Your Directors have pleasure in presenting the 23rd Annual Report of your Company forthe financial year ended 31st March 2018. The Management Discussion and Analysis (MDA) isan integral part of this report.
The financial performance of the Company for the year ended 31st March 2018 issummarized below. The financial statements for the year have been prepared in accordancewith the new mandatory accounting standard Ind AS and necessary changes were made to thecorresponding figures of the previous year.
|Standalone || ||(` in Lakhs) |
|Particulars ||Year ended ||Year ended |
| ||31.03.2018 ||31.03.2017 |
|Revenue from operations ||417798 ||252316 |
|Earnings Before Interest & Tax (EBIT) ||2218 ||1154 |
|Profit/ (Loss) Before Tax (PBT) and exceptional items ||2076 ||873 |
|Exceptional items / Extra-ordinary Items ||369 || |
|Profit / (Loss) Before Tax ||2445 ||873 |
|Profit / (Loss) After Tax (PAT) ||1624 ||633 |
|Add: Brought forward from previous year ||2981 ||2348 |
|Less: Dividend on equity shares (incl. taxes) ||(112) || |
|Retained earnings ||4493 ||2981 |
During the year under consideration the Company improved its margins on its ITProducts and Technical Services due to productivity improvement measures and costmanagement initiatives undertaken. The margins from Distribution business was also higherowing to higher volumes of mobile phones distributed by the Company. The revenue figuresare not directly comparable due to method of accounting followed on
account of GST effective 1st July 2017.
Earnings before interest and taxes for the year have almost doubled to $ 2218 lakhsfrom $ 1154 lakhs thanks to strong performance from almost all our segments. IT Productsand Technical Services turned around significantly to post an EBIT of $ 1106 lakhs in FY17-18 from a loss before interest and taxes of
$ 116 lakhs the previous year. The EBIT from Distribution Services also increased to $1261 lakhs from
$ 963 lakhs. Other income for the year was at
$ 220 lakhs vis--vis $ 307 lakhs the year before.
The growth in EBIT has resulted in the Company's Profit Before Exceptional items risingto $ 2076 lakhs in FY 17-18 from $ 873 lakhs the previous year.
The free cash flow growth continued to be robust for the third year in successionresulting in reduced borrowing and consequently reduced finance cost to the Company.During the year as part of consolidation exercise the Company shifted its small PoSproducts manufacturing facility from Oragadam Chennai to its main facility at Dehradun.
The profit before tax for FY18 was $ 2445 lakhs an almost three-fold increase fromthe previous year's number of $ 873 lakhs. The PAT increased to $ 1624 lakhs from $ 633lakhs.
During the year the Company successfully amalgamated its wholly owned subsidiary PrimeProperty Holdings Limited (PPHL) with itself after requisite approvals from itsshareholders and the National Company Law Tribunal. This added over $ 7 cr to the networth of the Company.
FY18 had been a year of watershed reforms in India which have turned out to bedisruptive for businesses that were ill-prepared for change. Even as India Inc was in theprocess of recuperating from the demonetization of high-value currency notes in November2016 the Centre decided to expedite the transition to Goods and Services Tax which wasintroduced with effect from July 2017.
However the Company had viewed both these policy actions as opportunities to leapfrogits market share and growth metrics. The supply chain was thoughtfully planned in advanceof the GST rollout timely changes in tax rates and procedures were incorporated into theERP application and channel supplies were enhanced to captalise on the momentum. Themarket was quite receptive to early movers post- GST. As a result the Company registeredover 30% volume growth in Thermal and Label Printers and over 23% in Scanners for theyear. However traction in business from the Government and the banking sector remainedsubdued even several months after the introduction of GST.
On the Technical Services front there was significant improvement in the last quarteras the Company bagged new enterprise orders to install and service EDC terminals AirConditioners TVs and IT assets.
During the year the footprint for the Company's retail walk-in services was extendedto 119 partner centers and 54 own centers. The take-off in consumer electronics isexpected to generate considerable growth potential for this technical services businessas there are a very few national players in this segment. Leveraging on its richexperience the Company continues to provide best in class services to the customers witha strong value proposition to the brands it is associated with.
The Company has renewed its Distribution contract for the year and has commencedselling television sets in addition to mobile phones and accessories. With installationcapabilities added to this offering it may usher in synergistic benefits to this segment.Nonetheless your Company views the dynamics of Distribution services segment as veryvolatile and susceptible to macroeconomic and regulatory changes.
The Directors are pleased to recommend a dividend of
$ 1.50 per equity share for the financial year ended 31st March 2018 (Previous Year 50paise per equity share). The dividend if approved by shareholders would absorb
$ 336.58 lakhs including taxes (Previous year 112.54 lakhs including taxes) on18612818 Equity Shares of
$ 10/- each and will be paid to all the equity shareholders whose names appear in theRegister of Members of the
Company and depositories as on 2nd August 2018.
MANAGEMENT DISCUSSION AND ANALYSIS
This Management Discussion and Analysis forms an integral part of this report and givesdetails of the overall industry structure economic developments performance and state ofaffairs of the Company's key business lines viz. IT-related Products & TechnicalServices and Distribution Services during FY18. It also sheds light on the internalcontrols and their adequacy risk management systems and other material developmentsduring the financial year.
IT Products and Solutions:
As expected the Government's digital drive has acted as a tailwind for the IT Products& Solutions business. With improved digital access and GST thousands of retailtraders in India have either moved into the organised retail fold or are in the processof doing so. This is driving the rapid adoption of PoS devices in the market. As per thelatest Economic Survey GST has increased the indirect taxpayer base by more than 50 percent with 34 lakh businesses coming into the indirect taxes net.
The Company witnessed spinoff benefits from this formalization of the economy. Afteryears of stagnation in FY 18 your Company's iconic 80 column dot matrix printersexperienced a 4% volume growth which the Company believe is entirely attributable tointroduction of GST in July 2017. Your company has capitalised on the momentum andincreased its market share from 38% to 40% in the segment. Your Company has also beenproactive in identifying product gaps and has rolled out new initiatives to launch newranges of mobile printers tailored to the needs of small merchants.
While there had been a good growth from trade segment the year also witnessed influxof low cost entry-level printers into the market. This is a segment TVS Electronics is notkeen to focus on. But as this segment saw a deluge of substandard variants the overallmarket share for the Company in both Thermal and Label printers fell by between 1 and 2percentage points; however these product ranges had registered growth rates upwards of30% year on year. The market share in niche PoS Electronic Cash Registers - used by smalleateries and retail stores to Go Live in about an hour - had grown from 16% to 19% thanksto the quick GST-enabled range rolled out by the Company.
As part of assuring high quality standards to customers the Company has taken severalquality enhancement initiatives by strengthening the overall quality framework. Astringent validation process has been put in place for input materials analyzing andtaking corrective and preventive actions on warranty incidence. To reap cost benefits postimplementation of GST the Company closed certain depots / inventory hubs as part ofnationalisation and consolidation of its operations to improve logistics efficiency andreduce costs.
Merchant Acquisition Business:
With over 3000 dealer partners and over 300000 merchant customers the Company hasforayed into the distribution of EDC PoS terminals and Merchant Acquisition Business inassociation with an overseas manufacturer.
The Company's pan-India service network and experience in managing over 5% of thecountry's installed base of EDC PoS terminals add great strength to this proposed businesssegment. The Company has contracted with an RBI-approved switch partner and is planning tolaunch the new devices in 2nd half of FY2019.
The Indian Payments industry is undergoing a sea change as the demonetization hasgenerated considerable push as well as a conducive climate for transitioning the economyfrom the cash mode to the digital mode.
Statistics from the Committee on Payments and Market Infrastructure (CPMI) on paymentsystems (release date December 2017) offer interesting insights on the potential fordigital payments. For the year 2016 India's annual per capita digital transaction levelwas only 15 (Year 2015: 12 / Year 2014: 9) - the lowest among all countries for which dataare available (the second lowest was China / Mexico at 34 digital transactions percapita). Besides encouraging the growth of UPI and wallet based payments solutions Indiawill need to improve its card payment infrastructure significantly to truly tap thepotential of digital payments particularly to reach the mammoth 25 billion retail digitaltransactions target. Payment industry experts advocate growing the PoS devices base fromthe current 3 million level (it was just 1.4 million before demonetization) besidesdis-incentivising cash. The Company is very confident of establishing a strong presencefor this segment as the economy charts a recovery from the disruptive phase.
Technical Services BU:
This Business Unit (BU) currently handles installation and technical service calls onbehalf of over 25 brand partners covering 10000+ pincodes across a very wide array ofdevice categories. During the year this BU expanded its network of installation andservicing a range of Servicetec network - white goods like Air conditioners and Pincodesserviced
Televisions. The current array of device categories include (i) Mobiles phones /tablets (ii) IT Products - Desktops / Laptops / All-in-ones / Printers / Scanners /Keyboards (iii) Consumer Electronics - Air conditioners / washing machines / Televisions/ Personal grooming devices / Air and water purifiers and (iv) Banking automation devices- ATMs / EDC PoS terminals / Cash counting machines etc. On an average service callsexceeding a whopping 100000 pm are completed and delivered either 'onsite' or out ofauthorised service centers under 'carry-in' service model. At the exit of the FY2018 theservice center network comprised of 54 own and 119 partner-managed service centers. Thesecenters are either exclusive for brand partners or brand agnostic. They largely coverMobile phones and Tablets.
In the last two years as the country's mobile phone industry faced bruisingcompetition the business of several national and a few global brands has been severelyimpacted. This did trickle down to a section of the Company's technical services BU. TheBU had to exit from certain unviable markets / accounts and consolidate some servicecenters and spares warehouses.
Therefore for the BU FY 18 has been a year of streamlining and consolidation that hasimproved the gross margins by over $ 700 lakhs but with flattish topline growth. TheCompany is wary of the high risk of disruption in high technology product categories andis accordingly treading cautiously seeking out growth through an asset light model withdiversification across categories. The growth projections are estimated mainly based onservicing white goods and consumer electronics which can be leveraged by company'sexisting warehouses branch offices and program management infrastrucutre. The BU is alsoplanning to roll out Business to Customer (B2C) service centers in a wholly new format inQ1 FY19.
A sub-unit of this BU - e-Auction services - continues to register steady growthoffering (a) Reverse auction and (b) e-Procurement services digitally through its portalwww.auctionindia.com. This web portal managed acts as a platform for connecting severalcorporates and bidders towards disposal of e-waste used assets machinery and ferrous /non-ferrous scrap.
The Board believes that with the completion of necessary course corrections favourablemarket conditions and able leadership the Company is well-placed to successfully engineerits next significant transformative phase. The Board is also glad that the Company'sgrowth strategy incorporates a socially responsible business model. In the process oftransforming and scaling up its business verticals the Company has been empowering thetrading fraternity to participate in the nation's digital initiatives and providingemployment directly and indirectly to several hundreds of young engineers. The Boardreassure our customers employees bankers vendors and all other stakeholders that theCompany is set for a revitalised journey for many more years to come.
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 among others economicconditions affecting demand/supply and price conditions in the domestic and overseasmarkets changes in Government regulations tax laws and other statutes and incidentalfactors.
Business Risks & Opportunities
The Company's key imperative over the medium term will be sustaining the currentrevenue streams even as we build a strategic framework and drive the Technical Servicesbusiness leveraging macro trends and business opportunities as described elsewhere.
Key success factors (and therefore risks) are predicated on the timely execution ofthese plans building the internal capabilities by attracting and retaining talent andkeeping pace with technological and market changes. The Board and management of theCompany are confident of proactively managing these risks.
Internal Control Systems and their adequacy
The Company ensures that all transactions are authorized recorded and reported and hasadequate internal control systems to ensure that assets are safeguarded and protectedagainst any loss. The key processes are aligned with ISO9001:2008 system and auditedperiodically for compliance.
The scope and authority of the Internal Auditors are clearly defined. The findings andrecommendations of the Internal Auditors are reviewed by the Audit committee of the Boardon a periodical basis and necessary corrective actions by the process owners are taken.
Internal Financial Controls
The Company has established Internal Financial Controls framework including internalcontrols over financial reporting operating controls and anti-fraud framework. Theframework is reviewed regularly by the Company and tested by the internal auditors andpresented to the audit committee. Based on periodical testing the framework isstrengthened from time to time to ensure adequacy and effectiveness of InternalFinancial Controls.
Risk Management process
The Company has an established Risk Management Process which is tested by the internalauditors and overseen by the Audit Committee through a structured framework. The frameworkis implemented through a bottom up approach identifying assessing monitoring andmanaging key risks across the Company's business units. The management of the Company hasreported to the Board that the Company's risk management and internal compliance andcontrol system is operating effectively.
The Company follows the policy of hedging forex risk on its imports by taking fullcover.
At present in the opinion of the Board of Directors there are no risks which maythreaten the existence of the Company.
Business Planning and Information Technology
The Company has moved its applications and data base to a Cloud-based server since2015-16. This has resulted in de-risking the storage of critical information in our ownhardware. The Company also simultaneously monitors software upgradation which helps runbusiness operations in an efficient manner. In terms of Companies Act 2013 the detailsof maintenance of books of accounts on cloud server is being intimated to the Registrar ofCompanies at the time of annual filing.
The data analytics capabilities acquired by the Company last year helps capturingrelevant information for decision-making across various businesses. The informationdashboards so generated helped the management and operating teams to have real-timeinformation on process controls and take pro-active steps to manage operations.
Human Resource Development
The Company's Human resources strategies are build to support the Business expansionand growth. During the year the company was successful in attracting experienced andfresh hires with diverse Educational & Cultural background to support our expansion aswe ventured into new areas. We were also able to create internal growth opportunities forour Employees through job rotations to support their growth as we added new Brands to ourportfolio.
Learning and Development continued to be our focus area to up-skill our Employees andwe also extended training support to our Partner's (Engineers) both on product and softskills as part of routine and refresher training (e-Learning) to enrich their competenciesand create enhanced experience to our Customers.
During the year the Company invested on Leadership
development programs which also included a 360 degree feedback for Leadership team andvarious programs for middle management teams. The Company also sponsored Employees forexternal public programs to acquire new skills based on latest trends in the Industry.
The Company continued to focus on building a High performance Culture to recognize andreward Employees for their performance & focused on Quarterly goal alignment forcontinuous and structured feedback.
The Company continues to engage with all Employees regularly through a monthlycommunication from CEO to update them on the Business progress and also recognise themwith Spot/Monthly/Quarterly awards at different forums for their exemplary Individual andteam performance. We also focused on Employee well-being
& Hygiene through daily morning exercise at their workplace and invited externalexpert to address them on Health and Hygiene.
The Company is fully committed to the ultimate goal of employee safety. Safety trainingand safety audit are frequently conducted enabling the Company to maintain anaccident-free record at its factories for several years.
Code of Business Conduct and Ethics
The Company has in place the Code of Business Conduct and Ethics for member of theBoard and senior management personnel (the Code) approved by the Board. The Code has beencommunicated to directors and the senior management personnel. All the members of theBoard and senior management personnel have confirmed compliance with the Code of BusinessConduct and Ethics for the year ended 31st March 2018. The Annual Report contains adeclaration to this effect signed by Chief Executive Officer. The Code is available on theCompany's Website www.tvs-e.in.
Vigil Mechanism / Whistle Blower policy
The Company has established a vigil mechanism which is overseen by the AuditCommittee. The Chairman of the Audit Committee has been appointed as the Ombudsman for theVigil mechanism. The policy provides a formal mechanism for all directors employees toreport to the management their genuine concerns or grievances about unethical behaviouractual or suspected fraud and any violation of the Company's Code of Business Conduct andEthics policy. The Company has also provided direct access to the Chairman of the AuditCommittee on reporting issues concerning Company. The Policy is available on the Company'sWebsite www.tvs-e.in.
Prevention of Insider Trading
The Company has a Code of Conduct for Prevention of Insider Trading in line with SEBI(Prevention of Insider Trading) Regulations 2015. The Code has been communicated to allthe employees at the time of orientation and adhered to by the Board of Directors seniormanagement personnel and the other persons covered under the code. The Company followsclosure of trading window prior to publication of price sensitive information. The Companyhas adopted Fair Practices Code (FPC) as per the regulations. Code of Conduct for InsiderTrading Regulation and the Fair Practices Code are available on the Company's Websitewww.tvs-e.in.
During the year under review the Holding Company M/s. TVS Investments Private Limited(TVSI) [formerly Sundaram Investment Limited] was converted into a private limited companywith effect from 2nd November 2017 vide Order of the National Company Law Tribunal dated21st June 2017. TVSI holds 59.96% of the outstanding equity in the Company as on 31stMarch 2018 (previous year: 59.96%). The change in the constitution of the holding companydoes not have any impact on the Company.
Scheme of Amalgamation
During the year Hon'ble National Company Law Tribunal (NCLT) vide its order dated27th March 2018 sanctioned the Scheme of Amalgamation of Prime Property Holdings Limited(PPHL) its wholly owned subsidiary with the Company. The Scheme came into effect from29th March 2018. The Appointed date of Scheme was 1st April 2016. The Scheme was approvedby NCLT without any modification. The investment made by the Company in
PPHL amounting to $ 5 Lakhs consisting of 50000 Equity shares of $ 10/- each wascancelled. The Board of Directors of PPHL has also ceased and PPHL was dissolved withoutany process of winding up with effect from 29th March 2018.
Benani Foods Private Limited
Benani Foods Private Limited (Benani) a company started in the year 2014 ismanufacturing and trading 'ready to eat' and 'ready to cook' products. Benani was anassociate of Prime Property Holdings Limited (PPHL) having 34.06% stake as on 31st March2017. PPHL has invested in Benani during 2015. Consequent to amalgamation of PPHL with theCompany Benani has become direct investee in the Company.
Since 2014 Benani has scaled up in the last 4 years supplying to over 1000 retailoutlets in Chennai and also to institutional customers like educational institutionshospitals restaurants corporates etc. Benani's retail sales has gone up to 49% in2017-18 though institutional sales has come down due to GST.
The Company currently holds 41.80% in Benani. Though the shareholding and Boardcomposition in Benani is less than half since the Company has affirmative voting rightsthe Company is considered to have significant influence in Benani under applicable IndianAccounting Standards. Hence Benani is considered as a subsidiary of the Company.
During the year 2017-18 Benani's revenue was
$ 444 Lakhs. Being a start up company Benani has posted loss of $ 197 Lakhs due tohigh sales and distribution costs. Benani is planning to improve sales in the current yearto increase number of retail customers through 1500 shops.
Though Benani is not a material subsidiary the Company has nominated a director to theBoard of Benani to oversee the performance of the subsidiary. Further the Board ofDirectors of the Company review the performance of the subsidiary in its quarterly boardmeetings as well.
The Consolidated financial statements of the Company are prepared in accordance withthe provisions of Section 129 of Companies Act 2013 read with Companies (Accounts) Rules2014 and Regulation 33 of SEBI (LODR) Regulations 2015.
A Statement in form AOC -1 under Section 129(3) of the Companies Act 2013 is enclosedas Annexure A. The audited consolidated financial statements together with Auditors reportforms part of the Annual report.
Pursuant to the provisions of Section 136 of the Companies Act 2013 the auditedfinancial statements of BFPL will be made available to the shareholders on receipt of arequest from any shareholder of the Company and it has also been placed on the website ofthe Company at www.tvs-e.in. This will also be available for inspection by theshareholders at the Registered Office of the Company during business hours.
Extract of Annual Return in Form MGT-9 is given as
Annexure B to this report.
Number of Board Meetings
The Board of Directors met five times during 2017-18. The details of the Board Meetingsand the attendance of the Directors are provided in the Corporate Governance Report.
The paid up share capital of the Company as on 31st March 2018 is $ 186128180/-consisting of 18612818 Equity Shares of $ 10/- each. During the year the Company hasnot issued any fresh shares.
Particulars of Loans Guarantees or Investments
The Company has not granted any fresh loans or guarantees or provided any security inconnection with any loan to any other body corporate or person covered under theprovisions of Section 186 of Companies Act 2013. The details of investments made by theCompany are given in the financial statements.
Related Party Transactions
All the related party transactions entered into are on 'arm's length' basis and in theordinary course of business and are in compliance with the provisions of the CompaniesAct 2013 and the SEBI (LODR) Regulations 2015. None of the transactions are in thenature of having any potential conflict with the interests of the Company at large. Therewere no material related party transactions during the year.
Omnibus approvals are obtained for related party transactions which are repetitive innature. In respect of unforeseen transactions specific approvals are obtained. Allrelated party transactions are approved / reviewed by the Audit Committee on a quarterlybasis with all the necessary details and are presented to the Board and taken on record.The details of transactions with related parties are provided in the financial statements.The Related Party Transactions policy as approved by the Board is uploaded on theCompany's website at www.tvs-e.in.
Directors and Key Managerial Personnel
All independent Directors hold office for a fixed period of five years and are notliable to retire by rotation. The Company has received declarations from all theIndependent Directors of the Company confirming that they meet the criteria ofindependence as prescribed under Section 149(6) of the Companies Act 2013 and Regulation16 (1) (b) of the SEBI (LODR) Regulations. 2015. The terms of appointment of IndependentDirectors are available in the Company's website www.tvs-e.in.
During the year Mr. Kenneth Tai an Independent Director resigned from the Board ofDirectors of the Company with effect from 9th November 2017. The Board places on recordits deep appreciation for his valuable advise and guidance and for his contribution to theBoard during his tenure with the Company.
Separate Meeting of Independent Directors
During the year a separate meeting of Independent Directors was held on 12th May2017. The Independent Directors actively participated and provided guidance to the Companyin all its spheres.
Retirement by rotation
Mr. Narayan K Seshadri (DIN: 00053563) Director retires by rotation at the ensuingAnnual General Meeting of the Company under Section 152(6) of the Companies Act 2013 andbeing eligible offers himself for re-appointment.
The Board of Directors at their meeting held on 11th May 2018 based on therecommendation of the Nomination and Remuneration Committee (NRC) appointed Mrs.Srilalitha Gopal (DIN: 02329790) as Managing Director of the Company liable to retire byrotation for a period of 5 years from 11th May 2018 to 10th May 2023 for a totalremuneration of $ 1.50 Cr p.a. subject to approval of the shareholders.
Both NRC and the Board observed that the proposed appointment of Mrs. Srilalitha Gopalas Managing Director satisfies the requirements of the provisions of Section 196(3) andPart I of Schedule V of Companies Act 2013.
Mrs. Srilalitha Gopal is also the Managing Director of Harita Techserv Limited(Harita) a company engaged in design engineering and skilled technical engineeringservice business since 2008. As the Managing Director of both Harita and the Company sheis entitled to draw remuneration from one or both the companies provided that the totalremuneration drawn from both the companies does not exceed the higher maximum limitadmissible from any one of such companies.
In the case of inadequacy of profits she will be paid the same proposed remunerationas the minimum remuneration subject to the maximum applicable limit under Part II SectionII Para A of Schedule V of Companies Act 2013 read with provisos thereunder based on theeffective capital of the Company.
In terms of Section 149 of Companies Act 2013 and SEBI(LODR) Regulations 2015 theCompany is required to have a woman director on its Board. Mrs. Srilalitha Gopal ManagingDirector is already on the Board of the Company from 10th November 2011 and hence theCompany fulfills the requirements of the said section.
Brief resume of Directors
The brief resume of directors proposed to be appointed and re-appointed and otherrelevant information have been furnished in the Notice of Annual General Meeting (AGM).Appropriate resolutions for their appointment and re-appointment are being placed forapproval of the shareholders at the AGM.
Key Managerial Personnel (KMPs)
In terms of Section 2(51) and Section 203 of the Companies Act 2013 Mrs. SrilalithaGopal Managing Director Mr. Prakash Katama Chief Executive Officer Mr. KarthiChandramouli Chief Financial Officer and Ms. S Nagalakshmi Company Secretary are the keymanagerial personnel of the Company as on date of this report.
Evaluation of the Board's performance
The Board has carried out an evaluation of its own performance and that of itsdirectors including Independent Directors individually and the sub committees of theBoard. The manner in which the evaluation has been carried out is explained in theCorporate Governance report.
The Company has also devised a Policy on Board Diversity detailing the functionalstrategic and structural diversity of the Board.
Nomination and Remuneration Policy
The Nomination and Remuneration Committee of the Company review the composition of theBoard to ensure that there is an appropriate mix of abilities experience and diversityto serve the interests of the shareholders of the Company.
In accordance to Section 178 of Companies Act 2013 the Nomination and RemunerationPolicy was formulated to govern the terms of nomination appointment and remuneration ofDirectors Key Managerial and Senior Management Personnel of the Company.
The Policy ensures that (a) the level and composition of remuneration is reasonable andsufficient to attract retain and motivate directors of the quality required to run theCompany successfully; (b) relationship of remuneration to performance is clear and meetsappropriate performance benchmarks; and (c) remuneration to directors key managerialpersonnel and senior management involves a balance between fixed and incentive payreflecting short and long term performance objectives appropriate to the working of theCompany and its goals. The Policy has been approved by the Nomination and RemunerationCommittee and the Board. The Remuneration Policy document as approved by the Board isavailable on the Company Website www.tvs-e.in.
M/s Deloitte Haskins & Sells Chartered Accountants (FRN:008072S) were appointed asthe Statutory Auditors of the Company at the 22nd Annual General Meeting of the Companyheld on 30th June 2017 for the first term of 5 years to hold office up to the conclusionof the 27th Annual General Meeting. in terms of the notification issued by Ministry ofCorporate Affairs dated 7th May 2018 the requirement of obtaining shareholder'sratification every year has been done away with and requires only the Board approval.Accordingly the Board of Directors of the Company at its meeting held on 11th May 2018approved their appointment for the 2nd year (2018-19) in their first term of 5 years tohold office till the conclusion of next annual general meeting.
The Company has appointed M/s. Grant Thornton India
LLP as the Internal Auditors for the year 2018-19.
In terms of Section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audits) Rules 2014 printers manufactured by the Company and falling under thespecified Central Excise Tariff Act heading are covered under the ambit of mandatory costaudits from the financial years commencing on or after 1st April 2015.
The Board of Directors appointed Mr. P Raju Iyer Cost Accountant Chennai as the CostAuditor of the Company to carry out the cost audit for 2018-19.
The Secretarial Auditors of the Company M/s. S Krishnamurthy & Co. PractisingCompany Secretaries Chennai carried out Secretarial Audit for the financial year 2017-18and the same is annexed as Annexure C.
The Company has complied with the applicable
secretarial standards during the year.
Clarification to the observations in the Secretarial Audit
The Company is in the process of identifying a suitable person for the position ofIndependent Director and the process is expected to be completed shortly. Once theappointment is made the Board composition will also be in accordance to the SEBI (LODR)Regulation 2015. The rest of the observations are self explanatory and hence does notcall for any further clarification.
Employee Stock Option Plan
During the year no stock options were granted under the Employees Stock OptionsScheme 2011. The current position of the Stock Options granted under Employees StockOption Scheme 2011 are provided in this Report as Annexure D.
The Company has obtained credit rating for the various borrowing facilities fromBrickworks Ratings India (P) Ltd. and the same has been renewed and intimated to theStock Exchanges.
Transfer to Investor Education and Protection Fund
There was no amount required to be transferred to
Investor Education and Protection Fund during the year.
Particulars of Employees and related disclosures
The particulars of the employees covered by the
provisions of Section 197 (12) of Companies Act 2013 and the rules thereunder formspart of this report. However as per the provisions of Section 136(1) of Companies Act2013 the annual report is being sent to all the members excluding this statement. Thiswill be made available for inspection at the Registered Office of the Company duringworking hours.
Comparative analysis of remuneration paid
A comparative analysis of remuneration paid to Directors and employees with theCompany's performance is given as Annexure E to this report.
The Company is well ahead in terms of e-waste management compliance directed byGovernment of India with effect from 1st May 2012. The Company has registered andauthorized collection storage and disposal centres in the required locations and hascomplied with the statutory requirements relating to E-Waste Management.
Report on energy conservation technology absorption foreign exchange and research anddevelopment
Information relating to energy conservation technology absorption foreign exchangeearned and spent and research and development activities undertaken by the Company inaccordance with the provisions of Section 134 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 are given in Annexure F to the Board's Report.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) activities have been embedded in the value systemof the Company for many decades. The Company continues to be actively engaged in CSRinitiatives for development of the society through partnerships and continued to focus onto helping lesser privileged communities in areas like education health & hygieneculture & heritage and actively participated in other welfare projects.
The provisions of Section 135 of Companies Act 2013 became applicable to the Companywith effect from 1st April 2017. Accordingly the Board of Directors of the Company attheir meeting held on 12th May 2017 constituted the CSR Committee the details of whichare provided in the Corporate Governance report.
Based on the recommendation by the CSR Committee the Board has approved the projects /programs to be undertaken as CSR activities for a sum of $ 13 Lakhs during the financialyear 2017-18. The details of CSR activities has been provided as Annexure G to thisreport.
Pursuant to Regulation 34(3) read with Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a Management Discussion and Analysis Reportand a Corporate Governance Report are made part of this Annual Report.
A Certificate from the Practising Company Secretary regarding compliance of theconditions of Corporate Governance as stipulated in SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is forming part of Annual Report.
The Company has not accepted any deposits from the public within the meaning ofSections 73 to 76 of the Companies Act 2013 for the year ended 31st March 2018.
Material changes and commitments
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.
Reporting of Fraud
During the year under review neither the statutory auditors nor the secretarialauditors has reported any instances of fraud committed against the Company by its officersor employees as specified under Section 143(12) of Companies Act 2013.
During the year under review no complaints have been received under Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013. There have beenno complaints pending for disposal.
Directors' Responsibility Statement
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory costand secretarial auditors and external consultants advisors of the Company and the reviewsperformed by Management and the relevant Board Committees including the Audit Committeethe Board is of the opinion that the Company's internal financial controls were adequateand effective during the financial year 2017-18.
The financial statements have been prepared in accordance with the Indian AccountingStandards which has become applicable to the Company with effective from 1st April 2017.
In terms of Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability further confirm:
i. that in the preparation of the annual accounts for the financial year ended 31stMarch 2018 the applicable Indian accounting standards have been followed and that therewere no material departures;
ii. that they had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year 31st March2018 and of the profits of the Company for the year under review;
iii. that they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. that they had prepared the annual accounts for the year ended 31st March 2018 on a"going concern" basis; v. that they had laid down internal financial controls
which are adequate and are operating effectively;
vi. that they had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
The Directors wish to place on record their appreciation
for the committed service of all the employees.
The Directors would also like to express their grateful appreciation for the assistanceand co-operation received from the customers dealer partners business partners bankersand its holding companies TVS Investments Private Limited and T.V.Sundram Iyengar &Sons Private Limited.
The Directors thank the Shareholders for the continued
confidence and trust placed by them in the Company.
|For and on behalf of the Board |
|Gopal Srinivasan |
|DIN: 00177699 |
11th May 2018