The Directors are pleased to present the 31st Annual Report and Audited
 Accounts for the year ended March 31, 2011.
 
 FINANCIAL RESULTS                                     (Rs. in Million)
 
                                              2010-2011       2009-2010
 
 Sales (net) and other Income                    3080.9          2219.8
 
 Profit before depreciation and tax               731.0           489.1
 
 Depreciation                                     148.7            76.1
 
 Provision for tax                                173.3           130.7
 
 Net Profit                                       409.0           282.3
 
 Depreciation / Taxation written-back               0.1             4.3
 
 Balance Brought Forward from                      10.0            13.4 
 Previous year
 
 Amount available for appropriation               419.1           300.1
 
 APPROPRIATIONS
 
                                                  300.0           200.0 
 General Reserve
 
                                                   52.7            52.9 
 Proposed Dividend and Tax thereon
 
                                                   52.9            37.2 
 Interim Dividend and Tax thereon
 
                                                   13.5            10.0 
 Balance Carried Forward
 
                                                  419.1           300.1
 
 
 Dividend
 
 In November 2010, your Company had paid an interim dividend of Rs. 5
 per share. Your Directors are now pleased to recommend a final dividend
 of Rs.5 per share for the year ended March 31, 2011. The total dividend
 for the year 2010-11 would accordingly be Rs. 10 per share as against
 Rs. 8.50 per share for the year 2009-10.
 
 Management Discussion and Analysis Report
 
 The Indian economy exhibited a broad-based recovery in 2010-11 and
 could regain its pre-crisis growth trajectory.  Agriculture showed a
 rebound. Industry too, achieved its earlier momentum. Services sector
 continued its near double digit march.
 
 One of the most favourite and highly tracked sector in any economy is
 the Auto sector given its importance to the economy. According to a
 recent report published by KPMG, the Auto sector has been a key driver
 of the Indian economy, accounting for around 4% of Indias GDP. The
 sector is especially of interest, after it has emerged stronger from
 the recent global downturn, and sales across all segments have seen
 record breaking numbers in the recent past. The Indian Automobile
 sector has emerged as the 7th largest and fastest growing market in the
 world in 2010. India has become a favourite investment destination as
 an Auto Hub, and is expected to remain the same in the future, too.
 This has attracted a lot of foreign investment
 
 along with higher competition, thus driving the domestic players to
 become more efficient.
 
 The overall Commercial Vehicles segment registered a positive growth of
 30 percent during April-March 2011 as compared to the same period last
 year. Passenger Vehicles including Passenger Cars segment during April-
 March 2011 grew over 24 percent over same period last year.
 
 Review of Operations
 
 Operating Results of the Company
 
 Sales
 
 Comparative quantitative figures of Sales are as under:
 
                                                   (numbers)
 
 Type                   2010-11        2009-10       Growth
 
 Power Steerings        180,639        121,342          49%
 
 Mechanical Steerings   155,937        124,151          26%
 
 Rack & Pinion           20,430         17,225          19%
 
 Other Income
 
 Other Income improved substantially from Rs. 59 million to Rs. 99
 million in view of the better capital-market conditions for major part
 of the year.
 
 Profitability
 
 Raw Material cost as a percentage of sales was down by 2 % for the year
 due to lower commodity-prices, strong rupee and indigenization of some
 of the imported components. However, Employees costs have gone up by
 33 % over the previous year. Depreciation was higher at Rs. 149 million
 against Rs. 76 million (previous year) in view of the full years
 depreciation on the 5 MW Wind Turbine Machines commissioned in March
 2010.  Consequently, Profit before Tax for the year was Rs. 582 million
 against Rs. 413 million in the previous year.
 
 Earnigs Per Share has jumped up from Rs. 31.59 to Rs.  45.09 .
 
 Renewable Energy – Wind Power Energy
 
 As you are aware, the Company operates 7 Wind Turbine Machines, located
 at Satara and Ahmednagar, having aggregate capacity of 6.7 MW for its
 captive power consumption. The power generated out of these windmills
 is fed into Maharashtra State Electricity Distribution Company Ltd.
 (MSEDCL) grid and the units so fed are deducted by MSEDCL in their
 bills raised on the Companys factory at Vadu Budruk. Total 6,510,888
 units were generated in 2010-11 which constituted 73 % of the factorys
 consumption of power.
 
 Outlook/ Opportunities for the Company
 
 The automotive paradigm is shifting from Europe to Asia.  Growing
 markets like India are increasingly becoming important and becoming
 primary markets for most European countries. SIAM (Society of Indian
 Automobile Manufacturers) have forecasted 18-21% growth for Light
 Commercial Vehicles, 16-18% growth for Passenger Cars, 12-14% growth
 for Utility Vehicles and 10-12% for Heavy Commercial Vehicles in
 2011-12 over the previous year.
 
 During 2010-11, your Company has added 3 important customers. Also, new
 steering types were developed for existing customers.
 
 Automobile industry, however, is very interest-sensitive.  Current
 inflation is threatening to plunge economy into crisis. Food-inflation
 remains a concern. Crude oil prices over 0 a barrel and high metal
 prices could further accelerate inflation and interest-rates. RBI,
 through its recent policy-announcement, has manifested that the
 priority is to rein in headline inflation, even at the cost of lower
 growth going forward. This is a marked departure from their previous
 monetary-policy stance of supporting growth while containing
 inflationary pressures. The RBI has acknowledged that apart from higher
 global commodity prices, the single important risk may be higher oil
 prices. Although, prices of some of the metal prices have soften down
 in a last few days, there still remains an uncertainty. The focus has
 shifted from growth momentum to stability and anchoring inflation
 expectations. Economic growth is expected to moderate in the current
 year as monetary tightening takes effect.
 
 Non-availability of adequate number of skilled manpower and increased
 wage bill are the constraints, every organization is facing today.
 
 Despite these challenges, your Company remains positive about the
 near-term outlook.
 
 Credit-Rating by ICRA
 
 The Board is happy to announce that your Company got LA+
 (adequate-credit-quality) for Term Loan and A1+
 (highest-credit-quality) for working capital credit rating from ICRA.
 
 Joint Venture (JV)
 
 ZF Lenksysteme India Private Limited
 
 During the year under report, additional capital, by way of Rights
 issue, has been raised by the JV Company in May 2010 and December 2010.
 Consequently, the paid-up capital of the JV Company now stands at Rs.
 130 million.  Your Company has subscribed to its entitlement, making
 its total investment in the JV Company to Rs. 33.8 million so far. Your
 Companys share of interest remains same at 26 % of the paid-up capital
 of the JV Company.
 
 The JV Company has initiated necessary steps for acquiring the land and
 factory building on lease, in order to establish its assembly
 operations near Pune, in the current year.
 
 Expansion and Capital Expenditure
 
 Steering Gear Systems
 
 By end of financial year 2010-11, the Company has expanded its
 installed capacity of Power Steering Gears to 3 lac units per annum and
 Mechanical Steering Gears to 2 lac units per annum at its existing
 factory at Vadu Budruk.
 
 The Company has recently acquired a leasehold plot of land at MIDC
 Talegaon Industrial Area. The Company is examining various
 opportunities in respect of that plot.
 
 Renewable Energy - Solar Power Project
 
 The rising oil import bill has been the focus of serious concern due to
 the pressure it is exerting on the economy and the foreign exchange
 resources. It is also largely responsible for energy supply shortages.
 The need for harnessing renewable source of energy, has therefore,
 gained tremendous importance not only in order to meet the growing
 demand for energy but also for the fact that fossil fuels like coal,
 oil, petroleum products and other hydro carbons are fast depleting in
 the world and particularly in India .
 
 The Indian Government is rightly giving thrust on the development of
 renewable energy to meet the energy demand of the country. In the 11th
 five-year plan, the Ministry of New and Renewable Energy (MNRE) has
 planned to increase the renewable energy capacity to 10% of the total
 energy mix in India by 2012. The projected increase in Solar capacity
 in India, can reduce Indias carbon emissions by 2.5%, which is a tenth
 of 20-25% reduction, India volunteered at the international summit on
 Climate Change in Copenhagen. Indian Renewable Energy Development
 Agency (IREDA) has announced a number of financial and fiscal
 incentives for the development of Renewable Energy.
 
 As continuous initiative for clean environment, your Company has been
 investing in Green Energy projects.  Earlier, the Company has invested
 in Wind-Power projects. Your Company had applied for 5 MW Solar Project
 under the Gujarat Governments Solar Power Policy, as Solar radiation
 over Gujarat has maximum intensity in India and the average rainfall is
 scanty in most parts of the state, hence best suited for solar power
 generation. Gujarat Government selected very few companies, your
 Company being one of them. Your Company has adopted Thin Film Solar
 Photovoltaic
 
 technology, after studying the factors like solar radiation, available
 area, temperature variation at site etc. This Project will enable your
 Company to generate clean energy, which will be a small contribution
 from your Company to the Governments clean energy drive and it will
 also help the Company in reducing Income Tax outgo in the current year
 and the next year.
 
 Gujarat Government has committed to buy all the units generated from
 this project by way of a Power Purchase Agreement (PPA) signed by the
 Gujarat Urja Vikas Nigam Ltd. (GUVNL), by offering a special tariff of
 Rs. 15 per unit for the initial 12 years, starting from the date of
 commercial operation of the project and Rs. 5 per unit from the 13th
 year to 25th year .
 
 The Project-Site is located in State run Solar Park in Charnka village,
 Santalpur Taluka, District Patan, Gujarat .
 
 The total cost of the project is Rs.700 million, part of the funding
 will be by debt. We are happy to inform you that the Company has been
 able to effect a Financial Closure of the project, at a very attractive
 interest rate, considering the current high interest-rate regime.
 
 Internal Control System
 
 The Internal Control System of the Company is responsible for the
 financial reporting, assets, adherence to management policies and to
 conduct ethical conduct within the organization. The Company has
 independent Internal Auditors for conducting internal audits of the
 financial reporting and operations of the Company. The Companys
 existing system of internal controls is commensurate with its size and
 nature of business.  Companys Internal control ensures reliable
 financial reporting, better utilization of Companys resources,
 effectiveness of operations, compliance with the legal obligations and
 the Company policies and procedures.  The Companys audit committee
 also regularly reviews with the management, external and internal
 auditors – the adequacy of internal control systems.
 
 Human Resource Development
 
 The Company has been continuously training its employees in the newer
 technical/ management skills.  Various steps have been taken for
 improving the performance of employees. During the year, 30 training
 programs ( 2 external and 28 internal) covering over 150 Training
 man-days were covered. We expect to continue the customized development
 programmes to individual employees during the year as well.
 
 Industrial relations continued to be cordial and peaceful.  The total
 number of employees as on March 31, 2011 was 909 .
 
 Cautionary statement
 
 The Management Discussion and Analysis Report is a forward looking
 Statement based on the Companys projections, estimates and
 perceptions. These statements reflect the Companys current views with
 respect to the future events and are subject to risks and
 uncertainties.  Actual results may vary materially from those projected
 here.
 
 Fixed Deposits
 
 Your Company has not accepted any fixed deposit from public.
 
 Conservation of Energy, Research And Development, Technology Absorption
 And Innovation, Foreign Exchange Earnings And Outgo:
 
 The details as required under the Companies (Disclosure of particulars
 in the Report of Board of Directors) Rules, 1988 are given in Annexure
 II to this Report.
 
 Transfer to Investor Education and Protection Fund
 
 The Company has transferred a sum of Rs. 159,840 during the year ended
 March 31, 2011 to the Investor Education and Protection Fund (IEPF)
 established by the Central Government, in compliance with Section 205C
 of the Companies Act, 1956. The said amount represents unclaimed
 dividend lying with the Company for a period of 7 years from its date
 of payment.
 
 Unclaimed Dividend for the Financial Year 2003-04 is due for transfer
 to the IEPF on September 18, 2011.
 
 Unclaimed Share-certificates
 
 Pursuant to the Securities and Exchange Board of India (SEBI)s
 circular dated December 16, 2010 and the consequent amendment to the
 Listing Agreements, Letters have been sent by the Companys Registrar &
 Transfer Agent to 252 Members, whose share- certificates comprising
 20,891 shares have remained unclaimed/ returned undelivered to the
 Company.
 
 Directors
 
 Mr. Walter Salvasohn, in view of his new assignment at ZF Shanghai
 Steerings, does not seek re-appointment at the ensuing 31st Annual
 General Meeting, when he is due to retire by rotation. The Board places
 on record its appreciation for the contribution made by Mr. Salvasohn
 during his tenure with the Company.
 
 Mr. Magnus Backlund- Vice-President and Head of Corporate Strategy
 department, ZF Lenksysteme, GmbH, is proposed to be appointed in place
 of Mr. Salvasohn.  Notice has been received from a member pursuant to
 Section 257 of the Companies Act, 1956 to this effect.
 
 At the 31st Annual General Meeting, Mr. M L Rathi, and Mr.  Manish
 Motwani retire by rotation and being eligible, offer themselves for
 re-appointment.
 
 The above appointment / re-appointments form part of the Notice of the
 31st Annual General Meeting and the relevant Resolutions are
 recommended for your approval.
 
 Profiles of these Directors, as required by Clause 49 of the Listing
 Agreement with the Stock Exchange, are provided in the Notice convening
 the Annual General Meeting of the Company.
 
 Corporate Social Responsibility
 
 As a responsible citizen, your Company supports by way of regular
 Donations to Janwani, a Non-Government Organisation (NGO) promoted by
 MCCIA (Mahratta Chamber of Commerce, Industries and Agriculture), Pune.
 Janwani takes up projects like Citizen Empowerment, Environment
 Focus, Waste Management, Road-Traffic and Public Transport to mention a
 few.
 
 Your Company has so far donated to Janwani, Rs. 3 lac each in 2009-10
 and 2010-11 and has committed to donate Rs. 4 lac in the current year.
 
 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:
 
 i) That in the preparation of the accounts for the
 
 financial year ended March 31, 2011 the applicable Accounting Standards
 have been followed along with proper explanation relating to material
 departures;
 
 ii) That the Directors have 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 as at March 31, 2011
 and of the profit of the Company for the year ended on that date.
 
 iii) 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; and
 
 iv) That the Directors have prepared the accounts on a going concern
 basis.
 
 Corporate Governance Report
 
 Pursuant to Clause 49 of the listing agreement, a detailed report on
 Corporate Governance is given in Annexure - III along with the
 Auditors Certificate on its compliance, which forms part of this
 report.
 
 Auditors
 
 The Companys Auditors, MGM and Company, Chartered Accountants
 (Registration Number 117963W) hold office upto the conclusion of the
 ensuing Annual General Meeting.The Company has received the requisite
 Certificate from them pursuant to section 224(1B) of the Companies Act,
 1956 confirming their eligibility for re- appointment as Auditors of
 the Company.
 
 Particulars of Employees
 
 Information as required under Section 217(2A) of the Companies Act,
 1956 and the Rules framed there under is attached as Annexure I.
 
 Acknowledgement
 
 The Board of Directors takes this opportunity to express their
 appreciation for the assistance and co-operation received from Banks,
 Government Authorities, Customers, Suppliers, Members, Collaborators
 and other Business Associates.
 
 The Board also acknowledges the understanding and support shown by all
 its employees.
 
                            For and on behalf of the Board of Directors
 
                                            Dinesh Munot
                                     Chairman & Managing Director
 
 Pune
 May 26, 2011