Directors'' report to the shareholders 
 
 The directors have pleasure in presenting the forty-ninth annual report
 and the audited accounts for the year ended 31st March 2011.  
 
 1.FINANCIAL HIGHLIGHTS 
 
                                                      (Rupees in lakhs) 
 
 Details                         Year ended                 Year ended
                                 31.03.2011                 31.03.2010 
 
 Sales and other income           82,941.55                  53,896.83 
 
 Gross profit before interest 
 and depreciation                 10,796.62                   7,175.07 
 
 Less: Interest - Net              2,187.69                   2,052.35 
       Depreciation                4,083.09                   3,755.89 
 
 Profit before tax                 4,525.84                   1,366.83 
 
 Less: Provision for : 
 
       Income tax                    661.52                      90.00 
 
       Deferred tax                  138.48                      41.28 
 
 Profit after tax                  3,725.84                   1,235.55 
 
 Add:Tax relating to earlier 
 years                                70.68                     (75.98) 
 
                                   3,796.52                   1,159.57 
 Surplus brought forward from 
 previous year                     1,482.39                   1,110.25 
 
 Total                             5,278.91                   2,269.82 
 
 Appropriations: 
 
 First Interim dividend paid         948.38                     189.68
 
 Dividend tax paid                     3.75                        -
 
 Second Interim dividend payable   1,232.89                     474.19 
 
 Dividend tax payable                 37.78                        - 
 
 Transfer to general reserve         372.59                     123.56 
 
 Balance carried to Balance Sheet  2,683.52                   1,482.39 
 
                                   5,278.91                   2,269.82 
 
 2.  DIVIDEND The board of directors at their meeting held on 28th
 January 2011, declared first interim dividend of Rs.2.50 per share
 (50%) absorbing a sum of Rs.9.48 Cr for the year 2010-11 and the same
 was paid to the shareholders on 7th February 2011. 
 
 The board of directors at their meeting held on 12th August 2011
 declared a second interim dividend of Rs.3.25 per share (65%) absorbing
 a sum of Rs.12.33 Cr for the year 2010-11. Hence, the total amount of
 dividend including the second interim dividend payable, for the year
 ended 31st March 2011 will aggregate to Rs.5.75 per share (115%) on
 3,79,35,168 equity shares of Rs.5/- each.  The board of directors do
 not recommend any further dividend for the year under consideration.
 
 3.  PERFORMANCE 
 
 The global economic conditions continued to be strong
 and positive in 2010-11, resulting in a strong growth for the
 automotive sector. The Indian economy posted a remarkable recovery in
 terms of overall growth figures more importantly, in terms of certain
 fundamentals, which justify optimism for India in the medium to the
 long term. The data on National Income released by the Central
 Statistical Organisation estimates the growth of GDP at 8.6% in
 Financial Year (FY) 2010-11.  
 
 During the FY 2010-11, the domesticautomotive demand has recorded
 highest peaks in the history, with growth at 26.2% compared to FY
 2009-10.  
 
 During the year under review, the medium / heavy commercial
 vehicles segment recorded a positive growth of 32% and the light
 commercial vehicle segment also registered a positive growth of 23%.
 Car segment achieved a positive growth of 30% and two wheeler segment
 registered a growth of 26% (Source: SIAM).
 
 During 2010-11, economies across the world were on a steady growth path
 and the positive upswing in the World economy was better during second
 half of 2010.  
 
 - GDP in US surged by 2.9% in 2010 as against -2.6% in
 2009. (Source: FTR). 
 
 - GDP in European Union (EU) was positive at 1.8%
 in 2010 compared to -4.3% in 2009 (Source: Eurostat / IMF) 
 
 In thisbackground, North American class 8 trucks market witnessed a
 positive growth of 28% (Source: FTR). Similarly, the Europe medium and
 heavy trucks witnessed a positive growth of 6% (Source: ACEA).
 
 Particulars        2010-11     2009-10        Growth% 
 
 Sales (Tonnage)     32,239      23,193             39
 
 Sales (Rs. Cr)     764.86      492.68              55 
 
 Domestic sales 
 (Rs.  Cr)          478.12      319.96              49 
 
 Export sales 
 (Rs. Cr)           286.74      172.72              66 
 
 PBT (Rs.  Cr)       45.26       13.67             231
 
 
 
 5. RESTRUCTURING OF COMPANIES
 
 It may be recalled that the board of directors earlier in August 2010
 approved a draft composite Scheme of arrangement and amalgamation among
 the Company (the Scheme), and its wholly owned subsidiaries, namely
 Sundaram Investment Limited (SIL), TVS Investments Limited (TVSI) and
 Anusha Investments Limited (AIL) and their respective shareholders
 under Sections 391-394 of the Companies Act, 1956, (the Act), subject
 to the approval of the shareholders and other regulatory approvals, as
 may be required under the applicable securities laws.
 
 Committee of directors formed for this purpose is in consultation with
 Merchant Bankers and Valuers for finalising the draft scheme and will
 be presenting it to the board of directors within the next 6 to 8
 weeks.
 
 The directors intend to take steps for finalising the Scheme dur ing
 the current financial year, seek the approval of the Stock Exchanges
 and complete the process of getting the approval of Hon''ble High Court
 of Madras.
 
 6.  SUBSIDIARY COMPANIES
 
 As of 31st March 2011, the following are the subsidiaries of the
 Company:
 
 S. No  Name of the Company                     Subsidiary of
 
 1. Anusha Investments Limited            Sundaram-Clayton Limited
 
 2. TVS Motor Company Limited             Sundaram-Clayton Limited
 
 3. Sundaram Auto Components Limited      TVS Motor Company Limited
 
 4. TVS Energy Limited                    TVS Motor Company Limited
 
 5. TVS Housing Limited                   TVS Motor Company Limited
 
 6. TVS Motor (Singapore) Pte Limited     TVS Motor Company Limited
 
 7. TVS Motor Company (Europe) B.V        TVS Motor Company Limited
 
 8. PT. TVS Motor Company Indonesia       TVS Motor (Singapore) Pte Limited
 
 9. TVS Wind Power Limited                TVS Energy Limited
 
 10.TVS Wind Energy Limited               TVS Energy Limited
 
 11.TVS Investments Limited               Sundaram-Clayton Limited
 
 12.Sundaram Investment Limited           Sundaram-Clayton Limited
 
 13.TVS Electronics Limited               TVS Investments Limited
 
 14.TVS Capital Funds Limited             TVS Investments Limited
 
 15.TVS-E Access (India) Limited          TVS Investments Limited
 
 16.TVS-E Servicetec Limited              TVS Investments Limited
 
 17.Sravanaa Properties Limited           TVS Investments Limited
 
 18.Tumkur Property Holdings Limited      TVS Electronics Limited
 
 19.Prime Property Holdings Limited       TVS Electronics Limited
 
 Performance of major unlisted subsidiaries:
 
 Anusha Investments Limited (AIL)
 
 During the year, the wholly owned subsidiary, namely AIL, has earned a
 total income of Rs.2,268.26 lakhs, which included a dividend income of
 Rs.1,755.82 lakhs. The profit for the year before tax stood at
 Rs.2,066.98 lakhs. The Company paid dividend of Rs.255/- per share
 (255%) on 5,00,000 equity shares of Rs.100/- each during the year
 2010-11.
 
 TVS Investments Limited (TVSI)
 
 During the year, another wholly owned subsidiary, namely TVSI, has
 earned a total income of Rs.1,430.43 lakhs. The profit for the year
 before tax stood at Rs.113.61 lakhs.
 
 7. CONSOLIDATED ACCOUNTS
 
 As required under the Listing Agreement with the Stock Exchanges,
 Consolidated Financial Statements of the Company and all its
 subsidiaries are attached. The Consolidated Financial Statements have
 been prepared in accordance with the relevant Accounting Standards as
 prescribed under Section 211 (3C) of the Companies Act, 1956 (the Act).
 These financial statements disclose the assets, liabilities, income,
 expenses and other details of the Company, its subsidiaries and
 associates.
 
 The Ministry of Corporate Affairs (MCA) vide its circular no.2 in file
 No. 51/12/2007-CL-III dated 8th February 2011 has granted general
 exemption under Section 212(8) of the Act, for holding companies from
 attaching annual reports of subsidiaries along with the annual report
 of the holding companies without seeking any approval of the Central
 Government. However, this is subject to fulfilment of conditions as
 stipulated in the said circular granting general exemption to the
 holding company and passing of a resolution by the board of directors
 in this regard.
 
 The board of directors at their meeting held on 5th May 2011 passed
 necessary resolution for complying with all the conditions enabling the
 circulation of annual report of the Company without attaching all the
 documents referred to under Section 212(1) of the Act of the subsidiary
 companies to the shareholders of the Company.
 
 The annual accounts, reports and other documents of the subsidiary
 companies will be made available to the members, on receipt of a
 request from them. The annual accounts of the subsidiary companies will
 be available at the registered office of the Company and at the
 registered offices of the respective subsidiary companies concerned.
 If any member or investor wishes to inspect the same, it will be
 available during the business hours of any working day of the Company.
 
 A statement giving the following information in aggregate of each
 subsidiary including subsidiaries of subsidiaries consisting of (a)
 capital (b) reserves (c) total assets (d) total liabilities (e) details
 of investment (except in case of investment in the subsidiaries) (f)
 turnover (g) profit before taxation (h) provision for taxation (i)
 profit after taxation (j) proposed dividend has been attached with the
 consolidated balance sheet in accordance with the conditions of the
 said circular issued by MCA.
 
 8.  DIRECTORS
 
 M/s.Gopal Srinivasan, Vice Admiral P J Jacob (Retd), Suresh Kumar
 Sharma and S Santhanakrishnan, directors will be retiring at this
 annual general meeting and, being eligible, offer themselves for
 re-appointment in terms of Articles of Association of the Company.
 
 The brief resume of the aforesaid directors to be re-appointed and
 other connected information have been detailed in the Notice convening
 the annual general meeting of the Company. Appropriate resolutions for
 their re-appointment are being placed for approval of the shareholders
 at the ensuing annual general meeting. The directors recommend their
 re-appointment as directors of the Company.
 
 9.  AUDITORS
 
 M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, the
 statutory auditors of the Company, retire at the ensuing annual general
 meeting and are eligible for re-appointment.
 
 The Company has received a letter from them, stating that the
 appointment, if made, will be within the prescribed limit under Section
 224(1B) of the Act.
 
 10.CORPORATE GOVERNANCE
 
 The Company has been practicing the principles of good corporate
 governance over the years and lays strong emphasis on transparency,
 accountability and integrity.
 
 A separate section on Corporate Governance and a certificate from the
 statutory auditors of the Company regarding compliance of conditions of
 Corporate Governance as stipulated under Clause 49 of the Listing
 Agreement with the Stock Exchange(s) form part of the Annual Report.
 
 The managing director (CEO) and the executive vice president - finance
 (CFO) of the Company have certified to the board on financial
 statements and other matters in accordance with the clause 49(V) of the
 Listing Agreement pertaining to CEO/CFO certification for the financial
 year ended 31st March 2011.
 
 11. STATUTORY STATEMENTS
 
 Conservation of energy, technology absorption and foreign exchange
 earnings and outgo
 
 As per the requirements of Section 217(1)(e) of the Act, read with the
 Companies (Disclosure of Particulars in the Report of Board of
 Directors) Rules 1988, the information regarding conservation of
 energy, technology absorption and foreign exchange earnings and outgo
 are given in Annexure I to this report.
 
 Particulars of employees
 
 The particulars required pursuant to Section 217(2A) of the Act read
 with the Companies (Particulars of Employees) Rules, 1975 as amended,
 are given in Annexure II to this report. However, in terms of the
 provisions of Section 219(1)(b)(iv) of the Act, the Directors'' Report
 (excluding Annexure II) is being sent to all the shareholders of the
 Company. Any shareholder interested in obtaining a copy of the said
 annexure may write to the Company Secretary at the registered office of
 the Company.
 
 Public Deposits
 
 The Company has not accepted any deposit from the public within the
 meaning of Section 58A of the Act for the year ended 31st March 2011.
 
 Directors'' Responsibility Statement
 
 In accordance with the provisions of Section 217(2AA) of the Act with
 respect to Directors'' Responsibility Statement, it is hereby stated:
 
 (i) that in the preparation of annual accounts for the financial year
 ended 31st March 2011, the applicable Accounting Standards had been
 followed and that there were no material departures;
 
 (ii) that the directors had selected such accounting policies and
 applied them consistently and made judgments 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 of the Company for the year under review;
 
 (iii) that the directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities; and
 
 (iv) that the directors had prepared the accounts for the financial
 year ended 31st March 2011 on a going concern basis.
 
 12.ACKNOWLEDGEMENT
 
 The directors gratefully acknowledge the continued support and
 co-operation received from M/s. T V Sundram Iyengar and Sons Limited,
 Madurai.
 
 The directors thank the vehicle manufacturers, vendors and bankers for
 their continued support and assistance.
 
 The directors wish to place on record their appreciation of the
 continued excellent work done by all the employees of the Company
 during the year.
 
 The directors specially thank the shareholders for their continued
 faith in the Company.
 
                                        For and on behalf of the board
 
 Chennai                       GOPAL SRINIVASAN      VENU SRINIVASAN
 
 12th August 2011              Director              Managing Director