TO THE SHAREHOLDERS
The Directors have pleasure in presenting the 59th annual report and the auditedfinancial statements for the year ended 31st March 2021.
1. FINANCIAL HIGHLIGHTS
| || ||(Rs in Cr) |
|Particulars ||Year ended 31.03.2021 ||Year ended 31.03.2020 |
|Revenue from Operations ||1176.91 ||1324.34 |
|Other Income ||111.17 ||99.80 |
|Profit / loss before Depreciation || || |
|Finance Costs Exceptional items || || |
|and Tax Expense ||261.62 ||237.62 |
|Less: Depreciation / Amortization / || || |
|Impairment ||(77.90) ||(92.65) |
|Profit / loss before Finance Costs || || |
|Exceptional items and Tax Expense ||183.72 ||144.97 |
|Less: Finance Costs ||(47.62) ||(55.40) |
|Profit / loss before Exceptional items || || |
|and Tax Expense ||136.10 ||89.57 |
|Add / (less): Exceptional items ||(13.00) ||(20.40) |
|Profit / loss before Tax Expense ||123.10 ||69.17 |
|Less: Tax Expense (Current & Deferred) ||(47.26) ||0.47 |
|Profit / loss for the year ||75.84 ||68.70 |
|Comprehensive Income / loss ||98.20 ||(90.31) |
|Total comprehensive Income / loss ||174.04 ||(21.61) |
|Dividend on Equity Shares ||52.61 ||62.72 |
The Board of Directors of the Company (the Board) at their meeting held on 29th January2021 declared a first interim dividend of Rs 15/- per share (300%) for the year 2020-21absorbing a sum of Rs 30.35 Cr. The same was paid on 12th February 2021.
The Board at its meeting held on 24th March 2021 declared a second interim dividend ofRs 11/- per share (220%) for the year 2020-21 absorbing a sum of Rs 22.26 Cr. The same waspaid on 9th April 2021.
Thus the total amount of both dividends for the year ended 31st March 2021 aggregatedto Rs 26/- per share (520%) on 20232085 equity shares of Rs 5/- each absorbing Rs 52.61Cr. From 1st April 2020 the dividend income earned by the shareholders will be taxable intheir hands at the rates applicable to them.
The Board does not recommend any further dividend for the year under consideration. Thedividend pay-out is in accordance with the Company's Dividend Distribution Policy.
The Board is not considering any transfer to General Reserves for the year underreview as it is not mandatorily required.
Global economic growth contracted by 3.5% in 2020 against a growth of 2.8% in 2019.
Indian Economy demonstrated resilience in face of unprecedented pain in fiscal 2021.
The Indian economy demonstrated resilience posting gains in H2 after a trying H1supported by a multitude of Government policy interventions in the year gone by. 2020-21began with the nationwide 42 day lockdowna critical response to what we now commonlyrefer to as the first wave of CoVID-19. This led to a GDP contraction of 23% in the firstquarter. However recovery in Quarter 2 was ahead of the estimates with a 7% GDP declineinstead of the estimated 11% decline. The Q3 & Q4 saw the GDP return to positiveterritory posting gains of 0.5% and 1.6% bringing the full year to a 7.5% decline.
US economy: The US recorded GDP of 3.4% in 2020 (2.3% in 2019). After the economicimpact of CoVID-19 a large-scale emergency support of Rs 2.2 trillion was provided. Thispowered a rebound in a broad range of indicators like housing markets consumer spendingand trade starting in mid-2020.
EU economy: The EU economy ended 2020 in the grip of a recession with GDP contractionof a record 7.8% from a growth of 1.3% in 2019. The relaxation of restrictions followingthe March-April lockdown - imposed in response to the CoVID-19 pandemic - were largelyreversed during the last quarter of 2020 in order to contain a second wave of infections.
Strong Results in a challenging environment.
The year 2020-21 was a challenging one in the history of the organization. The yearstarted with a country-wide lockdown due to the CoVID-19 pandemic and the Company had nosales whatsoever in April 2020. Post opening up of the economy and easing ofrestrictions the Company witnessed a very sharp recovery in demand first in the exportsmarket and subsequently in the domestic market. The Company successfully managed to meetcustomer requirements as well as build up depleted inventories in the export pipeline witha focused approach of "Just-in-time supplies". The Company also ensuredsystematic Company-wide initiatives to control costs prioritize capex improveproductivity and above all improve health of cash flows. This ensured that the Company wasable to manage the VUCA (Volatile Uncertain Complex and Ambiguous) environment beingfaced by it and its customers alike. Thus the Company posted strong financials in theface of exceptional and unprecedented uncertainty.
The Company has always recognized that social responsibility was an integral andcritical part of its value system. The response to CoVID-19 therefore needed to bewidespread and collective. With this principle in focus the Company and its CSR arm theSrinivasan Services Trust undertook the following initiatives:
10 Lakh masks 1.5 Lakh gloves were handed to Government agencies.
12.5 Lakh Food Packets were distributed.
30000 man-hours of community service.
4122 villages covered with sanitization drives across states.
Donated Disinfectant Mist Spray Cannon mounted truck to the Corporation ofChennai.
Towards the employees & their families:
Crisis Management task force deployed to ensure Business Continuity Plans.
Employees were seamlessly migrated to work from home with no loss ofproductivity.
SCL Health Centre has been operating 24/7.
Employees & families provided sensitization about safe practices at home.
Best Practice SOPs designed and deployed for resumption of operations.
The following table highlights the performance of the Company during FY 2020-21:
|Particulars ||FY 2020-21 ||FY 2019-20 ||Variance (in %) |
|Sales (Tonnage) ||32649 ||35837 ||(8.8) |
|Sale of goods (Rs in Cr) ||1113.32 ||1240.28 ||(10.2) |
|Domestic sales (Rs in Cr) ||607.62 ||652.97 ||(6.9) |
|Export sales (Rs in Cr) ||505.70 ||587.31 ||(13.8) |
|Profit before Tax (Rs in Cr) ||123.10 ||69.17 ||77.9 |
4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
I. INDUSTRY STRUCTURE AND DEVELOPMENT:
The segment wise performance in the Indian automotive industry is given in thefollowing table.
|Category ||FY 2020-21 ||FY 2019-20 ||Variance (in %) |
|Two Wheelers ||18397111 ||20935837 ||(12.1) |
|Passenger Vehicles ||3115857 ||3435637 ||(9.3) |
|Commercial Vehicles (M&HCV) ||195068 ||267250 ||(27.0) |
(Source: SIAM+DICV internal estimate)
FY 2020-21 has been one of the toughest years in the history of the Indian automobileindustry with the outbreak of the CoVID-19 pandemic. The industry which was alreadyfacing headwinds of a slowing economy was brought to a standstill with the nationwidecomplete lockdown from end March 2020 & April 2020.
From Q2 onwards as Government restrictions eased production gained pace and supplychains were gradually restored. From Q3 the industry witnessed a turnaround as its salesvolumes started gaining momentum owing to the restoration of the pent-up demand andfestive season. The shift to personal mobility and low interest rate regime combined withgood monsoon bumper crop output and Government stimulus also provided much-needed supportto drive the domestic automobile industry.
The industry also faced a few impediments on its path to recovery like shortages insemi-conductors shortages of containers and high freight charges which affected thetransportation of components during Q3 & Q4 FY 2020-21.
The following table highlights the North American and European truck registrationfigures in vehicle units: (in Nos)
|Market ||Category ||FY 2020-21 ||FY 2019-20 ||Variance (in %) |
|North America ||Class 8 Trucks ||239287 ||318800 ||(24.9) |
|North America ||Class 4-7 Trucks ||245268 ||278606 ||(12.0) |
|Europe ||Heavy trucks (>16T) ||222832 ||289351 ||(23.0) |
(Source: FTR & ACEA )
North America: In Q1 FY 20-21 as economic conditions worsened due to the CoVID-19fleets pulled back on buying and order cancellations spiked. By Q2 the truck freightrebounded and the supply chain ramped up after extended shutdowns. As suppliers came backonline factory productivity increased and OEM build rates were running higher thanexpected. The markets saw a strong recovery during H2 2021 with good order bookinggenerated. But the factory outputs were scaled back slightly due to significant componentshortages and port congestions.
Europe: In the EU markets despite positive results during the last few months of theyear the heavy commercial vehicle category ended the year in negative territory.Double-digit drops were recorded by all EU markets in 2020 including the four major ones.France Germany and Spain all posted percentage declines of over 20% although thecontraction was more modest in Italy (14)%.
II. BUSINESS OUTLOOK AND OVERVIEW
The RBI's Monetary Policy Committee has projected the GDP growth at 10.5% in FY 2021-22given the low level of activity last year.
The Government has been working on a series of calibrated reforms including FDIpolicy Production Linked Incentive (PLI) scheme investment facilitation and ease ofdoing business reaffirming a recovery path.
The second wave of CoVID-19 infections presents a risk to India's growth forecast asthe re-imposition of measures to curb the spread of the virus will hit economic activitybut expected importance and fillip will be given to economic activity by the policy makersand regulators. The measured approach followed so far and the recent announcements ofvaccination drive across the country will be of great benefit to the industry. Directorsare optimistic about the future but are concerned about the evolving CoVID-19 scenarioacross the country.
Global growth is projected at 6% in 2021 reflecting expectations of a vaccine-poweredrecovery in the second half of 2021 additional fiscal support in a few large economiesand continued adaptation of economic activity to subdued mobility. But renewed waves andnew variants of the virus do pose concerns for the outlook.
The US economy is poised to make some impressive gains in the short term driven by thestimulus checks advances in vaccine distribution and relaxing restrictions. The US GDPis expected to grow by 6.5% in 2021. The US truck market (Class 8) volumes are expected togrow by 30% in 2021.
In EU a return to pre-pandemic economic activity levels is expected to occur by end2021 or early 2022 assuming that the rollout of CoVID-19 vaccination continues toaccelerate across the region. The EU GDP is expected to grow by 3.6%. The EU commercialvehicles demand (M&HCV segment) in 2021 is expected to grow by 12%.
III. OPPORTUNITIES & THREATS
The Company supplies aluminium castings for commercial vehicles passenger cars and twowheeler segments of the automotive industry.
The revenue of the Company is derived from Medium & Heavy Commercial Vehicles(MHCV) (61%) followed by two wheeler industry (23%) and the car industry (16%).
In the short to medium term on account of a low base all auto segments are expectedto come back to strong double-digit growth. Increase in industrial activity need forpersonal mobility improved availability of funds will drive the growth of the domesticauto industry.
In the long term in lieu of stringent emission norms fuel economy regulations andadoption of alternate drivetrain technologies the thrust towards light-weighting is boundto increase leading to higher content of aluminium in all vehicle types. The Company iswell placed to leverage these emerging market opportunities. This will enable the Companyto fast-track growth since the Company is already a preferred source for aluminiumcastings to major OEM's in India and abroad.
The supply chain disruptions caused by the pandemic could have major OEMs review theirglobal purchasing strategies and this could result in a strong push for localization tode-risk the supply chain despite cost impact.
Several Indian die casting companies and OEMs have set up new capacities or expandedexisting capacities over the past few years. With current market conditions the capacityutilization is expected to improve in FY22. However the challenge due to recent secondwave of CoVID-19 is expected to have some adverse impact especially in the domesticautomotive industry. We expect pressure on asset utilization to continue and willtherefore be active in pursuing new business opportunities to ensure better utilization ofassets in view of increased competition and cost pressure.
Intense competition makes it extremely difficult to seek price increases to compensatethe effects of inflation bringing the margins under severe pressure. However theCompany's supply contracts provide for periodic price adjustments indexed to theinternational prices of aluminium and this should offer some protection against volatilityof commodity prices.
IV. RISKS AND CONCERNS
There are possible risks on the horizon both global and domestic. In India the strongeconomic recovery could be hampered by the emergence of new variants of the virus. Theeffects of any significant economic disruption will have a cascading effect through bothdemand and supply channels. If supply chains get hit and inflation starts risingpurchasing power and demand may be constricted.
Globally a new wave of CoVID-19 infections the possible re-imposition of lockdowns tocontain the virus and diminishing policy support threaten to undermine growth. Scarcityin the labour market may be far more persistent than anticipated slowing re-employment.Participation rates may also remain low. The rebound in consumer spending could be bothdelayed and softer. Overall the transition out of the pandemic may be slower and morepainful than foreseen. This could weaken the outlook for overseas business.
The Indian commercial vehicle industry is a strong indicator of the economic activityin the country and has a strong correlation with agricultural growth infrastructuredevelopment and the mining industry. The expected increase in industrial activity steadyagricultural output and the Government's focus on road infrastructure will drive thedemand. But disruptions like semiconductor shortages port congestions highertransportation cost hiked raw material prices and fresh localised lockdowns couldconstrain the supply.
The global automotive industry will witness double-digit growth in 2021 but it mightnot be enough to make up for the slump caused by the pandemic. Also the shift away fromfossil fuel vehicles in favour of low / zero emission vehicles will take centre stage andOEMs will reposition themselves to take advantage of the changing scenario.
Aluminium prices climbed to the highest level in two years to average Rs 2019 pertonne in December 2020 after hitting bottom at Rs 1456 per tonne in April 2020 due tostrong demand from China and falling stocks levels at the London Metal Exchange (LME).However going forward even if demand from China moderates to some extent other marketsare likely to open up like Europe US and India which will support demand for Aluminiumand could keep prices elevated.
With significant exports and import of raw materials and capital goods the Company isalways exposed to the impact on account of currency fluctuations. However the Company hasa well-defined forex hedging and management policy to mitigate the risks.
The stipulation and requirements of the automobile industry demands high qualityproducts. Robust quality management systems meeting international standards like IATF16949 are in place to ensure excellent product quality. Additionally the Company has alsotaken appropriate recall and product liability insurance in line with standard industrypractice.
Just-in-time delivery is another important contractual obligation. Robust quality andproject management systems are in place to avoid delay in deliveries due to quality issuesor project implementation.
The Company adds capacity in existing and new locations to meet the projected demandof customers. The Company closely monitors the progress of customer projects / volumes andappropriately deploys the assets to protect from both underutilization and capacityshortages to meet the demand.
Risk Management Policy
The Board has established a Risk Management Policy which formalizes the Company'sapproach to overview and manage material business risks. The policy is implemented througha top down and bottom up approach for identifying assessing monitoring and managing keyrisks across the Company's business units.
Risks and effectiveness of their management are internally reviewed and reportedregularly to the Board. The Management has reported to the Board that the Company's riskmanagement and internal compliance and control system is operating efficiently andeffectively in all material respects.
The Board is satisfied that there are adequate systems and procedures in place toidentify assess monitor and manage risks. The Audit Committee also reviews reports bymembers of the management team and recommends suitable action. Risk Mitigation Policy hasbeen approved by the Board.
V. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has a proper and adequate internal control system to ensure that all theassets of the Company are safeguarded and protected against any loss and that all thetransactions are properly authorized and recorded. Information provided to management isreliable and timely and statutory obligations are adhered to.
The Company has an established Internal Financial Control framework including internalcontrols over financial reporting operating controls and anti-fraud framework. Theframework is reviewed regularly by the management and tested by internal audit team andpresented to the audit committee. Based on periodical testing the framework isstrengthened from time to time to ensure adequacy and effectiveness of InternalFinancial Controls.
VI. OPERATIONS REVIEW
The Company has been using Total Quality Management (TQM) as the foundation of itsmanagement. The Company implemented the best practices like Total Productivity Management(TPM) and Lean Manufacturing (TPS) in its manufacturing facilities. During FY21 theCompany has commenced working with mentors to continue to improve its systems andprocesses. Significant aspect of the same is to synchronize the Company's operations withcustomer demand. This will bring in a better planning and execution system along withcontrol over inventories in the pipeline. It also has in place best-in-class practices forsafety pollution control and work environment water and energy conservation.
Continuous improvement projects are implemented to improve the product quality andoperational efficiency in all the manufacturing locations. Re-energizing TPM practiceshelped in improving the equipment reliability and consequently plant OEE. The Company hasalso initiated various projects towards deploying Industry 4.0 practices through connectedmachines. This will be scaled up in the coming years and is expected to bring significantgains in operational efficiencies across manufacturing locations. The Company's journey ofachieving manufacturing excellence was recognized and rewarded by the following customersduring FY 2020-21.
Cummins - CoVID-19 Outstanding supplier award.
TVS Motor - Platinum award for Delivery and BMW quality.
Volvo - Appreciation for efforts extended by the Company in pandemic situation.
TATA Motors - Appreciation for augmenting capacity and support in meetingdelivery requirements.
Cummins domestic Hyundai Motor WABCO - meeting delivery requirements.
DAF - Recognized the Company in "Leaders category". The Company is oneamong 17 suppliers globally to be selected for this recognition.
Achieving customer delight by consistently providing products of excellent quality isthe prime motto of the Company. This is achieved through state-of-art technologytraining effective quality system continuous improvement and total employee involvement.Poka-yokes process audits use of statistical tools for process optimization and onlineprocess controls also contribute towards improving and achieving consistency in productquality. The quality system is certified for IATF 16949 requirements.
TQM is a way of life in the Company. 100% employee involvement has been successfullyachieved for many years.
Employees have completed 263 projects by applying statistical tools through QualityControl Circles (QCC) in 2020-21. The average number of suggestions implemented peremployee was 13.
C. Cost Management
Cost management is a continuous journey and the Company manages the same throughrigorous deployment monitoring and control of costs across all departments. Crossfunctional teams are working on projects focussed on Value Added / Value Engineering(VA/VE) and improving operational efficiency. TPM and Lean initiatives are deployedCompany-wide to achieve reduction in manufacturing cost. Given the cost pressures due tothe pandemic significant cross functional team working ensured mutual cross learning andfast horizontal deployment of ideas / projects across the Company's manufacturinglocations.
D. Information Technology
The Company uses ERP system that integrates all business processes across the Company.Suppliers and customers are also integrated into the system for better planning andexecution. During the year IT road map for organization was laid out with special focuson deploying Industry 4.0 projects were initiated in manufacturing and quality. As we movemore towards digitalization of the Company's processes and systems special focus is beinggiven to enhance the Information Security of the Company's networks with a specialemphasis on cyber security aspects.
VII. KEY FINANCIAL RATIOS
As required under Regulation 34 of the Listing Regulations details of changes in someof the ratios as compared to the previous year are given below:
|Particulars ||Unit of ||Standalone ||Consolidated |
| ||measurement ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Interest Coverage Ratio ||Times ||3.59 ||2.25 ||1.92 ||1.93 |
|Net Profit Margin ||% ||9.56 ||4.86 ||4.20 ||4.24 |
|Return on Net Worth ||% ||11.58 ||10.79 ||7.49 ||8.56 |
The ratios for standalone financials have improved in the current year predominantlydue to higher profits driven by better operational performance and reduction inborrowings.
VIII. ISSUE OF NON-CONVERTIBLE DEBENTURES
During the month of April 2020 the Board approved the issue of rated unsecuredredeemable non-convertible debentures (NCD) for a sum of Rs 100 Cr (Rupees One HundredCrores Only). The Company had allotted on 18th August 2020 1000 NCDs of face value of Rs10 Lakhs each aggregating to Rs 100 Cr at the rate of 7.65% p.a. NCDs will be redeemed inequal installments at the end of 4th year and 5th year. The NCDs were listed with NationalStock Exchange of India Limited (NSE) on 25th August 2020.
IX. HUMAN RESOURCE DEVELOPMENT
The Company considers employees as vital and most valuable assets. Human ResourceDevelopment (HRD) is aligned to business needs to enhance business performance andresults. HRD is practiced through an overall HRD framework with its constituents asresourcing employee engagement performance & compensation management competencybased development career & succession planning and organization development. Each ofthese constituents have a structured approach and the process to deliver.
As a part of the long term strategy of the Company collaborative education programshave been initiated with three reputed institutes to develop role-ready engineers withCompany-specific knowledge at the entry level. The Company also revamped and launched theyellow belt and green belt programs during the year along with various other systemsoriented training programs. This is expected to not only help solve chronic problems facedon the shop floor but also help in building the competency of the Company's engineers instructured problem solving.
Career development workshops are conducted to identify high potential employees. Suchemployees are groomed for taking up higher responsibilities. A reward and recognitionsystem is in place to motivate and also provide fast track growth for high potentialemployees.
The Company's engineers and executives are sponsored for advanced study programmesoffered by both Indian and foreign institutions. Customized technical and leadershipcompetency improvement programs are developed and delivered through reputed institutions.
The Company continuously measures and reports employee engagement every year andidentifies areas to work on where improvement is required.
An excellent industrial relations environment continues to prevail at all themanufacturing units of the Company.
As on 31st March 2021 the Company had around 1625 employees on its rolls.
X. ENVIRONMENT HEALTH & SAFETY
The Company is fully committed to the ultimate goal of employee safety. Safetymanagement is integrated with the overall Environment Health and Safety (EHS).
The Company has been certified under Integrated Management System (IMS) combining ISO14001 and OHSAS 18001 systems and procedures. The Company has initiated actions to migrateto ISO45001 system in FY22.
XI. CAUTIONARY STATEMENT
Statements in the Management Discussion and Analysis Report describing the Company'sobjectives projections estimates and expectations may be "forward lookingstatements" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatcould make a difference to the Company's operations include amongst others economicconditions affecting demand / supply and price conditions in the domestic and overseasmarket in which the Company operates changes in the Government Regulations Tax Laws andOther Statutes the ongoing uncertainty of CoVID-19 led lockdowns and Incidental Factors.
5. DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 (theAct 2013) with respect to Directors' Responsibility Statement it is hereby stated that:i. in the preparation of annual accounts for the financial year ended 31st March 2021 theapplicable Accounting Standards had been followed along with proper explanation relatingto material departures;
ii. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent. This was done so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year as well as the profit of the Company for the year under review;
iii. the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. the Directors have prepared the accounts for the financial year ended 31st March2021 on a "going concern basis";
v. the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
vi. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
6. CORPORATE SOCIAL RESPONSIBILITY (CSR)
CSR activities have already been textured into the Company's value system throughSrinivasan Services Trust (SST) established in 1996 with the vision of buildingself-reliant rural communities.
Over 25 years of service SST has played a pivotal role in changing lives of people inrural India by creating self-reliant communities that are models of sustainabledevelopment.
The Company is eligible to spend on their ongoing projects / programmes falling withinthe CSR activities specified under the Act 2013 as mandated by the Ministry of CorporateAffairs for carrying out CSR activities.
The Committee formulated and recommended a Corporate Social Responsibility policy interms of Section 135 of the Act 2013 along with a list of projects / programmes to beundertaken for CSR spending in accordance with the Companies (Corporate SocialResponsibility Policy) Rules 2014.
Based on the recommendation of the CSR Committee the Board has approved the projects /programs to be carried out as CSR activities by SST by undertaking these programmes /projects in compliance with the CSR policy of the Company and contributed Rs 5 lakhs forthe financial year 2020-21 towards CSR spending.
Presently SST is working in thousands of villages spread across Tamil Nadu KarnatakaMaharashtra Himachal Pradesh and Andhra Pradesh covering a population of about 6.24 lakhfamilies totalling 24.50 lakhs people. SST has focussed on the areas of economicdevelopment health care education environment social and infrastructure actively in3000 villages. SST will focus on 2000 more villages so that all these areas are coveredin the next 3 years.
It may also be noted that the CSR Committee has approved the projects or programmes tobe undertaken by the SST for the year 2021-22 preferably in local areas. The manner ofexecution modalities of utilisation of funds implementation schedules and the monitoringand reporting mechanism for these projects or programmes are monitored by the CSRCommittee as required under the Companies Amendment Act 2020.
The Company has also ensured that none of the projects undertaken through SST requiresimpact assessment as these projects are within the threshold limit of Rs 1 Cr.
As required under Section 135 of the Act 2013 read with Rule 8 of the Companies(Corporate Social Responsibility Policy) Rules 2014 the annual Report on CSR containingthe particulars of the projects / programmes approved and recommended by CSR Committee andapproved by the Board for the financial year 2020-21 are given by way of Annexure IVattached to this Report.
7. FINANCIAL PERFORMANCE & POSITION OF SUBSIDIARIES & ASSOCIATES
The following companies and bodies corporate are the subsidiaries / associates of theCompany:
1. TVS Motor Company Limited Chennai;
2. Sundaram Auto Components Limited Chennai
3. TVS Housing Limited Chennai 18
4. TVS Motor Services Limited Chennai
5. TVS Credit Services Limited Chennai
6. TVS Two-wheeler Mall Private Limited Chennai
7. TVS Micro Finance Private Limited Chennai
8. Harita ARC Private Limited Chennai
9. Harita Collection Services Private Limited Chennai 10. TVS Commodity FinancialSolutions Private Limited Chennai 11. TVS Housing Finance Private Limited Chennai 12.Intellicar Telematics Private Limited Bengaluru 13. Sundaram-Clayton (USA) Limited USA;14. TVS Motor Company (Europe) B.V. Amsterdam Netherlands; 15. TVS Motor (Singapore)Pte. Limited Singapore; 16. The Norton Motorcycle Co Limited UK
17. PT TVS Motor Company Indonesia Jakarta; 18. Sundaram Holding USA Inc DelawareUSA; 19. Green Hills Land Holding LLC South Carolina USA;
20. Components Equipment Leasing LLC South Carolina USA; 21. Sundaram-Clayton (USA)LLC South Carolina USA; and 22. Premier Land Holding LLC South Carolina USA.
1. Emerald Haven Realty Limited Chennai and its subsidiaries;
2. TVS Training and Services Limited Chennai;
3. Sundram Non-Conventional Energy Systems Limited Chennai; and
4. Tagbox Solutions Private Limited Bengaluru
Associate of TVS Motor (Singapore) Pte Ltd
1. Tagbox Pte Limited Singapore
SUBSIDIARIES / ASSOCIATES
TVS Motor Company Limited (TVSM)
TVSM is engaged in the business of manufacture of two and three wheelers. During theyear 2020-21 TVSM's total revenue including other income was Rs 16783.51 Cr and earned aprofit after tax of
Rs 612.04 Cr.
TVSM for the year 2020-21 declared first interim dividend of Rs 2.10 per share (210%)absorbing a sum of Rs 99.77 Cr and a second interim dividend of Rs 1.40 per share (140%)absorbing a sum of Rs 66.51 Cr. Hence the total amount of dividend for the year ended31st March 2021 aggregated to Rs 3.50 per share (350%) on 475087114 equity shares of Rs1 each.
Sundaram Auto Components Limited (SACL)
Total income of SACL were Rs 463 Cr in the current year as against
Rs 530 Cr in the previous year 2019-20.
SACL incurred a loss of Rs 19.08 Cr including an exceptional item of
Rs 9.36 Cr during the year 2020-21 as against PBT of Rs 6.44 Cr in the previous year.
TVS Housing Limited (TVSH)
TVS Housing Limited is a 100% subsidiary of TVS Motor Company Limited.
TVS Motor Services Limited (TVS MS)
TVS MS was initially the investment SPV of TVS Motor Company Limited (TVSM) forfunding TVS Credit Services Limited (TVS CS).
Pursuant to order of the National Company Law Tribunal Chennai (NCLT) TVS MStransferred its investments in equity shares of TVS CS in the previous year to TVSM forthe redemption of its preference shares held by TVSM. TVS MS continues to be a 100%subsidiary of TVSM.
TVS Credit Services Limited (TVS CS)
TVS CS is the retail finance arm of TVSM for financing of two wheelers. During the year2020-21 TVS CS's overall disbursements registered at
Rs 8627 Cr as compared to Rs 7628 Cr in the previous year registering growth of 13%.During the year under review the assets under management are around Rs 11200 Cr asagainst Rs 9215 Cr during the previous year registering a growth of 21%. Total incomeduring the financial year FY 2021 increased to Rs 2241 Cr from Rs 2000 Cr during thefinancial year registering a growth of 11.6% over the previous year.
The profit before tax and extraordinary items for the year stood at
Rs 105 Cr as against Rs 218 Cr during the previous year and reduction is due to loss ofbusiness during first quarter of the year increase in investment on recovery relatedinitiatives and higher level of CoVID-19 related provisions.
The following companies are the subsidiaries of TVS CS.
1. TVS Two wheeler Mall Private Limited
2. TVS Micro Finance Private Limited
3. Harita ARC Private Limited
4. Harita Collection Services Private Limited
5. TVS Commodity Financial Solutions Private Limited
6. TVS Housing Finance Private Limited
All the above subsidiaries are yet to commence their operations.
Intellicar Telematics Private Limited (Intellicar)
During the financial year effective 31st December 2020 TVSM acquired the entire equityshares of Intellicar Telematics Private Limited (Intellicar) a start-up company andthereby it has become a wholly owned subsidiary of TVSM. Intellicar provides advancedfleet management solutions through an integrated platform powered by IoT technologiescoupled with strong analytics and data management capabilities. It will help acceleratethe ongoing digital initiative of TVSM that are targeted at delivering enhanced customerexperience.
Total income of Intellicar was at Rs 7.88 Cr in the current year as against
Rs 16.11 Cr in the previous year 2019-20. Intellicar incurred a loss of
Rs 4.83 Cr in the year 2020-21 as against loss of Rs 0.93 Cr in the previous year2019-20.
Sundaram-Clayton (USA) Limited
Sundaram-Clayton (USA) Limited a wholly owned subsidiary of the Company is engaged inthe business of providing Professional Employer Organisation ("PEO") services tothe employees of the Company. The Company earned revenue of USD 6632 and net income afteradjustment of expenses amounted to USD 255 for the year ended 31st March 2021.
Sundaram Holding USA Inc. (SHUI) & its subsidiaries
Sundaram Holding USA Inc. (SHUI) a company established under the applicable provisionsof Laws of The United States of America is owned by Sundaram Auto Components Ltd (SACL)(wholly owned subsidiary of TVSM) and the Company.
SHUI's wholly owned subsidiaries are:
1. Green Hills Land Holding LLC South Carolina USA
2. Component Equipment Leasing LLC South Carolina USA
3. Sundaram-Clayton USA LLC South Carolina USA
4. Premier Land Holding LLC South Carolina USA
During the year 2020-21 SACL and the Company have invested a sum of USD 3 Mn and USD7.4 Mn in the ordinary shares of SHUI and holds 68% and 32% respectively of the totalcapital of SHUI as on 31st March 2021.
Post CoVID-19 and with the US economy recovering SHUI is preparing production andsupply chain activities and is likely to commence the commercial production by first halfof 2021-22.
PT. TVS Motor Company Indonesia (PT TVSM)
The Indonesian two wheeler Industry declined by 30% during the year 2020-21 at around3.2 million units.
During the year under review PT TVS achieved sales in three wheelers of 4420 units asagainst 7806 units of sales during the previous year. And 58901 nos. of two wheelers asagainst 53641 nos. of last year thereby registering a growth of 10%.
The growth in sales numbers coupled with margin improvement enabled PT TVS to achievea positive EBITDA of USD 3 million for the full year as against a USD 0.50 million of lastyear. It is also worthwhile to note that PT TVS achieved break even by posting operatingprofit for the financial year 2020-21.
TVS Motor Company (Europe) B.V
TVSM had earlier incorporated TVS Motor Company (Europe) B.V. with a view to serve asspecial purpose vehicle for making and protecting the investments made in overseasoperations of PT TVS.
TVS Motor (Singapore) Pte. Ltd
TVS Motor (Singapore) Pte Limited a wholly owned subsidiary of TVSM is beingleveraged to operationalize a digital technology organization focused on delivering highquality digital solutions that address real life business challenges by harnessing thepower of Analytics Artificial Intelligence Augmented Reality Machine Learning andInternet of Things. The solutions and offerings are focused in the areas of automotive andfintech industries that have direct relevance to the Company and its subsidiaries.
TVS Motor (Singapore) Pte Limited had made investments aggregating USD 19.52 Mn inAltizon Inc (USA) in the area of Digital Manufacturing focused on Digitizing LegacyFactories Predictronics Corporation (USA) in the area of Digital Manufacturing focused onPredictive Maintenance Scienaptic (USA) in the area of Credit Services focused on Credit
Decisioning Underwriting and Collections and in Tagbox (Singapore) in the area ofFleet Management focused on Granular Asset Tracking.
Despite the severe negative impact on businesses across the globe due to CoVID-19 TVSMinvested entities have performed very well with Predictronics Scienaptic and Tagboxregistering double digit revenue growth with improved operational metrices compared to theprevious financial year. Thanks to the growth in digital technologies driven by CoVID-19it is expected that the invested start-ups will deliver material growth in FY 2021-22 withsolid financial and operational results while continuing to add value to the ongoingdigital transformation initiatives in the group companies.
The Norton Motorcycle Co Limited UK (formerly known as Project 303 Bidco Limited)
In April 2020 The Norton Motorcycle Co. Limited UK (Norton) (formerly known as Project303 Bidco Limited) a wholly owned subsidiary of TVS Motor (Singapore) Pte Limitedconcluded an asset purchase transaction which included the brand "Norton" andother associated brands trademarks and certain other assets from Norton MotorcycleHoldings Limited (in administration) & Norton Motorcycles UK Limited (inadministration).
Post-acquisition a new state-of-the art facility is being created in Solar ParkSolihull near Coventry. The facility will focus on producing high end premium motorcycles.During FY 2020-21 Norton focussed on building new brand vision and strategy enhancingthe organisation strength establishing supply chain network product readiness with highquality standards planning product and marketing strategy for future.
Production and sales from new facility will commence during the first half of FY2021-22.
Norton will continue to invest in development of new premium motorcycles R&D anddeveloping the dealer network across the globe.
Emerald Haven Realty Limited (EHRL)
Chennai residential real estate market was severely impacted by CoVID-19 due tolockdown restrictions imposed job losses pay cuts and postponement of purchase decisionby customers impacting enquiries and absorption.
In H1 FY21 absorption fell sharply and no new projects were launched by major playersleading to an increase in inventory overhang. Construction activities at the project siteswere also impacted due to lockdown restrictions non-availability of migrant workforce andraw material supply constraints.
In line with the overall industry trend EHRL faced a challenging H1 with low walk-inslow sales and collections higher cancellations and slowing down of constructionactivities across projects.
However in H2 FY21 EHRL registered a sharp increase in sales collections andconstruction activities compared to H1 - 83% of annual sales 70% of annual collectionsand 61% of construction activities were done in H2 FY21.
The Company has completed development of 1.4 Million Sft till date and the balance areaunder development as on date is 4.5 Million Sft.
Subsidiaries of EHRL
1. Emerald Haven Development Limited;
2. Emerald Haven Projects Private Limited;
3. Emerald Haven Life Spaces (Radial Road) Limited;
4. Emerald Haven Realty Developers (Paraniputhur) Private Limited;
5. Emerald Haven Property Development Limited;
6. Emerald Haven Town and Country Private Limited;
7. Happiness Harmony Property Developers Private Limited; and
8. Emerald Haven Towers Limited.
TVS Training and Services Limited (TVS TSL)
TVS TSL is engaged in the business of establishing and providing vocational trainingservices to various industries and is participating in the National Skill DevelopmentProjects. During the year the Company earned an income of Rs 10.79 Cr and incurred a lossbefore tax of
Rs 2.33 Cr. for the year ended 31st March 2021.
Sundram Non-Conventional Energy Systems Limited (SNCES)
SNCES is engaged in the business of generation of power. During the year the Companyearned a total revenue of Rs 2.75 Cr and Profit after tax was Rs 1.57 Cr.
8. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company are prepared in accordance withthe provisions of Section 129 of the Act 2013 read with the Companies (Accounts) Rules2014 and Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (Listing Regulations) along with a separate statement containing thesalient features of the financial performance of subsidiaries / associates in theprescribed form. The audited consolidated financial statements together with Auditors'Report forms part of the Annual Report.
The audited financial statements of the subsidiary companies will be made available tothe Shareholders on receipt of a request from any Shareholder and it has also been placedon the website of the Company. This will also be available for inspection by theShareholders at the Registered Office during the business hours as mentioned in the Noticeof AGM.
The consolidated Profit Before Tax of the Company and its subsidiaries & associatesamounted to Rs 854.26 Cr for the financial year 2020-21 as compared to Rs 845.21 Cr in theprevious year.
9. DIRECTORS & KEY MANAGERIAL PERSONNEL
Directors' appointment / re-appointment
During the year under review the Board has appointed Mr. Rajesh Narasimhan asNon-Executive Non-Independent Director (NE-NID) on the Board at its meeting held on 24thMarch 2021 on the recommendation of the Nomination and Remuneration Committee.
While recommending Mr. Rajesh Narasimhan's appointment on the Board the Directorsnoted that his extensive experience in general management digital technology and Business& Digital transformation would be a great asset on the Board of Directors of theCompany. Considering his experience of more than three decades in both startup and matureorganizations across multiple industries including Information Technology his co-optionto the Board would be required for the Company in the context of its business(es) andsector(s) to function effectively and also for achieving its targeted performance.
Then the Board considered his appointment as an additional and NE-NID of the Companytill the next annual general meeting subject to the approval of the shareholders liableto retire by rotation.
The Board also noted that post appointment of Mr. Rajesh Narasimhan Non-ExecutiveNon-Independent Director (NE-NID) on the Board the composition of board is in compliancewith half of the Board consisting of Non-Executive Independent Directors as requiredunder the Listing Regulations.
In terms of the provisions of sub-section (6) read with explanation to Section 152 ofthe Act 2013 two-thirds of the total number of Directors i.e. excluding IDs are liableto retire by rotation and out of which one-third is liable to retire by rotation at everyannual general meeting. Mr Sudarshan Venu and Mr T K Balaji are liable to retire byrotation at the ensuing AGM and being eligible offer themselves for re-appointment.
The Directors have recommended the appointment / re-appointment for the approval ofshareholders. Brief resume of the Directors are furnished in the Notice convening the AGMof the Company.
Independent Directors (IDs)
All IDs hold office for a fixed term and are not liable to retire by rotation.
At the AGM held on 23rd July 2019 Ms Sasikala Varadachari was appointed as ID for thea term of five consecutive years. M/s Vice Admiral P J Jacob was re-appointed as ID for asecond term of five consecutive years from 21st August 2019 and M/s V Subramanian SSanthanakrishnan R Vijayaraghavan and Kamlesh Gandhi were reappointed as IDs for thesecond term of three consecutive years from 21st August 2019. Mr. Gopalan was re-appointedas ID for the second term of three consecutive years from 24th July 2019. The terms ofappointment of IDs include the remuneration payable to them by way of fees and profitrelated commission if any.
The terms of IDs cover inter-alia duties rights of access to information disclosureof their interest / concern dealing in Company's shares remuneration and expensesinsurance and indemnity. The IDs are provided with copies of the Company's policies andcharters of various Committees of the Board.
In accordance with Section 149(7) of the Act 2013 all IDs have declared that theymeet the criteria of independence as provided under Section 149(6) of the Act 2013 andRegulation 25 of the Listing Regulations.
The detailed terms of appointment of IDs is disclosed on the Company's website in thelink as provided in page no. 72 of this Annual Report.
All the IDs have registered with the databank of Independent Directors developed by theIndian Institute of Corporate Affairs in accordance with the provisions of Section 150 ofthe Act 2013 and obtained ID registration certificate and renewed the same for five years/ life time as the case may be.
Separate meeting of Independent Directors
During the year under review a separate meeting of IDs was held on 22nd March 2021.
Based on the set of questionnaires complete feedback on Non-Independent Directors anddetails of various activities undertaken by the Company were provided to IDs to facilitatetheir review / evaluation.
(a) Non-Independent Directors (Non-IDs)
IDs used various criteria and methodology practiced in Industry prescribed by NRC forevaluation of Non-IDs M/s. Venu Srinivasan Chairman and Managing Director Dr. LakshmiVenu Joint Managing Director and Sudarshan Venu T K Balaji and Gopal SrinivasanDirectors Chairman of the Board and Board as a whole.
IDs evaluated the performance of all Non-IDs individually through a set ofquestionnaires. They reviewed their interaction during the Board / Committee meetings andstrategic inputs given by them to improve the cyber security framework risk managementinternal controls and contribution to the Company's growth.
IDs were satisfied fully with the performance of all Non-IDs.
The IDs reviewed the performance of Chairman of the Board after considering hisperformance and benchmarked the achievement of the Company with industry based on factsand figures recorded under his stewardship.
The IDs also placed on record their appreciation of Chairman's timely and proactiveinterventions for making progress on production and sales by judicious cutting of costsand bringing in the right talent to streamline operations in an exceptionally difficultand unpredictable year battered by a pandemic. IDs have also commended the transparencyand commitment to corporate governance and he stayed ahead in setting very high standardsfor the Company.
IDs also applauded the organized & timely response in undertaking socialinitiatives for the community during CoVID times.
IDs also evaluated Board's composition size mix of skills and experience its meetingsequence effectiveness of discussion decision making follow up action so as to improvegovernance and enhance personal effectiveness of Directors.
The evaluation process focused on Board Dynamics and the Board upon evaluationconcluded that it is well balanced in terms of diversity of experience with expert in eachdomain viz. Engineering Leadership/ Strategy Finance Legal and Regulatory andGovernance. The Company has a Board with wide range of expertise in all aspects ofbusiness.
IDs recorded that they were always kept involved through open and free discussions andprovided additional inputs in emerging areas being forayed into by the Company and highlevels of Corporate Governance in all management discussion and decisions were maintained.
The IDs unanimously evaluated the prerequisites of the Board viz. formulation ofstrategy acquisition & allocation of overall resources setting up policiesDirectors' selection processes and cohesiveness on key issues and satisfied themselvesthat they were adequate.
They were satisfied with the Company's performance on all fronts and finally concludedthat the Board operates with best practices.
(d) Quality Quantity and Timeliness of flow of Information between the CompanyManagement and the Board
All IDs have expressed their overall satisfaction with the support received from themanagement and the excellent work done by the management during the year under review andalso the relationship between the top management and Board is smooth and seamless.
The information provided for the meetings were clear concise and comprehensive tofacilitate detailed discussions and periodic external presentations on specific areas wellsupplemented the management inputs. The emerging e-technology was duly incorporated in theoverall review of the Board.
KEY MANAGERIAL PERSONNEL (KMP)
Mr Venu Srinivasan Chairman and Managing Director Dr Lakshmi Venu Joint ManagingDirector Mr Vivek S Joshi CEO Mr K Gopala Desikan CFO and Mr R Raja Prakash CompanySecretary are the 'Key Managerial Personnel' of the Company as on date of this Report.
Nomination and Remuneration Policy
The Nomination and Remuneration Committee of Directors (NRC) reviews the composition ofthe Board to ensure an appropriate mix of abilities experience and diversity to serve theinterests of all stakeholders of the Company.
Nomination and Remuneration Policy was approved by the Board at its meeting held on24th September 2014 and amended from time- to-time to maintain consistency and statutoryamendments to be reflected in the policies to make it upto date and more comprehensive.The objective of such policy shall be to attract retain and motivate executive managementand devise remuneration structure to link to Company's strategic long term goalsappropriateness relevance and risk appetite.
NRC will identify ascertain the integrity qualification appropriate expertise andexperience having regard to the skills that the candidate will bring to the Board /Company whenever the need arises for appointment of Directors / KMP.
Criteria for performance evaluation disclosures on the remuneration of Directors havebeen disclosed as part of Corporate Governance Report attached herewith.
Remuneration payable to Non-executive Independent Directors
The shareholders through Postal Ballot on 22nd June 2016 approved the remuneration byway of commission not exceeding 1% of the net profits in aggregate payable toNon-Executive and Independent Directors of the Company (NE-IDs) for every year subject tothe performance of the Company for a period of 5 years commencing from 1st April 2016.
NE-IDs devote considerable time in deliberating the operational and other issues of theCompany and provide valuable advice in regard to the management of the Company from timeto time and the Company also derives substantial benefit through their expertise andadvice.
Evaluation of Independent Directors and Committees of Directors
In terms of Section 134 of the Act 2013 and the Corporate Governance requirements asprescribed under the Listing Regulations the Board reviewed and evaluated IndependentDirectors and various Committees viz. Audit Committee Risk Management CommitteeNomination and Remuneration Committee Corporate Social Responsibility Committee andStakeholders' Relationship Committee based on the evaluation criteria laid down by theNRC.
Board has carried out the evaluation of all Directors (excluding the Director beingevaluated) and its Committees through a set a questionnaires.
The performance of all IDs were assessed against a range of criteria such ascontribution to the development of business strategy and performance of the Companyunderstanding the major risks affecting the Company clear direction to the management andcontribution to the Board cohesion. The performance evaluation has been done by the entireBoard of Directors except the Director concerned being evaluated.
The Board noted that all IDs have understood the opportunities and risks to theCompany's strategy and are supportive of the direction articulated by the management teamtowards consistent improvement.
On the basis of the report of performance evaluation of Directors the Board noted andrecorded that all the Directors should extend and continue their term of appointment asDirectors / Independent Director as the case may be.
Board delegates specific mandates to its Committees to optimize Directors' skills andtalents besides complying with key regulatory aspects.
Audit Committee for overseeing financial Reporting;
Risk Management Committee for overseeing the risk management framework;
Nomination and Remuneration Committee for selecting and compensating Directors /Employees;
Stakeholders' Relationship Committee for redressing investors grievances; and
Corporate Social Responsibility Committee for overseeing CSR initiatives andinclusive growth.
The performance of each Committee was evaluated by the Board after seeking inputs fromits Members on the basis of specific terms of reference its charter time spent by theCommittees in considering key issues quality of information received majorrecommendations / action plans and work of each Committee.
The Board is satisfied with the overall effectiveness and decision making of allCommittees. The Board reviewed each Committee's terms of reference to ensure that theCompany's existing practices remain appropriate.
Recommendations from each Committee were considered and and accepted by the Board priorto its implementation during the financial year under review.
Details of Committees its charter functions are provided in the Corporate GovernanceReport attached to this Report.
Number of Board meetings held:
The number of Board meetings held during the financial year 2020-21 is provided as partof Corporate Governance Report prepared in terms of the Listing Regulations.
The Company at its 55th AGM held on 19th July 2017 appointed M/s Raghavan Chaudhuri& Narayanan Chartered Accountants Bengaluru having Firm Registration No. 007761Sallotted by The Institute of Chartered Accountants of India as Statutory Auditors of theCompany to hold office for the first term of five consecutive years from the conclusionof the said AGM at such remuneration in addition to applicable taxes out of pocketexpenses travelling and other expenses as may be mutually agreed between the Board ofDirectors of the Company and the Auditors.
The Statutory Auditors will continue to hold office for the fifth year in the firstterm of five consecutive years from the conclusion of this AGM.
The Company has obtained necessary certificate under Section 141 of the Act 2013conveying their eligibility for being Statutory Auditors of the Company for the year2021-22.
The Auditors' Report for the financial year 2020-21 does not contain any qualificationreservation or adverse remark and the same is attached with the annual financialstatements.
As required under Section 204 of the Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company is required to appoint aSecretarial Auditor for auditing secretarial and related records of the Company.
The Secretarial Audit Report for the financial year 2020-21 given by Mrs B ChandraPractising Company Secretary Chennai for auditing the secretarial and related records isattached to this report. The Secretarial Audit Report does not contain any qualificationreservation or other remarks.
The board at its meeting held on 28th April 2021 has re-appointed Mrs B ChandraPractising Company Secretary Chennai (CP No. 7859) as Secretarial Auditor for thefinancial year 2021-22.
As per Section 148 of the Act 2013 read with the Companies (Cost Records and Audit)Rules 2014 the cost audit records maintained by the Company in respect of partsmanufactured by the Company covered under other machinery specified under Customs TariffAct heading in Table B to Rule 3 of the above rules are required to be audited by a CostAuditor.
In terms of the Companies (Cost Records and Audit) Amendment Rules 2014 the boardre-appointed Mr A N Raman Cost Accountant Chennai holding Certificate of practice No.5359 allotted by The Institute of Cost Accountants of India as a Cost Auditor forconducting cost audit for the financial year 2021-22.
The Company has also received necessary certificate under Section 141 of the Act 2013from him conveying his eligibility to act as a cost auditor. A sum of Rs 3.50 lakhs hasbeen fixed by the Board as remuneration in addition to reimbursement of all applicabletaxes travelling and out-of-pocket expenses payable to him for the year 2021-22 whichis required to be approved and ratified by the members at the ensuing AGM as per Section148(3) of the Act 2013.
The Company has filed the Cost Audit Report of 2019-20 on 26th August 2020 in XBRLformat.
11. CORPORATE GOVERNANCE
The Company has been practicing the principles of good corporate governance over theyears and lays strong emphasis on transparency accountability and integrity.
A separate section on Corporate Governance and a certificate from the StatutoryAuditors of the Company regarding compliance of conditions of Corporate Governance asstipulated under the Listing Regulations form part of this Annual Report.
The Chairman and Managing Director and the Chief Financial Officer of the Company havecertified to the Board on financial statements and other matters in accordance withRegulation 17(8) of the Listing Regulations 2015 pertaining to CEO / CFO certificationfor the financial year ended 31st March 2021.
12. BUSINESS RESPONSIBILITY REPORT
In terms of Regulation 34 of the Listing Regulations the Business ResponsibilityReport for the year 2020-21 describing the initiatives taken from an environment socialand governance perspectives in the prescribed format is given as Annexure-VI to thisReport and and is available on the Company's website in the link as provided in page no.72 of this Annual Report.
13. POLICY ON VIGIL MECHANISM
The Company has adopted a Policy on Vigil Mechanism in accordance with the provisionsof the Act 2013 and Regulation 22 of the Listing Regulations which provides a formalmechanism for all Directors Employees and other Stakeholders of the Company to report tothe management their genuine concerns or grievances about unethical behaviour actual orsuspected fraud and any violation of the Company's Code of Business Conduct and Ethics.
The Code also provides a direct access to the Chairman of the Audit Committee to makeprotective disclosures to the management about grievances or violation of the Company'sCode.
The Policy is disclosed on the Company's website in the link as provided in page no. 72of this Annual Report.
14. PUBLIC DEPOSITS
The Company has not accepted any deposit from the public within the meaning of Section76 of the Act 2013 for the year ended 31st March 2021.
15. STATUTORY STATEMENTS
Information on conservation of energy technology absorption foreign exchange etc.
Relevant information is given in Annexure-I to this Report in terms of therequirements of Section 134(3)(m) of the Act 2013 read with the Companies (Accounts)Rules 2014.
Material changes and commitments if any affecting the financial position of theCompany having occurred since the end of the Year and till the date of the Report:
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this Report.
Significant and material orders passed by the Regulators or Courts or Tribunalsimpacting the going concern status of the Company
There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
Copy of the Annual Return (Annexure II) in prescribed form is available on theCompany's website in the following link as provided in page no. 72 of this Annual ReportIn terms of the requirements of Section 134(3)(a) of the Act 2013 read with the Companies(Accounts) Rules 2014.
Details of employees receiving the remuneration in excess of the limits prescribedunder Section 197 of the Act 2013 read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are annexed as a statement and given inAnnexure-III. In terms of first proviso to Section 136(1) of the Act 2013 the AnnualReport excluding the aforesaid annexure is being sent to the Shareholders of the Company.The annexure is available for inspection at the Registered Office of the Company duringbusiness hours as mentioned in the Notice of AGM and any Shareholder interested inobtaining a copy of the said annexure may write to the Company Secretary at the RegisteredOffice of the Company.
Comparative analysis of remuneration paid
A comparative analysis of remuneration paid to Directors and employees with theCompany's performance is given as Annexure-V to this Report.
Details of material related party transactions
There are no material related party transactions under Section 188 of the Act 2013read with Companies (Meetings of Board and its Powers) Rules 2014.
Details of loans / guarantees / investments made
During the year under review the Company had not granted any loans or guaranteescovered under Section 186 of the Act 2013.
Please refer note no. 5 to Notes on accounts for the financial year 2020-21 fordetails of investments made by the Company.
Reporting of fraud
The Auditors of the Company have not reported any fraud as specified under Section143(12) of the Act 2013.
The Company has complied with the applicable secretarial standards as amended from timeto time.
Disclosure in terms of Sexual Harassment of Women at workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has an Internal Complaints Committee as required under The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
During the year under review there were no cases filed pursuant to the provisions ofSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Directors gratefully acknowledge the continued support and co-operation receivedfrom the promoters of the Company viz. T V Sundram Iyengar & Sons Private LimitedSouthern Roadways Private Limited Sundaram Industries Private Limited and SundaramFinance Holdings Limited.
The Directors thank the vehicle manufacturers vendors and bankers for their continuedsupport and assistance.
The Directors wish to place on record their appreciation of the continued excellentwork done by all the employees of the Company during the year. The Directors wish toacknowledge particularly the entire SCL family of employees for having steered thecompany through an unprecedented pandemic driven turmoil to keep on track as well as totake it forward.
The Directors specially thank the shareholders for their continued faith in theCompany.
| || |
For and on behalf of the Board of Directors
|Chennai ||VENU ||SRINIVASAN |
|28th April 2021 || ||Chairman |