TUBE INVESTMENTS Chairmans Speech

Dear Shareholders,

TI faced challenging business conditions in 2015-16 as the business
environment was quite volatile. Monsoon played truant in several parts
of India, disturbing in the process consumer demand and consumption
behaviour. Across the globe, most major economies had their own
difficulties to grapple with and overcome.

On the national scene, as expectations kept mounting all the time, in a
first of several positives, inflation was under check supported largely
by international prices of oil remaining low. Industrial production
gained momentum gradually. Services sector had a robust growth.
Infrastructure development received enhanced focus with many regulatory
reform measures piloted by the Government. The year has ended in an
impressive five-year high economic growth of 7.6%.

Against this backdrop,TI''''s operational performance improved by 4%
during 2015-16, with the turnover growing to Rs.3790 Cr. from Rs.3646
Cr. This was achieved despite a reduction in end customer prices
consequent to a drop in raw material prices. We at TI, put our existing
capabilities and capacities to optimal and efficient use and as
required for the future, selectively created new capacities.

It gives me great pleasure in this context to share with you that TI
Cycles of India (TICI), TI''''s Bicycle Division commenced production at
its new plant in Rajpura, Punjab in early June, 2016. Built at a cost
of Rs.105 Cr., the Rajpura plant has the capacity to produce 30 lakh
bicycles per annum. The new plant will cater to demand in specific
bicycle segments in the northern and eastern markets of the country.
Further, towards renewal of its focus on exports, TICI has scaled up
its existing Ambattur unit to manufacture an additional 30000 high end
bicycles per month.

The foray of Tube Products of India (TPI), the Tubes Division of TI
into large diameter tubes for the non-auto sector through establishment
of a green field plant at Tiruttani is progressing well. The plant is
stabilising fast and production volumes are improving consistently. TPI
has put to good advantage its capabilities in growing the precision
steel tubes and cold rolled steel strips businesses.

TI Tsubamex Private Limited (TTPL), TI''''s joint venture with Tsubamex Co
Ltd, Japan for die design and manufacture, is all set for commercial
production at its Oragadam facility near Chennai. TTPL has generated
tremendous response from major automakers in India, which is reflected
in its very healthy order book. Operating in a niche,
import-substitution area, TTPL holds out a lot of promise for a bright
future.

The financial services businesses in which TI has invested
substantially, performed very well in 2015-16. Both Cholamandalam MS
General Insurance (Chola MS) and Cholamandalam Investment & Finance
(Chola Investment) recorded good growth in all round performance over
the previous year.

With IRDA (Insurance Regulatory and Development Authority) approval, TI
facilitated Mitsui Sumitomo

Insurance, Japan (MS), TI''''s joint venture partner in Chola MS to
increase its shareholding in Chola MS from 26% to 40%. This was made
possible through divestment of a part of TI''''s shareholding in Chola MS.
The valuation per share for the divestment was one of the best ever
secured for similar divestment in the Indian insurance industry. This
reflects the strong fundamentals of the insurance subsidiary of TI,
built on and nurtured through appropriate and timely infusion of share
capital by TI and MS from time to time. Its fine performance
year-after-year since it was incorporated about a decade and a half
back indicates the subsidiary''''s future potential which is, I wish to
share with you, in no small measure due to the untiring efforts of its
dedicated band of management team and employees. We appreciate their
contribution and are thankful to them for their efforts.

Chola Investment posted another year of strong performance with a 32%
growth in profit before taxation and 17% growth in assets under
management (AuM).

Equipped with a healthy order book, Shanthi Gears, TI''''s gear making
subsidiary is intensifying its efforts in enhancing its market presence
and winning new customers. It is actively gaining an entry into the
defense segment and other high- end applications of gears and gearing
systems.

For Sedis SAS, TI''''s subsidiary in France, it was another year of fat
growth in line with adverse economic situation in Europe. With a strong
footprint in the French domestic market, Sedis is hopeful of improving
its performance in the future.

Directors

The members of the Board are a great source of strength through their
active support and encouragement to the Company''''s management team and
to me personally. I deeply value their wisdom and counsel and thank
them for their involvement, commitment and participation.

Human Resources

We have always valued our human resources as one of our greatest
sources of strength. Our employees have stood by us shoulder to
shoulder unwaveringly all through the years, participating
whole-heartedly and enthusiastically in the pursuit of TI''''s business
goals. Mr. L Ramkumar, Managing Director and the Management Committee
have steered this resourceful and dedicated team of employees very
competently. I thank the entire team for all their good work. I wish
them greater success in the years to come.

Finally, I take this opportunity to express my gratitude to all of you,
dear shareholders for your continued support and confdence in the
Company.

Yours sincerely,

M M Murugappan

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