WABCO-TVS (INDIA)

The directors herewith present the fourth annual report and the audited
 accounts for the year ended 31st March 2008.
 
 2. FINANCIAL HIGHLIGHTS
 
 Rs. in lakhs
 
 Details                                    Year ended   Year ended
                                            31.03.2008   31.03.2007
 
 Sales and other income                      54,655.07        -
 
 Gross profit before interest and
 depreciation                                11,777.04      (0.61)
 
 Interest -Net                                  328.68        -
 
 Depreciation                                 1,011.71        -
 
 Profit before tax                           10,436.65        -
 
 Provision for taxation (including
 deferred tax and fringe benefit tax)         3,452.59        -
 
 Profit after tax                             6,984.06        -
 
 Surplus /(loss) brought forward from
 previous year                                   (0.74)     (0.13)
 
 Profit and loss account balance
 transferred from demerged company,
 namely Sundaram-Clayton Limited
 (SCL) as on 1st January 2007                 3,214.58        -
 
 Proift after tax for three months ended
 from 1st January 2007 to 31st
 March 2007 transferred from SCL                220.55        -
 
 Total                                       10,418.45     (0.74) 
 
 Appropriations:
 Interim dividend paid                          943.63        -
 
 Interim dividend payable                     1,138.06        -
 
 Dividend tax paid                              160.37        -
 
 Dividend tax payable                           193.41        -
 
 Transfer to general reserve                  5,467.88        -
 
 Surplus/(Loss) in Profit & loss account      2,515.10     (0.74)
 
                                             10,418.45     (0.74)
 
 
 Notes: The results of the Company for the current financial year
 2007-2008 are not comparable with that of the previous year 2006-2007
 as the current years figures are inclusive of figures of the demerged
 undertaking, namely brakes business which stood transferred to/vested
 in the Company effective 28th March 2008 in terms of the Scheme of
 Arrangement between the Company and Sundaram-Clayton Limited (SCL) and
 their respective shareholders and creditors sanctioned by the Honble
 High Court of Madras vide its order dated 20th February 2008 and the
 same was filed with the Registrar of Companies, Tamilnadu, Chennai on
 28th March 2008.
 
 3.  SCHEME OF ARRANGEMENT AND SHARE CAPITAL
 
 During the year under review, the Honble High Court of Madras approved
 the Scheme of Arrangement between Sundaram-Clayton Limited (SCL) and
 the Company and their shareholders and creditors (the Scheme) vide its
 order dated 20th February 2008 without any modification as approved by
 the shareholders of the Company in the Court convened meeting held on
 22nd October 2007 under the Chairmanship of Mr H Lakshmanan, director
 of the Company.
 
 As per the Scheme and in terms of sections 391-394 read with sections
 78, 100 to 103 and other applicable provisions of the Companies Act,
 1956, the demerged undertaking, namely brakes business of SCL
 comprising of all properties (with rights and powers of every
 description), investments, assets and liabilities (includes duties of
 every description) stood transferred to / vested in the Company from
 the Effective date, namely 28lh March 2008.
 
 Accordingly, the authorized capital of the Company stood enhanced to
 Rs. 10,00,00,000 consisting of 2,00,00,000 equity shares of Rs.5/-
 each. Further, the Company also issued and allotted on 7th May 2008,
 1,89,67,584 equity shares of Rs.5/- each fully paid up equity shares to
 the equity shareholders of SCL in the ratio of one equity share of
 Rs.5/- each for every one equity share of Rs.10/- each held by the
 equity shareholders of SCL in SCL in terms of the Scheme.
 
 In pursuance of the said Scheme, 1,00,000 equity shares of Rs.5/- each
 of the Company fully paid up held by SCL including its six nominees
 stood extinguished and the paid up equity share capital of the Company
 stood thus reduced accordingly.
 
 4.  LISTING OF SHARES
 
 1,89,67,584 new Equity shares of Rs.5/- each of the Company allotted on
 7th May 2008 to the equity shareholders of SCL in terms of the Scheme,
 are required to be listed on the Madras Stock Exchange Limited, Bombay
 Stock Exchange Limited and the National Stock Exchange of India
 Limited. The Company, being an unlisted Company, has applied for
 exemption under Rule 19(2)(b) of Securities Contracts (Regulations)
 Rules, 1957 from Securities and Exchange Board of India (SEBI). The
 application seeking exemption is being examined by SEBI to have the new
 equity shares listed.  Permissions for listing and trading on the above
 Stock Exchanges are awaited.
 
 5.  DIVIDEND
 
 During the year, the board of directors of the Demerged Company, namely
 Sundaram-Clayton Limited (SCL), declared an interim dividend of Rs.7/-
 per share on 30th October 2007 and paid to the shareholders on 7th
 November 2007.
 
 Since the Appointed date, namely 1st January 2007 for demerger of the
 Demerged undertaking, namely brakes business into the Company takes
 effect retrospectively from this date, a sum of Rs.943.63 lakhs
 (Rs.4.975 per share representing 99% on the paid up share capital of
 Rs.948.38 lakhs) was apportioned and reckoned as interim dividend by
 the Company on the basis of the profit earned by the Company in
 2007-2008.
 
 The board of directors at their meeting held on 20th August 2008 have
 declared an interim dividend of Rs.6/- per share, for the year ended
 31st March 2008, absorbing a sum of Rs. 1138.06 lakhs (representing
 120% on the paid up share capital of Rs.948.38 lakhs).  This will be
 paid to the shareholders on or after 8th September 2008.
 
 The board of directors do not recommend any further dividend for the
 year under consideration and the interim dividends totalling (219%)
 paid in the manner described above amounting to Rs.2,081.69 lakhs
 (representing Rs.10.975/- per share of Rs.5/- each), be considered as
 the final dividend for the year 2007-2008.
 
 6.  PERFORMANCE
 
 During the year 2007-2008, the sales of medium and heavy commercial
 vehicles registered a negative growth of 1% over the previous year
 2006-2007 and the sale of light commercial vehicles registered a growth
 of 13% during the same period. Overall, the commercial vehicle industry
 ended with 5% growth over the previous year.
 
 During the year, the Company achieved a total turnover of Rs.547
 crores. This increase was mainly driven by (a) increased share of
 market, (b) increase in content per vehicle and (c) increase in sales
 to after-market.
 
 7.  CAPITAL EXPENDITURE
 
 A capital expenditure of Rs.73 crores is planned during 2008-2009 after
 taking into account the long term business prospects and export orders.
 This is estimated to generate additional sales commencing from
 2008-2009.
 
 8.  DIRECTORS
 
 During the year, Mr Venu Srinivasan, director of the company, was
 appointed as Chairman effective 28th March 2008, not liable to retire
 by rotation in accordance with article 147 of the articles of
 association of the Company.
 
 During the year, Mr C N Prasad was appointed as an additional director
 of the Company effective 28th March 2008 by the board.  Similarly, Mr
 Leon Liu, Mr Nikhil Madhukar Varty, Mr D E Udwadia and Vice Admiral Mr
 P J Jacob (Retd.) were appointed as additional directors of the Company
 effective 7th May 2008. Mr Narayan K Seshadri was appointed as an
 additional director of the company effective 11th June 2008.
 
 During the year, Mr C Narasimhan resigned from the board effective 28th
 March 2008. The board of directors wish to place on record its
 appreciation of the services rendered by him during his tenure as a
 director of the Company. Mr Trevor Lucas resigned from the board
 effective 11th June 2008 and was appointed as an alternate director to
 Mr Leon Liu, the original director, effective 11th June 2008.
 
 During the year, Mr H Lakshmanan, director, will be retiring at this
 annual general meeting and is eligible for re-appointment in terms of
 the articles of association of the Company.
 
 Mr C N Prasad, Mr Leon Liu, Mr Nikhil Madhukar Varty, Mr D E Udwadia,
 Vice Admiral Mr P J Jacob (Retd.) and Mr Narayan K Seshadri, appointed
 as additional directors will vacate their office in terms of section
 260 of the Companies Act 1956 at the ensuing annual general meeting of
 the Company and are eligible for reappointment.
 
 Notices have been received from members of the company signifying their
 intention to propose the appointment of Mr C N Prasad, Mr Leon Liu, Mr
 Nikhil Madhukar Varty, Mr D E Udwadia, Vice Admiral Mr P J Jacob
 (Retd.) and Mr Narayan K Seshadri as directors of the company in terms
 of section 257 of the Companies Act, 1956 along with the requisite
 deposit of Rs.500/- each.
 
 Appropriate resolutions for their re-appointment and appointment are
 being placed for approval of the shareholders at the ensuing annual
 general meeting. The directors recommend their re- appointment /
 appointment as directors of the Company.
 
 9.  AUDITORS
 
 M/s Sundaram & Srinivasan, Chartered Accountants, retire at the ensuing
 annual general meeting and are eligible for re-appointment.
 
 10.  STATUTORY STATEMENTS
 
 Conservation of energy, technology absorption and foreign exchange
 earnings and outgo
 
 As per the requirements of Section 217(1)(e) of the Companies Act,
 1956, 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 the Annexure I to this report.
 
 Particulars of employees
 
 As required by the provisions of section 217(2A) of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975 as
 amended, the names and other particulars of the employees are set out
 in the Annexure II to this report.
 
 Directors Responsibility Statement
 
 Pursuant to the requirement of Section 217(2AA) of the Companies Act,
 1956 with respect to directors responsibility statement, it is hereby
 confirmed:
 
 (i) that in the preparation of annual accounts for the financial year
 ended 31st March 2008, the applicable accounting standards have been
 followed along with proper explanation relating to 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 Companies Act, 1956 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 2008 on a going concern basis.
 
 11.  ACKNOWLEDGEMENT
 
 The directors gratefully acknowledge the support and co-operation
 received from M/s. T V Sundram Iyengar and Sons Limited, Madurai, and
 WABCO Europe BVBA.
 
 The directors thank the vehicle manufacturers, distributors, vendors
 and bankers for their continued support and assistance.
 
 The directors wish to place on record their appreciation of the
 excellent work done by all the employees of the Company during the
 year. The directors specially thank the shareholders for their faith in
 the Company.
 
 
                                      For and on behalf of the board
 
 Chennai                                             VENU SRINIVASAN
 20th August 2008                                           Chairman