
 Although sale of new products saw some improvement, these remained
 below targets set. Consequently, capital expenditure for the expansion
 project was restricted for the time being.
 
 Receivables remained at satisfactory level having brought these to set
 standards in the previous year, and cash flow was well controlled.
 
 It is in the above background that the Directors report the following
 summary of results for the year 2010-11
 
                                                (Rupees in Crores) 
                                     Year Ended         Year ended
                               31st March, 2011   31st March, 2010
 
 Sales Volume (Nos.)                  12870              10133
 
 Net Operating Revenue               893.00             722.23
 
 Operating Profit                     69.46              57.93
 
 Profit Before Tax                    51.38              30.43
 
 Tax Expense                          14.82               8.97
 
 Profit After Tax                     36.56              21.46
 
 Balance of Profit from Prior Years   29.82              17.28
 
 Surplus available for Appropriation: 66.38              38.74 
 
 Appropriations:
 
 Transfer to General Reserve           3.66               2.15
 
 Proposed Dividend                    11.58               5.79
 
 Tax on Dividend                       1.92               0.98
 
 Amount carried to Balance Sheet      49.22              29.82
 
 CHANGE OF COMPANY NAME
 
 Members may recall that they had approved the change of Company''s name
 from Swaraj Mazda Limited to SML Isuzu Limited through postal ballot
 process in November, 2010. Consequently, upon receipt of fresh
 Certificate of Incorporation dated 3rd January, 2011 from the Registrar
 of Companies, Punjab, Himachal Pradesh and Chandigarh, the new name of
 the Company has become effective.
 
 DIVIDEND
 
 Having regard to the improvement in financial results, the Directors
 have recommended payment of dividend for Financial Year 2010-11 @ 65%
 i.e. Rs 6.50 per share. In addition the Directors recommend a special
 dividend of 15% i.e. Rs 1.50 per share on completion of 25 years of
 commercial operations, making aggregate of 80% i.e. Rs 8.00 per share.
 Previous year''s dividend was 40%.
 
 EXPANSION PROJECT
 
 Members may recall that Company had embarked upon its Expansion Project
 in fiscal 2006-07 by setting up facilities with a view to expand its
 product portfolio aimed to capitalize on the emerging business
 opportunities in the Indian Commercial Vehicles sector and to enable it
 to foray into the manufacture of air-conditioned luxury buses and
 coaches targeted at the tourism industry and long distance inter-city
 travel.
 
 In the terms of the Rights Issue, ii had been projected that the net
 proceeds of Rs.1800 lacs, earmarked for Expansion Project, would be
 utilized by March, 2011. However, as stated in the last fiscal''s
 Directors Report, demand for luxury buses did not rise to expected
 levels. Accordingly, capital spending has been restricted to bare
 minimum and only a sum of Rs. 321.70 lacs utilized out of the aforesaid
 Rs. 1800 lacs.  Shareholders'' approval is being sought in the
 forthcoming Annual General Meeting of the Company for the deferment the
 date of completion of expenditure up to March, 2013.
 
 MANAGEMENT DISCUSSION & ANALYSIS, CORPORATE GOVERNANCE
 
 A Management Discussions and Analysis Report is annexed to this report.
 A report on Corporate Governance together with the Auditors''
 Certificate confirming compliance of Corporate Governance norms also
 forms part of this Annual Report.
 
 INDUSTRIAL RELATIONS
 
 Directors report with satisfaction that after a gap of 4-years a fresh
 Wage Agreement was concluded with the representatives of the workmen in
 cordial atmosphere.
 
 PARTICULARS OF EMPLOYEES
 
 The Company had 5 employees who were in receipt of remuneration of not
 less than Rs. 60,00,000 during the year ended 31st March, 2011 or not
 less than Rs. 5,00,000 per month during any part of the said year.
 
 A statement of particulars pursuant to Section 217(2A) of the Companies
 Act, 1956 read with Companies (Particulars of Employees) Rules, 1975,
 forms part of this report. As per the provisions of Section
 219(1)(b)(iv) of the Companies Act, 1956, the Report, together with
 Accounts, is being sent to the Shareholders of the Company, excluding
 the statement of particulars of employees under Section 217(2A) of the
 Act. Members desiring to have a copy of the same, may write to the
 Company Secretary at the Registered Office of the Company.
 
 SAFETY, HEALTH AND ENVIRONMENT
 
 The Company continues to demonstrate a strong commitment to safety,
 health and environment. These aspects have been adopted as core
 organizational value of the Company.
 
 Employees are continuously made aware of hazards / risks associated
 with their job and necessary training is imparted to them to update
 their knowledge and skill to meet any emergency situation.
 
 The Company carries out statutory safety assurance and audits its
 facilities as per legal requirements.  Regular medical and occupational
 check-up of employees are concluded and eco-friendly activities are
 promoted.
 
 The Company has installed incinerator plant to safely dispose of
 hazardous waste. A sewage treatment plant has also been installed to
 ensure eco-friendly disposal.
 
 ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, ETC.
 
 A report required under the Companies (Disclosure of particulars in the
 Report of Directors) Rules 1988 is annexed to this Report.
 
 CURRENT BUSINESS ENVIRONMENT
 
 There are concerns that the estimated 8.5% economic growth in fiscal
 2010-11 may not be sustained on account of various factors - both
 domestic & external, most importantly the effects of rising inflation,
 and the continuing uncertainties in most lead economies in the world.
 It is appropriate, therefore, to assume that the CV industry may not
 sustain the growth recently witnessed. The first two months of the
 current fiscal year has seen growth of CV volumes of 15% at half the
 rate of the comparable months last year;and the SML Isuzu segment''s 
 growth is only 1% (17500 against 17300).Company''s sales for the 
 first two months stayed flat (1672 against 1699). Margins, too, 
 will be under pressure with prices of metals and petroleum products 
 showing no signs of coming down.
 
 Despite the foregoing, the Directors look at the current year with
 cautious optimism because of the initiatives taken to maintain growth
 in traditional products at recent levels and enhancement in the
 performance of new products.
 
 DIRECTORS
 
 Mr Yash Mahajan decided to demit office of the Managing Director upon
 completion of his tenure of 5 years on 31st May, 2011. The Directors
 respected his decision and placed on record their deep sense of
 appreciation of his strong and inspirational leadership as Managing
 Director of the Company since its establishment in 1983, his dedication
 and outstanding contribution to nurturing it to its present position.
 They wished Mr. Mahajan a happy and healthy life ahead.
 
 The Directors appointed Mr. Yutaka Watanabe, presently Whole-time
 Director of the Company, as Managing Director and Chief Executive
 Officer of the Company for a period of 5 years with effect from 1st
 June, 2011 on his existing remuneration subject to requisite approval
 of Shareholders of the Company in the General Meeting and of the
 Central Government, if required.
 
 Mr. P.K.Nanda, Mr. Pankaj Bajaj and Mr. Steven Enderby are the
 Directors retiring by rotation at the forthcoming Annual General
 Meeting.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 In terms of provision of Section 217(2AA) of the Companies Act, 1956,
 it is hereby confirmed that :
 
 i) In the preparation of annual accounts, the applicable Accounting
 Standards have been followed along with proper explanations relating to
 material departures;
 
 ii) The Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are 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 of
 the Company for the year under review;
 
 iii) 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 safe guarding the assets of
 the Company and preventing and detecting fraud and other
 irregularities;
 
 iv) The Directors have prepared annual accounts on a ''going concern''
 basis.
 
 COST AUDIT
 
 On the stipulation of the Central Government, Cost Audit of the Company
 for financial year 2010-11 was conducted by Messers Avtar Singh &
 Company, Cost Auditors. The Cost Auditors have given a clean report.
 
 AUDITORS
 
 Observations made by the Auditors, when read with the relevant notes
 under schedule ''N'' to the Accounts, are self-explanatory. As such, in
 the opinion of the Directors, they do not call for a specific reply.
 
 Messers Price Waterhouse (PW), the Company''s Statutory Auditors
 informed the Company vide letter dated 15th May, 2011 that they would
 not be able to continue as a Statutory Auditors of the Company after
 the forthcoming Annual General Meeting.
 
 Taking note of PW''s decision, Directors placed on record their
 appreciation of the services rendered by Messers Price Waterhouse,
 Chartered Accountants, as Statutory Auditors during the last 28 years
 of their association with the Company.
 
 Consequently, in the Board Meeting held on 30th June, 2011, the
 Directors, on the recommendation of the Audit Committee of the Board,
 appointed Messers B.S.R. & Company, Chartered Accountants as the
 Statutory Auditors of the Company to hold office from the forthcoming
 Annual General Meeting (AGM) of the Company to subsequent AGM subject
 to the approval of shareholders.
 
                                       FOR AND ON BEHALF OF THE BOARD
 
                               S K TUTEJA                Y. WATANABE
 
 Dated: 30th June, 2011          Chairman            Managing Director 
                                                            & CEO