TVS ELECTRONICS LIMITED
ANNUAL REPORT 2003
Speech delivered by Shri Venu Srinivasan, Chairman, At the Ninth Annual
General Meeting of TVS Electronics limited held at Chennai on 16th June,
Good morning ladies and gentlemen,
It gives me great pleasure to welcome you to the ninth annual general
meeting of the company.
The domestic IT industry witnessed a significant growth in the year 2003.
The PC shipments is estimated to have crossed 3.6 million in the financial
year 2003-04. The excise duty reduction on PC announced in January, will
further accelerate PC growth in 2004. Mobile phones market grew three fold
and shipments crossed 30 million mark in 2003-04. This will drive IT usage
through increased internet access and online Banking applications.
Increased IT spending by Banking and Financial Services, Insurance and the
Government sectors will also drive the demand for IT products locally.
REVIEW OF BUSINESS PERFORMANCE
Last year, the company's revenues increased by 20% to Rs.266 crores,
representing a healthy growth rate. The profit after tax grew at a even
higher rate, to Rs,3,67 crores.
Products & Solutions Business Group (P&S)
The P&S business group grew the Dot Matrix Business by 30%, resulting in an
increased market share of over 40%. The P&S business group's overall
revenues increased by 30% to Rs. 214 crores.
New products introduced in the last two years including Payment Systems and
TVS Proton have been well received in the market.
Electronic Manufacturing Services Business Group (EMS)
In the EMS business, the revenues were at Rs.47 crores compared to Rs.57
crores last year. This is due to lower off-take by external customers. The
exports were steady at the level of Rs.34 crores like last year.
CURRENT YEAR PROSPECTS
In this year, upto May 2004, all businesses have grown over the last year.
The printer business has recorded a growth of 13% and has been able to
maintain its market share of 40%. The only exception to this is the payment
systems business, where the banks have deferred the purchase of terminals,
The Company expects significant growth in the rest of 2004 also.
The company continues to invest nearly 2% of its revenues on R&D to sustain
its market leadership and growth. The company plans to introduce low cost
mini printers and point of sale machines in the near future to tap the
The company is preparing itself through robust cost reduction programmes to
operate under the zero duty regime which comes into effect from 2005, The
benefits of this programme will be visible in the performance of the
India is emerging as a preferred destination for contract manufacturing by
global majors. The EMS business is poised to take advantage of this
opportunity. The areas of focus would be Power Electronics and high volume
products for the domestic Information and Communication Technology market.
According to a recent study by Ernst & Young, the Indian IT hardware market
is expected to grow five fold from $6 billion currently to about $30
billion by 2009. This will mean significant opportunities for well
established hardware manufacturing companies such as TVS Electronics.
PEOPLE AND PROCESS
In the last two years, programmes were launched in the areas of HR and TQM
towards creating a high performance work culture and development of
leadership at various levels.
The Six Sigma initiatives launched last year have taken strong roots.
Nearly 51% of the employees have been trained in six sigma and the benefits
have started flowing in from the projects completed.
The company records its sincere thanks to our customers, whose trust and
continued support have made our growth possible. I thank all the employees
of the company, whose sustained perseverance has been at the core of our
improved performance in 2003.
I would like to thank the bankers, business partners and associates. We
especially thank our promoters, Sundaram-Clayton Limited and the large
family of shareholders for their continued trust and unstinted support.