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TVS Motor Company Ltd.

BSE: 532343 Sector: Auto
NSE: TVSMOTOR ISIN Code: INE494B01023
BSE 00:00 | 05 Jun 359.25 4.55
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NSE 00:00 | 05 Jun 359.15 3.90
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OPEN 365.75
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VOLUME 49581
52-Week high 503.00
52-Week low 240.10
P/E 27.76
Mkt Cap.(Rs cr) 17,068
Buy Price 358.00
Buy Qty 60.00
Sell Price 359.25
Sell Qty 1055.00
OPEN 365.75
CLOSE 354.70
VOLUME 49581
52-Week high 503.00
52-Week low 240.10
P/E 27.76
Mkt Cap.(Rs cr) 17,068
Buy Price 358.00
Buy Qty 60.00
Sell Price 359.25
Sell Qty 1055.00

TVS Motor Company Ltd. (TVSMOTOR) - Director Report

Company director report

The Directors have pleasure in presenting the twenty-seventh Annual Report and theaudited accounts of the Company for the year ended 31st March 2019.

1. COMPANY PERFORMANCE

The Company continued to grow ahead of the industry registering sales of 37.6 lakhunits of two-wheelers in 2018-19 growing by 11.6% over last year. Sale of motorcyclesgrew by 15% and scooters by 14.6%. Three-wheeler sales grew by 57.6% in 2018-19 mainly onaccount of buoyant international markets. Sale of spare parts grew by 13.8%.

The Company continues to lead in customer satisfaction and has been top ranked in JDPower Two-wheeler Customer Service Index (2WCSI) since its inaugural study in 2016. TheCompany continues to delight its existing and new customers with product refreshes and newproducts. Recent new product launches like TVS NTORQ125 TVS Apache 1604V TVS Radeon TVSXL100 HD i-Touchstart continue to be well accepted by the customers.

Total revenue of the Company including other income increased from र15274.44 Crin the previous year to र 18217.46 Cr in the current year. Profit before tax (PBT)increased fromर 878.64 Cr in the previous year to र 960.96 Cr in the currentyear. Similarly Profit after tax (PAT) increased from र 662.59 Cr in the previousyear to र 670.14 Cr in 2018-19.

2. FINANCIAL HIGHLIGHTS

Details Year ended 31-03-2019 Year ended 31-03-2018
SALES
Quantitative (Numbers in lakhs)
Motorcycles 15.59 13.55
Mopeds 8.97 8.77
Scooters 13.01 11.35
Three Wheelers 1.56 0.99
Total vehicles sold 39.13 34.66
Financials (Rupees in crores)
Revenue from operations 17912.51 14966.78
Other Operating Income 297.41 208.63
Other Income 7.54 99.03
Revenue excluding excise duty 18217.46 15274.44
Excise Duty #343.22
Revenue including excise duty 18217.46 15617.66
EBITDA 1440.79 1273.99
Less:
Finance Charges & Interest (Gross) 80.56 56.62
Depreciation 399.27 338.73
Profit before tax 960.96 878.64
Provision for tax 290.82 216.05
Profit after tax 670.14 662.59

# includes excise duty upto June 2017

3. DIVIDEND

The Board of Directors of the Company (the Board) at their meeting held on 23rd October2018 declared a first interim dividend of र 2.10 per share (210%) for the year2018-19 absorbing a sum of र 120.28 Cr including dividend distribution tax. The samewas paid on 3rd November 2018.

The Board at its meeting held on 11th March 2019 declared a second interim dividend ofर 1.40 per share (140%) for the year 2018-19 absorbing a sum of र 79.70 Crincluding dividend distribution tax. The same was paid on 22nd March 2019.

Thus the total amount of both dividends for the year ended 31st March 2019 aggregatedto र 3.50 per share (350%) on 475087114 equity shares of र 1/- eachabsorbing

र 199.98 Cr including dividend distribution tax.

The Company has set-off its dividend distribution tax payable under Section 115-O(1A)of the Income Tax Act 1961 against the dividend distribution tax paid by one of itssubsidiary company on its dividend declared to the extent available. The Board does notrecommend any further dividend for the year under consideration.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENTS Two-wheeler

In the domestic market two-wheeler industry sales grew from 202 lakh units in 2017-18to 212 lakh units in 2018-19 registering a growth of 5% over last year. High uncertaintycontinues to prevail in industry. The first half of the year saw a growth of 10% intwo-wheeler industry led by growth in economy motorcycle segment. On the other handsecond half saw a decline of 0.8% led by slowdown in retail demand on account of increasedinsurance costs retail finance crunch and fuel price escalation.

Scooter as a category lost share for the first time since 2007-08. Scooters registereda marginal decline of 0.3% over 2017-18 leading to category share reduction from 33% in2017-18 to 31.6% in the year 2018-19.

The motorcycle category grew at 8% (136 lakh units) over the last year. Withinmotorcycles the premium segment grew by 13% from 18.9 lakh units in 2017-18 to 21.3 lakhunits in

2018-19. Commuting segment also grew 7% from 97 lakh units in 2017-18 to 104 lakh unitsin 2018-19.

In the international market two-wheeler industry had a growth of 17% over last year.Crude oil prices remained above र65/ bbl for most of 2018-19 touching र80/ bblin October 2018. Consistent higher crude prices during the year drove economic growth inmany international markets. Improved foreign exchange availability in Africa further aidedthe growth of export industry over last year. Latin America Africa and few countries inAsia are some of the markets where demand improvement was witnessed.

Three-wheeler

Overall three-wheeler small passenger industry (3 plus 1 segment) grew by 30% in2018-19 (from 6.4 lakh units in 2017-18 to 8.4 lakh units in 2018-19). Domestic industrygrew by 3% and exports grew by 51% over 2017-18. Export market growth was a result ofmarket recovery in Africa.

BUSINESS OUTLOOK AND OVERVIEW

Indian economic activity is expected to be at the same level of last year. RecentGovernment actions on improving income for farmers and lower middle class can supportimproved consumption.

Higher year-end inventory across trade and higher product costs due to escalatedcommodity prices of last year and advanced safety regulation implementation from April2019 can impact the industry growth in the initial part of the year.

Majorly industry will undertake a significant change in migrating from BSIV to BSVIemission norms commencing from April 1 2020. Hence in second half of 2019-20 BSVItransition will pose some challenges and the Company is gearing itself to meet the same.

Changing trade policies of USA Brexit and unforeseen challenges in Chinese economy canlead to escalation of uncertainty in global economic growth. Crude prices are expected toremain at the increased level of Q4 2018-19 during 2019-20 and may lead to higher costsfor customers and OEMs.

The trend of increased crude prices and improved exchange to local currency is expectedto aid export market growth especially in oil dependent economies.

Consequently the growth in two-wheeler industry during 2019-20 is expected to bearound 6-8% over 2018-19.

New Product Launches and Initiatives

Strategic partnership with BMW Motorrad

The Company has a strategic partnership with BMW Motorrad to develop and manufacturesub-500cc bikes both for domestic and global markets. In December 2018 the

Company also achieved a milestone of rolling out the 50000 unit of the BMW 310ccmotorcycle.

TVS NTORQ 125:

Launched in February 2018 designed for Gen-Z TVS NTORQ 125 provides a revolutionaryriding experience with cutting edge style 125cc performance and technology. The firstever Bluetooth connected scooter made TVS NTORQ a one of its kind product in this segment.

TVS NTORQ125 became one of the fastest growing scooters crossing 1 lakh sales within 6months of launch. The product continues to delight the customers and has garnered severalaccolades during the year 2018-19.

TVS Apache:

TVS Apache series crossed 3-million-global-customers milestone in September 2018.Through the years TVS Apache has stood for providing an unrivalled experience backed byits rich racing pedigree technological firsts and stylish design. The brand has over adecade developed a host of premium offerings ranging from 160cc to 310cc creatingaspiration along every step of evolution.

TVS Apache RTR160 4V the latest addition to the Apache portfolio launched in March2018 also crossed 1 lakh sales within 6 months of launch. The motorcycle continues toresonate with enthusiasts across the country thus exponentially increasing the loyalApache tribe.

During the year 2018-19 the following new products and variants were launched.

TVS Jupiter Grande:

Launched in 2013 TVS Jupiter has now reached the 3 million+ mark. TVS Jupiter Grandeis the perfect mix of style & substance. It brings in modern & contemporary stylewith a host of new features such as LED headlight with position lamp digital-analoguespeedometer an exclusive Starlight Blue colour and a luxurious cross-stitched maroonseat. It also comes with machined alloy wheels disc brakes and adjustable shocks toelevate the riding experience. The appealing chrome side panels and body coloured pillionhandle further accentuates the style quotient.

All this and more makes the Jupiter Grande edition a true example of brand Jupiter'sphilosophy 'Zyada ka Fayda' offering functionality & delight to the Indian commuter.

TVS Radeon:

Designed specifically for the new crop of progressive and discerning millennialcommuters residing in the middle India TVS Radeon offers a unique combination of sturdymetal build robust style and plush comfort. The very attractive TVS Radeon boasts ofmultiple first-in-class features and superior handling while not compromising on strengthand reliability.

TVS Radeon stands for the ambitions of a confident self-made Indian man. Within 7months of its launch the motorcycle has witnessed good customer acceptance from thetarget audience across the country as well as received critical acclaim and multipleawards.

TVS XL100 HD i-Touchstart:

XL100 has been a very successful brand since its inception in 2015. XL100 portfolio isnow very robust with XL100 Comfort XL100 HD & recently launched XL100HD iTS. Thevehicle aims to partner customers in their success by providing more utility and now moreconvenience through i-touch start feature mobile charging option "Duragrip"tyre and heavy duty wheel assembly. It is also available in a unique "MineralPurple" colour in addition to the regular colours.

TVS King Duramax 225 LC:

TVS King Duramax 225 LC is a pioneering three-wheeler development from the Companyoffering a strong value proposition for the cost conscious customer through the adoptionof advanced Liquid Cooled technology. Apart from delivering higher power torque anddouble engine life Duramax offers superior features like brightest headlamps attractivesoft top USB charger dual lockable water proof utility box and elevates the stylequotient with beige dashboard premium dual tone seats and OE fitted wheel caps.

Domestic Sales

The Company achieved sales of 31.4 lakh units of two-wheelers in the domestic market.With these sales the

Company registered a growth of 9% in 2018-19 over last year.

In domestic motorcycles the Company achieved sales of 10.1 lakh units and registered agrowth of 10.7% over 2017-18. TVS Apache continued the trend with 16% growth over lastyear. TVS Radeon was well received in the market and has significantly contributed toincreased sales in commuter motorcycles. The brand crossed sales of 1 lakh units within 7months of launch.

In domestic scooters the Company achieved sales of 12.4 lakh units and registered agrowth of 12.9% over 2017-18. The growth was largely supported by TVS NTORQ125 which hasnot only been well received by customers but has also won several accolades during theyear.

The Company has strong distribution network of authorized dealers across India andcontinuously seeks to increase its reach.

Exports sales - two-wheeler and three-wheeler

The Company's two-wheeler exports in 2018-19 were at 6.22 lakh units and witnessed animprovement with a growth of 26.4% over 2017-18.

The Company's three-wheeler exports in 2018-19 were at 1.4 lakh units and recorded a70.3% growth over 2017-18.

Opportunities and Threats

India's growing middle class with rising disposable incomes supported by low inflationin past few years sets a growth potential for two-wheeler industry. Increasing need forcommuting will continue to push the two wheeler penetration levels higher.

Aspirational lifestyle and availability of vehicle financing options are propellingdemand for premium two-wheelers. It has been a consistent trend over past few years.

In recent times competitive pressures including pricing discounts have becomeprevalent. The competitive pressures are expected to heighten until BSVI changeover onApril 1 2020. The Company will be well prepared through competitive products and actionsthat create sustained value.

The Company is also continuously evaluating and capturing opportunities ininternational markets. Company's revenues from international sales have been on consistentgrowth on the back of successful product launches robust partners and entry into newinternational markets.

Green mobility and target to become energy independent are the major factors for recentpolicy push in India. The Company is committed to support this initiative by developingsuitable technology products and business solutions.

Strong presence of the Company in all segments of two-wheeler industry planned newlaunches and expanded network of dealers will help the Company to consolidate its gainfurther and grow ahead of the Industry in the coming years.

RISKS AND CONCERNS

Good monsoon aids growth in domestic two-wheeler demand due to a significant share fromrural markets. Any negative deviation from normal monsoon is a cause of concern.

Effect of price increase due to safety norms implemented from April 1 2019 in domestictwo-wheelers above 125cc will be seen only in first half of 2019-20.

Uncertainty of demand due to upcoming emission regulation will be high in second halfof 2019-20. In order to leapfrog from BSIV to BSVI emission norms in domestic market fromApril 1 2020 product readiness supply chain readiness and dealership readiness will becrucial.

International factors such as geo-political scenarios and rising crude oil prices arebeing continuously monitored for both risks and opportunities.

The Company recognizes these risks and has developed action plans to mitigate the riskssuitably.

RISK MANAGEMENT POLICY

The Board has established a robust Risk Management framework to identify monitor andminimize risks as well as to identify business opportunities.

Risk evaluation and management is an ongoing process. As a process risks associatedwith the business are identified and prioritized based on the Company's overall riskappetite strategy severity and probability of occurrence.

The risk function is looked after by a team reporting to the CEO of the Company.Process owners are identified for each risk and metrics are developed for continuousmonitoring and minimization of risk.

The Board is satisfied that there are adequate systems and procedures in place toidentify assess monitor and manage risks. The Company's Risk Management Committee isoverseeing all the risks that the organization faces such as strategic financial marketIT legal regulatory reputational and other risks and recommends suitable action. Riskmitigation policy has been approved by the board.

OPERATIONS REVIEW

Total Quality Management (TQM)

TQM continues to be the backbone of the Company's approach for sustainable growththrough customer satisfaction. Continuous monitoring of performance measures and immediateactions to address such identified gaps have strengthened the process across the Company.

TVS way permeation has been a key focus area last year for the long term sustainabilityof the Company's business results. Various actions were implemented towards improving themanagement process quality across organization. More than 100 managers have been trainedto deliver consistent business results in their area through rigorous application of"daily work management". This was coupled with the Company's continued focus onproblem solving through certification in lean six sigma methodologies. The workmen haveparticipated in various theme based suggestion schemes i.e. Quality Safety and wasteelimination. The Company has also witnessed improvement in the quality level ofsuggestions. This has greatly contributed towards achievement of set objectives on QualityCost Delivery (QCD).

Migration to IATF16949

The Company was awarded IATF16949 certification by Bureau Veritas in July 2018.IATF16949 certification promotes inculcation of risk based thinking and proactive approachacross all functions and at all levels.

Cost Management

The Company continues to focus on all elements of cost. Raw materials components andconversion cost constitute major element of material cost. Focus on employee productivityand effectiveness of communication helps to reduce fixed cost of the Company.

Process improvement waste elimination and productivity improvements across the supplychain will continue to receive greater attention. The Company will also pursue processinnovation value engineering alternate sourcing and local sourcing to reduce materialcosts. In addition continued efforts to enhance product mix are also planned.

Research and Development

The Research and Development (R&D) team continues to focus on excellence inengineering and relevant technology development. As a result of the team's in-depthcustomer understanding and design innovations TVS Radeon a highly appealing new producthas been launched and received well in the market. The team has developed in-housetechnologies for advanced brake systems as well as collaborated with world class suppliersto deliver the entire product range with such advanced brake systems.

Technology development for achieving lower emissions in the entire range of productstowards compliance with the forthcoming BSVI emission norms has reached advanced stage andthe team is working towards timely readiness of complete product portfolio in production.The team is continuously working on many advanced engine technologies for furtherimprovements in fuel efficiency performance and to meet future emission norms forinternational and domestic markets. Work on electric powertrains is being continued with astrong focus for the future requirements.

The R&D team continues their efforts in developing cutting-edge technologies thatare relevant for the near and long term future requirements of the Company's businessplans. These developments are centered on customers emerging needs of environment safetyand sustainability. The Company also collaborates with leading research establishments andeducational institutions both within and outside the country to explore and developbreakthrough opportunities.

TVS Racing continued its high performance and winning streak during the year with 96%podium positions and 14 championship wins out of 15 participations. The racing relateddevelopment and experience has enabled many of the technology and product developmentprojects that R&D has undertaken.

Information Technology

The Company continues to implement several projects to improve its efficiencytransparency and process control across supply chain from supplier to dealer. Major focusareas are improvement of inventory turns and vehicle telematics. Various initiatives onindustry 4.0 are being adopted for improving quality productivity traceability and wasteelimination. The Company is in the process of adopting various machine learning tools forimproving quality of its products and processes.

As part of continuous improvement and technology benchmarking the Company's IT systemswere audited by external experts and recommendations were implemented. To enhanceinformation security various new IT security tools were implemented and periodic auditsare conducted by external experts and necessary control measures are taken.

The Company is ISO 27001:2013 certified for all manufacturing units and sales offices.Business continuity plan for major business and design applications has been implementedand tested. The Company is certified for ISO 22301 for Business continuity. The Companyhas been certified for CMM level 3 for its software development process.

The Company has also leveraged the digital technology to improve the quality andquantum of customer reach. Using social listening the Company is improving its customerengagement in a more effective and efficient way.

INTERNAL CONTROL 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. Company ensures adherence to all statutes.

RETURN ON NET WORTH

Particulars Standalone Consolidated
2017-18 2018-19 2017-18 2018-19
Return on Net worth (%) 25.06 21.52 25.67 22.46

The return on Net worth of 2018-19 is not strictly comparable with previous year since2017-18 includes notional fair valuation gain of र58.70 Cr on investments held bythe Company and a one-time gain on sale of investments to the tune of र18.97 Crwhich after adjusting the above notional / one-time gain works out to 22.12 % as against21.52 % of 2018-19.

Consolidated Return on Net worth is not comparable due to inclusion of subsidiaries inthe middle of previous financial year.

INTERNAL FINANCIAL CONTROL

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 the periodical testing the framework isstrengthened from time to time to ensure adequacy accuracy and completeness ofaccounting records timely preparation of reliable financial information and effectivenessof Internal Financial Controls.

Occupational Health & Safety (OHS)

The Company bagged two prestigious awards namely the Corporate Social ResponsibilityAward and Corporate Excellence Award at the CII - ITC Sustainability Awards 2018 held inDelhi. CII-ITC Sustainability Awards recognize and reward excellence in businesses thatare seeking ways to be more sustainable and inclusive in their activities.

The Company has also bagged two International Achievement Awards for Quality &Business Excellence and Green Era Award for Sustainability. The event was held in LisbonPortugal in February 2019. These International Achievement Awards recognizes Company'sfirm commitment to Quality and its true global sustainability.

Towards IT & IOT initiatives fence-line monitoring of ambient air quality wasintroduced for 8 parameters in Hosur Plant. The forms and returns under applicableEnvironmental Acts and Rules were made online.

Towards increasing the share of renewable energy over the years the Company hasinvested in group captive mode to the tune of 35 MW wind power. Also roof top solar powerof 5.0 MW solar water heating of 400 KW & solar air heating of 46 KW wereimplemented. With this Clean Development Mechanism (CDM) the renewable power contributesto 60% in overall share of power. These initiatives of renewable emissions reduction ofabout 50000 energy resulted in CO2 tons during 2018-19.

In process design efforts have been taken to minimize the generation of waste byintroduction of clean technologies viz. water based Cathod Electro Deposition (CED)process; powder coating etc. The new paint plant has been incorporated with a dry boothto overcome the usage of water. Two-wheeler paint plants in Hosur and Mysuru have VolatileOrganic Compounds (VOC) abatement in paint baking oven through Regenerative ThermalOxidizer (RTO). The waste heat from RTO is recovered and used back in the process.

The automation and advanced treatment processes have been implemented in Effluenttreatment Evaporator and Sewage treatment facilities. The waste water recycling capacityhas been increased by about 450 Kilo litres daily. The chemical sludge from waste watertreatment plants and paint sludge generated during paint application are used forco-processing in cement industry.

The Company's manufacturing plants are certified under ISO 14001: 2015 standards. TheCompany is also promoting the certification for key stakeholders suppliers dealers andcontractors. The certification is tracked and monitored at regular intervals throughenterprise resource planning software. The online system triggers are sent to suppliers onre-certification.

The Company has successfully completed 4th surveillance audit (Second year) in 4threcertification audit process of Occupational Health & Safety system throughimplementation of BS OHSAS18001:2007 standard in Hosur & Mysuru plants. This yearNalagarh plant was successfully added for OHSAS-18001 certification after implementing thesystem.

During this year as a part of continual improvement in safety around 663 proactivehazard control measures have been implemented across Hosur Mysuru and Nalagarh Plants.The Plant Safety Rating System (PSRS) score improved from 211 to 237. The Company hasachieved a reduction of 35% in frequency rate of accidents. Around 10 lakh man-hours havebeen completed with "zero injury" during civil construction activities at Hosursite last year.

Towards building a sustainable safety culture periodical safety trainings have beenorganized and 10098 employees were covered. For promoting safety the entire month ofMarch 2019 was celebrated as 'Safety Month' with various competitions. Around 600employees including contractors have actively participated and won several prizes. On theNational Safety day celebration on 4th March 2019 many of the Company's suppliers/serviceproviders were awarded for excellence in safety last year. Also as a part of "Buckleup & Strap up" - Road Safety campaign various promotional activities wereconducted last year.

HUMAN RESOURCE DEVELOPMENT (HRD)

Constituents of Human Resources Development framework followed at the Company includeWorkforce planning Employee engagement Performance & Compensation managementLearning and Development Career & Succession planning and Organization Development.Towards sustenance and delivering improved results these constituents have a structuredapproach policies and standard operating procedures which are reviewed and updatedperiodically.

Current and future skill-based competency development are planned and executed throughboth in-house programs and globally acclaimed programs continuing education challengingproject assignments and job rotations.

The Company continues to maintain its record of good industrial relations without anyinterruption in work. As on 31st March 2019 the Company had 5121 employees on its rolls.

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 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 -

i. that in the preparation of annual accounts for the financial year ended 31st March2019 the applicable Accounting Standards had been followed along with proper explanationrelating to material departures if any;

ii. that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the year under review;

iii. that the Directors had 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. that the Directors had prepared the annual accounts for the financial year ended31st March 2019 on a "going concern basis";

v. that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

vi. that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

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 community.

Over 23 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 the CSR activities.

The Committee formulated and recommended a CSR Policy in terms of Section 135 of theAct 2013 along with a list of projects / programmes to be undertaken for CSR spending inaccordance with the Companies (Corporate Social Responsibility Policy) Rules 2014.

Based on the recommendation of the CSR Committee the Board has approved the projects /programmes carried out as CSR activities by the following non-profitable organizationshaving an established track record for more than the prescribed years in undertakingsimilar programmes / projects constituting more than 2% of the average net profits of theCompany made during the three immediately preceding financial years towards CSR spendingfor the financial year 2018-19 amounting to र 13.25 Cr:

S.No. Name of the Institution Amount spent
(र in Cr)
1. Srinivasan Services Trust (SST) 9.76
2. Sri Sathya Sai Central Trust 2.60
3. National Institute of Mental Health
& Neuro Sciences (NIMHANS) 0.64
4. Voluntary Health Services (VHS) 0.25
Total 13.25

Presently SST is working in 5000 villages spread across Tamil Nadu KarnatakaMaharashtra Himachal Pradesh and Andhra Pradesh covering a population of about 31 lakhsand 7 lakh families. SST has focussed on the areas of economic development health careeducation environment and infrastructure in around 3000 villages so far. SST will focusin the other 2000 villages also so that all the areas are covered in the next 3 years.

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 2018-19 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:

Subsidiaries

1. Sundaram Auto Components Limited Chennai

2. TVS Housing Limited Chennai

3. TVS Motor Services Limited Chennai

4. TVS Credit Services Limited Chennai

5. TVS Two wheeler Mall Private Limited Chennai

6. TVS Micro Finance Private Limited Chennai

7. Harita ARC Private Limited Chennai

8. Harita Collection Services Private Limited Chennai

9. TVS Commodity Financial Solutions Private Limited Chennai

10. TVS Housing Finance Private Limited Chennai

11. TVS Motor Company (Europe) B.V. Amsterdam

12. TVS Motor (Singapore) Pte. Limited Singapore

13. PT TVS Motor Company Indonesia Jakarta

14. Sundaram Holding USA Inc Delaware USA

15. Green Hills Land Holding LLC South Carolina USA

16. Components Equipment Leasing LLC South Carolina USA

17. Sundaram - Clayton (USA) LLC South Carolina USA 18. Premier Land Holding LLCSouth Carolina USA

Associates

- Emerald Haven Realty Limited Chennai and its subsidiaries.

- Ultraviolette Automotive Private Limited Bengaluru

SUBSIDIARIES / ASSOCIATES

Sundaram Auto Components Limited (SACL)

Total revenue of SACL for the year 2018-19 was र 601.16 Cr as againstर1143.37 Cr in the previous year.

The decrease was mainly due to substantial reduction of business in automobile tradingdivision post introduction of GST effective 1st July 2017.

SACL earned a Profit before tax of र17.37 Cr during the year 2018-19 as againstर24.10 Cr in the previous year.

SACL declared an interim dividend of र 0.65 per share (6.50%) for the year ended31st March 2019 absorbing a sum of र2.82 Cr including dividend distribution tax andpaid to the Company.

National Company Law Tribunal (NCLT) Chennai approved the Scheme of Arrangement forDemerger of Automobile Trading Division (the Scheme) between Sundaram Auto ComponentsLimited (SACL) and TVS Motor Services Limited (TVS MS). TVS MS acquired automobile tradingdivision along with its relative assets and liabilities from SACL as on 1st April 2018.The Scheme was filed with the Registrar of Companies on 20th February 2019 and becameeffective from that date.

As per the Scheme TVS MS allotted 3633814 equity shares of र10/- each to theCompany as consideration for the transfer of automobile trading division by SACL on 27thFebruary 2019. Since both TVS MS and SACL are the wholly owned subsidiaries of theCompany further allotment of shares by TVS MS to the Company has not affected theirwholly owned subsidiary status.

TVS Housing Limited (TVSH) / Emerald Haven Realty Limited (EHRL)

TVS Housing Limited is a 100% subsidiary of the Company.

EHRL has till date completed construction of 1.3 Mn Sq ft of residential developmentand the total area under development as on date is 5.0 Mn Sq ft.

During the year EHRL launched new projects at Salamangalam Radial Road Porur andKolapakkam in Chennai.

During the year EHRL through its subsidiaries has acquired lands in Radial RoadKarapakkam and Manapakkam and has also been appointed as a manager for residentialdevelopment at Vengaivasal Chennai and further geographically expanded to Bengaluruthrough a joint development.

During the year EHRL earned a Profit before tax of र 7.97 Cr as against र6.56 Cr in the previous year on a consolidated basis.

PT.TVS Motor Company Indonesia (PT TVSM)

The Indonesian two-wheeler Industry grew by 14% over 2017-18. Bebek and Skubek segmentgrew by 9% and 17% respectively whereas motorcycle segment suffered negative growth of12%.

For PT TVSM the total two-wheeler sales increased from 37096 vehicles in 2017-18 to40759 vehicles in 2018-19. Total 3W sales increased from 649 units in 2017-18 to 2699units in 2018-19. Export of 3W commenced during Q3 of 2018-19.

EBITDA loss for the year 2018-19 was USD 3 Mn. as against USD 3.72 Mn. in 2017-18.

TVS Motor Company (Europe) B.V & TVS Motor (Singapore) Pte. Ltd

TVSM had earlier incorporated both these entities with a view to serve as specialpurpose vehicles for making and protecting the investments made in overseas operations ofPT TVSM.

TVS Motor Services Limited (TVS MS)

TVS MS is the investment SPV of the Company for funding TVS Credit Services Limited(TVS CS).

National Company Law Tribunal Chennai (NCLT) has approved a Scheme of Arrangement(Scheme) on 16th April 2019 for the redemption of Non-cumulative Redeemable PreferenceShares (NCRPS) issued by TVS MS. As per the Scheme TVS MS will be transferring itsinvestment in TVS CS equity shares to the NCRPS holders towards redemption. After transferof TVS CS equity shares the Company will hold 86% of equity shares in TVS CS.

TVS Credit Services Limited (TVS CS)

TVS CS is the retail finance arm of the Company for financing of two-wheelers. In linewith its long term vision of being preferred financier with diversified and profitableportfolio TVS CS added MSME finance portfolio during the year 2018-19.

During the year 2018-19 TVS CS's overall disbursements registered a growth of 44% atर7067 Cr as compared to र4899 Cr in the previous year. The assets undermanagement stood at र8335 Cr as against र6152 Cr during the previous yearthereby registering a growth of 35%. Total income during the year 2018-19 increased toर1635 Cr from र1279 Cr during the financial year an increase of 28% overthe previous year.

The Profit before tax for the year has also improved and stood at र216 Cr asagainst र206 Cr during the previous year.

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

Sundaram Holding USA Inc. (SHUI) and its subsidiaries

SACL alongwith the holding company viz. Sundaram-Clayton Limited have formed SundaramHolding USA Inc. (SHUI) a company established under the applicable provisions of Laws ofThe United States of America.

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 Commercial production would commenceduring 2019-20.

Ultraviolette Automotive Private Limited (UV)

The Company has invested a sum of र 11 Cr in the equity shares of UV and holds25.33% of the total capital of UV as on 31st March 2019. UV is a start-up company engagedin developing electric mobility solutions.

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 the Listing Regulations along with a separate statementcontaining the salient features of the financial performance of subsidiaries / associatesin the prescribed form. The audited consolidated financial statements together withAuditors' Report form part of the Annual Report. The audited financial statements of thesubsidiary companies will be made available to the Shareholders on receipt of a requestfrom any Shareholder and it has also been placed on the website of the Company. This willalso be available for inspection by the Shareholders at the Registered Office as mentionedin the Notice of AGM.

The consolidated Profit before tax of the Company and its subsidiaries & associatesamounted to र1083 Cr for the financial year 2018-19 as compared to र931 Cr inthe previous year.

9. DIRECTORS & KEY MANAGERIAL PERSONNEL

Directors appointment / re-appointment

Based on the recommendation of the Nomination and Remuneration Committee (NRC) theBoard at its meeting held on 23rd October 2018 has appointed Mrs Lalita D Gupte as anAdditional Director to comply with the requirement of having Independent Woman Director onthe Board of the Company in terms of the Listing Regulations.

On the same date Mr K N Radhakrishnan President & CEO was appointed as anAdditional Director and also as Director & CEO in the rank of Whole-time Director fora period of five years effective 23rd October 2018 based on the recommendation of theNRC. His terms of appointment and remuneration were approved by the shareholders throughPostal Ballot on 5th March 2019.

The Board at its meeting held on 30th April 2019 appointed Mr R Gopalan as anAdditional and Non-executive Independent Director of the Company based on therecommendation of the NRC effective 30th April 2019.

The Company is seeking approval of the shareholders for the appointment of Mrs Lalita DGupte and Mr R Gopalan as Independent Directors and Mr K N Radhakrishnan as Director atthe ensuing AGM.

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 everyAGM. Mr Sudarshan Venu Joint Managing Director and Mr Rajesh Narasimhan Director whohave been the longest in office are liable to retire by rotation at the ensuing AGM andbeing eligible offer themselves for re-appointment.

The Directors have recommended their appointment / reappointment for the approval ofShareholders. The brief profile of the Directors are furnished in the Notice convening theAGM of the Company.

Independent Directors (IDs)

All IDs hold office for a fixed term of five years and are not liable to retire byrotation.

At the AGM held on 14th July 2014 M/s T Kannan R Ramakrishnan C R Dua PrinceAsirvatham and Hemant Krishan Singh were appointed as IDs for the first term of fiveconsecutive years from the conclusion of the twenty second Annual General Meeting and toreceive remuneration by way of fees reimbursement of expenses for participation in themeetings of the Board and / or Committees and profit related commission in terms ofapplicable provisions of the Act 2013 as determined by the Board from time to time.

Based on the performance evaluation by both the NRC and Board all the aforesaid IDswere re-appointed by the shareholders through Postal Ballot on 5th March 2019 for thesecond term of five consecutive years from 14th July 2019 as IDs of the Company in termsof Section 149 of the Act 2013 on the same terms of appointment and remuneration by wayof fees and profit related commission if any.

The terms cover inter-alia duties rights of access to information disclosure oftheir 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 thefollowing link http://www.tvsmotor.com/pdf/Terms-of-Appointment-Independent-Directors.pdf.

Separate meeting of Independent Directors

During the year under review a separate meeting of IDs was held on 11th March 2019 andall the IDs were present at the Meeting.

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 viz.

M/s Venu Srinivasan Chairman and Managing Director Sudarshan Venu Joint ManagingDirector K N Radhakrishnan Director & CEO H Lakshmanan Dr. Lakshmi Venu and RajeshNarasimhan Directors and also of Chairman of the Board and the 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 andthoughtful inputs given by them to improve the risk management internal controls andcontribution to the Company's growth.

IDs were satisfied fully with the performance of all Non-IDs.

b) Chairman

IDs reviewed the performance of Chairman of the Board after taking into account hisperformance and benchmarked the achievement of the Company with industry under thestewardship of Chairman.

IDs also placed on record their appreciation of Chairman's visionary leadership andappreciated him as a driving force for sustaining high ethical standard and transparencyin boardroom discussions and actions and has a great ability to listen to all members andstimulate discussions to benefit the businesses and to remain contemporary and futuristicboth in the Company's operations and its processes.

They also recorded the growth story of the Company under the leadership of Chairman andsignificant increase in turnover & Profit and its effect on increased share price.

c) Board

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. Automotive Leadership / Strategy Finance Legal & Regulatory andGovernance. The Company has a Board with wide range of expertise in all aspects ofbusiness. 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 in all fronts and finally concludedthat the Board operates with best practices.

IDs have also ensued that the skills / expertise / competence of the Board of Directorsare in line with the Company's business requirement to enable it function effectively.

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 that the relationship between the top management and Board is smooth and seamless.

Key Managerial Personnel (KMP)

Director & CEO

During the year under review Mr K N Radhakrishnan President & CEO was appointedas Director & CEO in the rank of Whole Time Director for a period of five yearseffective 23rd October 2018 and the Shareholders have approved the same through PostalBallot on 5th March 2019.

Mr Venu Srinivasan Chairman and Managing Director Mr Sudarshan Venu Joint ManagingDirector Mr K N Radhakrishnan Director & CEO Mr K Gopala Desikan Chief FinancialOfficer and Mr K S Srinivasan Company Secretary are KMPs of the Company in terms ofSection 2(51) and Section 203 of the Act 2013 as on date of this Report.

Nomination and Remuneration Policy

NRC reviews the composition of the Board to ensure an appropriate mix of abilitiesexperience and diversity to serve the interests of all Shareholders of the Company.

Nomination and Remuneration Policy was approved by the Board at its meeting held on23rd September 2014 and amended from time-to-time in terms of Section 178 of the Act2013. The objective of such policy shall be to attract retain and motivate executivemanagement and devise remuneration structure to link to Company's strategic long termgoals appropriateness 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 Directorscriteria of making payments to Non-Executive Directors have been disclosed as part ofCorporate Governance Report attached herewith.

Remuneration payable to Non-executive Independent Directors

The Shareholders at the 25th AGM of the Company held on 11th August 2017 have renewedthe payment of remuneration by way of commission not exceeding 1% of the Net profits inaggregate payable to the Non-Executive

Independent Directors of the Company (NE-IDs) every year from 1st April 2018.

The Company derives substantial benefit through their expertise and advice increasedinvolvement in policy issues and also by devoting considerable time in deliberating theoperational and other issues of the Company from time to time.

Evaluation of Directors and Committees

In terms of Section 134 of the Act 2013 and the Corporate Governance requirements asprescribed under the Listing Regulations the Board reviewed and evaluated all Directors(excluding the Director being evaluated) and various Committees viz. Audit CommitteeRisk Management Committee Nomination and Remuneration Committee Corporate SocialResponsibility Committee and Stakeholders Relationship Committee based on the evaluationcriteria laid down by the NRC i.e. through a set of questionnaires.

Directors

The performance of all Directors 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 Directors have understood the opportunities and risks to theCompany's strategy and are supportive to 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 Directors as the case may be.

Committees

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 / KMPs/ SMPs;

- 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 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 approved by the Board prior toits implementation wherever necessary and there were no items where the board had notaccepted any recommendation of any committee of the board in the relevant financial year.

Details of Committees its charter functions are provided in the Corporate GovernanceReport attached to this Report. Number of Board meetings held: The number of Boardmeetings held during the financial year 2018-19 is provided as part of CorporateGovernance Report prepared in terms of the Listing Regulations.

10.AUDITORS

Statutory Auditor

The Company at its twenty sixth AGM held on 7th August 2018 re-appointed M/s V. SankarAiyar & Co. Chartered Accountants Mumbai having Firm Registration No. 109208Wallotted by The Institute of Chartered Accountants of India as Statutory Auditors of theCompany to hold office for the second term of five consecutive years from the conclusionof 26th AGM till the conclusion of 31st AGM at such remuneration in addition toapplicable taxes out of pocket expenses travelling and other expenses as may be mutuallyagreed between the Board of Directors of the Company and the Auditors.

The Statutory Auditors will continue to hold office for the 2nd year in the second termof 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 the Statutory Auditors of the Company for the year2019-20.

The Auditors' Report for the financial year 2018-19 does not contain any qualificationreservation or adverse remark and the same is attached with the annual financialstatements.

Secretarial Auditors

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 year 2018-19 given by M/s S Krishnamurthy &Co. Company Secretaries Chennai is attached to this Report. The Secretarial Audit Reportdoes not contain any qualification reservation or other remarks.

The Board at its meeting held on 30th April 2019 has re-appointed M/s. S Krishnamurthy& Co. Practising Company Secretaries Chennai having Registration No.2215 allotted bythe Institute of Company Secretaries of India as Secretarial Auditors for the financialyear 2019-20.

Cost Auditor

As per Section 148 of the Act 2013 read with the Companies (Cost Records and Audit)Rules 2014 as amended the cost audit records maintained by the Company in respect of itsengine components manufactured by the Company specified under Customs Tariff Act headingin Table B to Rule 3 of the above rules are required to be audited by a Cost Auditor.

In terms of the Companies (Cost Records and Audit) Amendment Rules 2014 the Board hasre-appointed Mr A N Raman Cost Accountant holding Certificate of Practice No. 5359allotted by The Institute of Cost Accountants of India as the Cost Auditor for conductingCost Audit for the financial year 2019-20.

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 र 6 lakhs hasbeen fixed by the Board as remuneration in addition to reimbursement of applicable taxestravelling and out-of-pocket expenses payable to him which is required to be approved andratified by the Members at the ensuing AGM as per Section 148(3) of the Act 2013.

The Company has filed the Cost Audit Report for 2017-18 on 5th September 2018 in XBRLformat with Registrar of Companies.

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 Director & Chief Executive Officer and the Chief Financial Officer of theCompany have certified to the Board on financial statements and other matters inaccordance with the Regulation 17 (8) of the Listing Regulations pertaining to CEO/CFOcertification for the financial year ended 31st March 2019.

12. BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34 of the Listing Regulations the Business ResponsibilityReport for the year 2018-19 describing the initiatives taken from an environment socialand governance perspective in the prescribed format is given as Annexure VII to thisReport and is available on the Company's website viz. https://www.tvsmotor.com/pdf/BUSINESS-RESPONSIBILITY-REPORT-2019.pdf.

13.POLICY ON VIGIL MECHANISM

The Company has adopted a Policy on Vigil Mechanism in accordance with the provisionsof 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 Board at its meeting held on 30th April 2019 made certain amendments to the WhistleBlower Policy for reporting any allegations of material nature on any leakage ofUnpublished Price Sensitive Information.

The Policy is disclosed on the Company's website in the following linkhttps://www.tvsmotor.com/pdf/Whistle-Blower-Policy-2019.pdf.

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 2019.

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:

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.

Annual Return:

Extract of the Annual Return in prescribed form is given as Annexure-II to this Reportin terms of the requirements of Section 134(3)(a) of the Act 2013 read with the Companies(Accounts) Rules 2014.

The same is available on the company's website in the following linkhttps://www.tvsmotor.com/pdf/Annual-Return-2019.pdf.

Employee's remuneration:

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 asmentioned in the Notice of AGM and any Shareholder interested in obtaining a copy of thesaid annexure may write to the Company Secretary at the Registered Office 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 the Companies (Meetings of Board and its Powers) Rules 2014.

Details of loans / guarantees / investments made:

The details of loans and guarantees under Section 186 of the Act 2013 read with theCompanies (Meetings of Board and its Powers) Rules 2014 for the financial year 2018-19are given as Annexure-VI to this Report. On loans granted to the Employees the Companyhas charged interest as per its remuneration policy.

Please refer note No. 3 to Notes on accounts for the financial year 2018-19 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.

Disclosure in terms of Sexual Harassment of Women at workplace (Prevention Prohibitionand Redressal) Act 2013

The Company has Internal Complaints Committees as required under The Sexual Harassmentof 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.

16.ACKNOWLEDGEMENT

The Directors gratefully acknowledge the continued support and co-operation receivedfrom the holding Company viz. Sundaram-Clayton Limited. The Directors also thank thebankers investing institutions customers dealers vendors and sub-contractors for theirvaluable support and assistance.

The Directors wish to place on record their appreciation of the very good work done byall the employees of the Company during the year under review.

The Directors also thank the investors for their continued faith in the Company.

For and on behalf of the Board of Directors
Chennai VENU SRINIVASAN
30th April 2019 Chairman