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Directors Report of Sundaram Finance Ltd.

Mar 31, 2015

Dear Members,

The directors have pleasure in presenting the 62 nd Annual Report with audited accounts for the year ended 31st March 2015. The summarised financial results of the Company are given hereunder:

FINANCIAL RESULTS:

(Rs. in cr.)

Particulars Year ended Year ended March 31,2015 March 31,2014

Revenue from Operations 2254.66 2215.48

Other Income 114.41 98.43

Total Revenue 2369.07 2313.91

Less: Total Expenses 1717.87 1667.28

Profit before tax 651.20 646.63

Profit after Tax 454.14 442.51

Surplus brought forward 137.70 107.95

Less: Transition provision for 4.02 - Depreciation Amount available for appropriation 587.82 550.46

Appropriations to:

- Statutory Reserve 90.83 88.50

- General Reserve 200.00 199.00

Dividend - Interim 50.00 -

Final (Proposed) 66.66 111.10

Dividend Tax 18.22 14.16

Surplus carried to balance sheet 162.11 137.70

CAPITAL RESERVE

During the year, your Company credited an amount of Rs.256.56 cr. to the Capital Reserve which pertains to the sale of 17,37,012 equity shares of the Company, held by SFL Shares Trust. The Company received the proceeds, being the sole beneficiary of the Trust. These shares accrued to the Trust on account of the merger of Lakshmi General Finance Limited with the Company, in the year 2005.

DIVIDEND

Your Company paid an interim dividend of Rs.4.50 per share (45% on the face value of Rs.10/-) in February 2015. Your directors are now pleased to recommend a final dividend of Rs.6/- per share (60% on the face value of Rs.10/-). This, together with the interim dividend, aggregates to a total dividend of Rs.10.50 per share (105% on the face value of Rs.10/-) for the financial year ended 31st March 2015, on the paid-up capital of Rs.111.10 cr.

CORPORATE GOVERNANCE

* A detailed report on corporate governance, together with a certificate from the Statutory Auditors, in compliance with Clause 49 of the Listing Agreement, is attached as part of this report vide Annexure I.

* Compliance reports in respect of all laws applicable to the Company have been reviewed by the Board of Directors.

RELATED PARTY TRANSACTIONS

During the year, the Company did not enter into any material transaction with related parties, under Section 188 of the Companies Act, 2013. All transactions entered into by the Company with the related parties were in the ordinary course of business and on an arm''s length basis. Form AOC-2, as required under Section 134 (3)(h) of the Act, read with Rule 8 (2) of the Companies (Accounts) Rules 2014, is attached as part of this report vide Annexure II (i). Further, the Company''s policy on Related Party Transactions is

attached as part of this report vide Annexure II (ii), as required under the Non-Banking Financial Companies - Corporate Governance (Reserve Bank) Directions, 2015.

CORPORATE SOCIAL RESPONSIBILITY

Your Company along with its subsidiaries and associates has always responded in a responsible manner to the growing needs of the society. A number of enriching and enlivening activities that contribute to the community in the areas of health, education, environment and preservation of the country''s rich culture and heritage have been taken up.

Annual Report on CSR Activities undertaken by the Company for the Financial Year 2014-15, is annexed with this report vide Annexure III.

BUSINESS RESPONSIBILITY REPORT

A Business Responsibility Report as required under Clause 55 of the Listing Agreement is enclosed as part of this report vide Annexure IV.

SECRETARIAL AUDIT

In terms of Section 204 of the Companies Act, 2013 and the rules thereunder, the Company has appointed M/s Damodaran & Associates as the Secretarial Auditor of the Company. Secretarial Audit Report as provided by M/s. M. Damodaran and Associates is annexed to this Report vide Annexure V.

REMUNERATION TO DIRECTORS & KMP

Disclosure pursuant to Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed vide Annexure VI.

SUNDARAM FINANCE EMPLOYEE STOCK OPTION SCHEME

Based on the recommendations of the Nomination, Compensation and Remuneration Committee, your Board of Directors have granted 14,250 stock options to its eligible employees, on 29.05.2015. The disclosure required under SEBI (Share Based Employee Benefits) Regulations, 2014, in this regard, is furnished vide Annexure VII.

EXTRACT OF ANNUAL RETURN

As required pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in MGT-9 is annexed as a part of this report vide Annexure VIII.

RESOURCE MOBILISATION

a) Deposits

During the year, your Company mobilised fresh deposits aggregating to Rs.414.35 cr. Renewal of deposits during the year amounted to Rs.629.81 cr. representing 84% of the matured deposits of Rs.742.36 cr. Deposits outstanding at the year-end were at Rs.1924.72 cr. as against Rs.1665.57 cr. in the previous year. The Net accretion for the financial year was Rs.259.15 cr. which is the highest in the history of your Company.

As at 31st March 2015, 3103 deposits amounting to Rs.17.63 cr. had matured for payment and were due to be claimed or renewed. After close follow-up, the figures are currently down to 2036 and Rs.10.56 cr. respectively. Steps are continuously being taken to arrange for repayment or renewal of these deposits. There has been no default in repayment of deposits or payment of interest thereon during the year. Investor Relation Services - Deposits continue to enjoy the ISO 9001:2008 certification from Bureau Veritas Certification (India) Private Limited.

b) Term Funding

During the year, your Company raised term funding from Banks, Mutual funds, Insurance companies and others in the form of non-convertible debentures and term loans to the tune of Rs.3878 cr., across various tenors.

c) Bank Finance

As part of the overall funding plan, your Company''s working capital limits with Consortium banks were retained at Rs. 1800 cr. During the year, your Company also issued several tranches of commercial paper aggregating to Rs.8216 cr. The maximum amount outstanding at any time was Rs.3891 cr. and the amount outstanding at the end of the year was Rs.2314 cr.

d) Assets Securitised / Assigned

During the year, your Company raised resources to the extent of Rs.1323 cr. through securitisation and assignment of hypothecation loan receivables.

CREDIT RATINGS

All the borrowings of the Company are rated. The short term borrowings (including commercial paper) are rated "A1 " (very strong degree of safety). Fixed Deposits are rated "AAA" (Highest Credit Quality). The long term borrowings are rated "AA " (High Degree of Safety), with a "Stable outlook" and are rated by ICRA, CRISIL and India Ratings.

OUTLOOK

The Central government has taken several initiatives during its first year in office, notably the transparent auctioning of the coal blocks and spectrum, the passage of the Insurance Bill, introduction of a new Financial Arm in MUDRA BANK, (Micro Units Development and Refinance Agency Bank) and steps to curb leakages in distribution of subsidies. Along with initiatives announced in the Union Budget to boost investment in infrastructure, these factors should provide a conducive framework for economic growth. RBI, for its part, has reduced the policy rates by 50 basis points (in two tranches of 25 basis points each), since January 2015.

Banks should ideally transmit the recent rate reductions of RBI into their lending rates, with a view to encourage credit offtake. However, the worrying factor is the magnitude of bad loans that have accumulated in the banking system. Based on the latest data available, NPAs and restructured assets of PSU banks accounted for more than 12% of their assets, whereas it was 4% for private sector banks. While this could make them more risk averse, lack of economic growth would exert greater pressure on their asset quality, with obvious consequences for credit expansion.

The downside risks on the external front could come from renewed economic turmoil in Europe and the reversal of QE by the Fed, which could result in slowing FII flows or worse still, a reverse flow, which would put the Rupee under heavy downward pressure, making it prohibitive for Indian companies to access global money and rendering crude oil imports more expensive. This in turn, would have implications on the inflation front and therefore, on interest rates. Closer home, uncertainty surrounding the timing, adequacy and spatial distribution of the monsoon and revival of the investment cycle are the two major concerns.

Given the above uncertain scenario, growth projections for the automotive sector pose a few challenges. Sales of M&HCVs are projected to grow at 8 to 10% in 2015-16, while LCV sales are expected to grow marginally, by 2-4%. The Society of Indian Automobile Manufacturers (SIAM) estimates a growth of 6 to 8% in the Passenger car/Utility vehicle segment. Tractor sales are expected to remain flat, at best, given the various stresses in rural India.

Against this backdrop, your Company will continue to explore profitable business opportunities, given that competition is likely to be intense, in a market that is not expected to grow at a rapid pace. As always, preservation of asset quality will remain a key imperative, especially in an environment where road transport operators'' cash flows continue to be strained. Consequently, your Company''s growth outlook remains muted, given the uncertainties in the macroeconomic environment, as also the challenges facing the automotive sector.

INTERNAL AUDIT

As part of the effort to evaluate the effectiveness of the internal control systems, your Company''s internal audit department reviews all the control measures on a periodic basis and recommends improvements, wherever appropriate. The internal audit department is manned by highly qualified and experienced personnel. As required under the Companies Act, 2013 an internal auditor had been appointed by the Board on the recommendation of the Audit committee. The Internal Auditor reports directly to the Audit Committee of the Board. The Audit Committee regularly reviews the audit findings as well as the adequacy and effectiveness of the internal control measures.

Additionally, an Information Security Assurance Service is also provided by independent external professionals. Based on their recommendations, the Company has implemented a number of control measures both in operational and accounting related areas, apart from information security related measures.

RISK MANAGEMENT

Your Company, being in the business of financing of commercial vehicles, cars, other vehicles and equipment in the retail segment, has to manage various risks. These risks include credit risk, liquidity risk, interest rate risk and operational risk. The Risk Management Committee and the Asset Liability Management Committee review and monitor these risks at periodic intervals. The Company manages credit risk through stringent credit norms established through several years of experience in this line of business and continues to follow the time tested practice of personally assessing every borrower, before committing to a credit exposure. This process ensures that the expertise in lending operations acquired by the Company over decades is put to best use and acts to mitigate credit risks. Liquidity risk and interest rate risk arising out of maturity mismatch of assets and liabilities are managed through regular monitoring of the maturity profiles. The Company monitors ALM periodically to mitigate the liquidity risk. The Company also measures the interest rate risk by the duration gap method.

Operational risks arising from inadequate or failed internal processes, people and systems or from external events are adequately addressed by the internal control systems and are continuously reviewed and monitored by a dedicated team of people. Process improvements and quality control are on-going activities and are built into the employee''s training modules, as well.

HUMAN RESOURCES

Your Company believes that its greatest assets are its people and Training is an investment in long term people development, for organisational excellence. During the year under review, your Company has taken several new initiatives to ensure that the knowledge and wisdom gained over decades is handed down to the next generation of employees. A well balanced mix of domain knowledge and behavioural training was taken up towards talent transformation. These initiatives have paid rich dividends in the form of a strong group of in- house facilitators of domain knowledge and a highly motivated team of employees geared to fulfilling the needs of your Company''s valued customers.

INFORMATION TECHNOLOGY

Your Company has a State of the Art Data Centre catering not only to its own needs but also those of its subsidiaries and associates with a capacity of over 250 servers, managed by professionals providing 24/7 support, with over 99.99% uptime. The Data Centre is accredited for ISO/IEC 27001:2013 by TUV Rheinland for Information Security Management System. The Disaster Recovery Site for all critical applications is hosted at a separate facility with near real-time data replication.

The Company has developed robust business applications on the Oracle Technology platform, catering to various business verticals such as Hire Purchase, Loans, Leasing and Deposits. For Financial Accounting and Reporting, the Company has implemented Oracle Financials and Hyperion.

The Company has taken several initiatives in developing mobile applications including "Sundaram MCollect", an application designed to process collections, which enables our Executives in the field to serve our customers at their door step. Extensive MIS and Dashboards developed in ''Project Sundaram'', the Company''s proprietary software platform, serve as key decision support tools.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints were received during the year 2014-15.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Consolidated Financial Statements, drawn up in accordance with the applicable Accounting Standards, form part of the Annual Report. A separate statement containing the salient features of the financial statements of Subsidiaries, Associates and Joint Ventures in Form AOC-I forms part of the Annual Report.

Further,

* The annual accounts of all the Subsidiary Companies have been posted on your company''s website - www.sundaramfinance.in

* Annual accounts of the Subsidiary Companies and related detailed information will be available for inspection by the members, at the registered office of the Company and will also be made available to the members upon request.

SUBSIDIARIES

* Sundaram BNP Paribas Home Finance Limited

The company approved loans aggregating to Rs.2097 cr. (Previous year Rs.2648 cr.). Reflecting the sluggishness in the real estate sector, disbursements were down 22%, at Rs.1939 cr. (PY Rs.2493 cr.). The company earned a gross income of Rs.954 cr. (PY Rs.888 cr.) and reported a profit after tax at Rs.146 cr. (PY Rs.151 cr.). the Profit after tax of the current year is not comparable as there was a Deferred Tax Liability on Special Reserve, introduced for the first time during the financial year 2014-15 to the extent of Rs. 9.59 crore. The loan portfolio under management as at 31st March 2015 stood at Rs.7486 cr. as against Rs.7112 cr. in the previous year. The gross and net NPA stood at 2.46% and 0.75% respectively as of 31.03.2015. The company proposed a dividend of 35% for the year as against 40% during the previous year.

* Sundaram Asset Management Company Limited

Sundaram Asset Management Company Limited registered a good performance, earning a gross income of Rs.149.83 cr. as against Rs.124.06 cr. in the previous year. Profit after tax at Rs.21.69 cr. registered a growth of 42% over the previous year. The Average Assets under Management of the Company were Rs.19511 cr. for the year 2014-15 as compared to Rs.15248 cr. in the previous year. The company recommended a dividend of 30% for the year, on the increased paid-up capital of Rs.20 cr.

* Sundaram Trustee Company Limited

Sundaram Trustee Company Limited earned a gross income of Rs.0.92 cr. as against Rs.1.19 cr. in the previous year and reported a profit after tax of Rs.0.39 cr. for the year, as against Rs.0.58 cr. in the previous year. The company recommended a dividend of 500% for the year as against 800% during the previous year.

* Sundaram Finance Distribution Limited (SFDL)

During the year, SFDL reported a gross income of Rs.10.95 cr. as against Rs.13.04 cr. in the previous year. The profit after tax for the year was at Rs.1.91 cr. as against Rs.2.17 cr. in the previous year. The company proposed a dividend of 250% for the year as against 300% during the previous year.

During the year, Sundaram Parekh Warehousing Services Limited, a wholly owned subsidiary of Infreight Logistics Solutions Limited (Infreight) which is a wholly owned subsidiary of SFDL, merged with Infreight, under a Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 2013, effective 1st April 2014.

* LGF Services Limited

During the year, LGF Services Limited reported a gross income of Rs.7.72 cr. as against Rs.7.53 cr. in the previous year. The profit after tax for the year was at Rs.1.49 cr. as against Rs.1.51 cr. in the previous year. The company proposed a dividend of 400% for the year, as in the previous year.

* Sundaram Infotech Solutions Limited

The company earned total revenue of Rs.16.75 cr. as against Rs.19.47 cr. in the previous year. The loss after tax for the year was at Rs.2.33 cr. as against profit after tax of Rs.0.90 cr. earned in the previous year. The company has made good progress in marketing of the next generation software solution for Lending Companies, which has received encouraging response from the market. The company has made deeper inroads into the Australian market and has also set up an office in Sharjah, UAE to tap into the potential of the Middle East market.

* Sundaram BNP Paribas Fund Services Limited

Sundaram BNP Paribas Fund Services Limited earned an income of Rs.22.02 cr. during the year, up 19% from Rs.18.54 cr. in the previous year. The company reported a loss of Rs.9.46 cr. during the year as against Rs.11.89 cr. in the previous year.

During the year, the company has made investments in software to facilitate provision of back office services to various clients in the Private Equity (PE) segment. The company has created a strong control framework in PE, based on global best practices.

The company has also been awarded the International Organisation for Standardisations (ISO) 9001 certification. With this, the company has received three certifications, ISO 9001, ISO 27001 and International Standards for Assurance Engagements (ISAE) 3402 underlining the company''s commitment to quality and continuous improvement.

* Sundaram BPO India Limited

Sundaram BPO India Limited earned a total revenue of Rs.20.19 cr. during the year as against Rs.21.06 cr. during the previous year. The company reported a profit after tax of Rs.0.72 cr. during the year, as against Rs.0.13 cr. in the previous year. During the year, a large client exited by mutual consent on account of a new operational strategy being implemented by them. However, the company was able to generate additional business from existing clients and also improve its margins. In 2015-16, the company has planned to expand its presence in the areas of finance and accounting outsourcing and customer service voice operations.

* Sundaram Business Services Limited (SBSL)

During the year, SBSL earned a revenue of Rs. 24.03 cr. as compared to Rs.21.36 cr. in the previous year. However, the company''s performance was impacted by adverse movement of Australian Dollar. The company reported a loss of Rs.1.70 cr. during the year as against Rs.2.90 cr. in the previous year.

JOINT VENTURES

* Royal Sundaram Alliance Insurance Company Ltd (Royal Sundaram)

Royal Sundaram reported an increase of 9% in Gross Written Premium (GWP) at Rs.1569 cr. as compared to Rs.1437 cr. in the previous year. Profit after tax was Rs.21.99 cr. during the year, as against Rs.68.24 cr. in the previous year. The profit margins were impacted due to continued drop in the premium rates in both the retail and commercial segments, due to severe competition.

During the year, your Company and RSA Group, UK, reached an agreement whereby RSA has agreed to sell its entire 26% equity stake in Royal Sundaram Alliance Insurance Company Limited (Royal Sundaram) to your Company for a consideration of Rs.450 cr., subject to all regulatory approvals. The Company currently holds 49.90% in Royal Sundaram and the said acquisition would increase its holding to 75.90%.

* BNP Paribas Sundaram Global Securities Operations Private Limited

BNP Paribas Sundaram Global Securities Operations Private Limited earned a total revenue of Rs.150.28 cr. during the year as against Rs.124.79 cr. in the previous year. The company reported a profit after tax of Rs.11.91 cr. during the year, as against Rs.9.78 cr. in the previous year. The company has declared an interim dividend of 117% for the year ended 31st March 2015 as against final dividend of 101% for the previous year.

BOARD & AUDIT COMMITTEE

The details regarding number of board meetings held during the financial year and composition of Audit Committee is furnished in the Corporate Governance Report.

DIRECTORS

Sri S Viji and Sri S Ram retire by rotation and, being eligible, offer themselves for re-election.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149 (6).

ANNUAL EVALUATION BY THE BOARD

The Board has made a formal evaluation of its own performance and that of its committees and individual directors as required under Section 134(3) (p) of the Companies Act, 2013.

AUDITORS

M/s Brahmayya & Co., Chartered Accountants, Chennai, retire and are eligible for re-appointment. A certificate from the Auditors that they satisfy the conditions prescribed under the Companies Act, 2013 and the Rules made thereunder (including satisfaction of criteria under Section 141 of the Companies Act, 2013), has been received from them.

INFORMATION AS PER SECTION 134 (3) (m) OF THE COMPANIES ACT, 2013 READ WITH RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014

Your Company has no activity relating to conservation of energy or technology absorption. During 2014-15, expenditure in foreign currencies amounted to Rs.110.92 lakhs. Foreign Currency earnings amounted to Rs.15.50 cr.

PERSONNEL

In accordance with the provisions of first proviso to Section 136 (1) of the Companies Act, 2013, the Directors'' Report is being sent to all the shareholders of the Company excluding the statement prescribed under Rule 5 (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said statement is available for inspection by the Members at the Registered Office of the Company during office hours till the date of the Annual General Meeting.

AWARDS AND RECOGNITION

Your Company has been listed as one of ''India''s Top 500 Companies 2015'' by Dun & Bradstreet Information Services India Pvt. Ltd.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year 2014-15, no significant and material Orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and company''s operations in future.

INTERNAL FINANCIAL CONTROLS

The Company has a well-established internal financial control and risk management framework, with appropriate policies and procedures, to ensure the highest standards of integrity and transparency in its operations and a strong corporate governance structure, while maintaining excellence in services to all its stakeholders. Appropriate controls are in place to ensure: (a) the orderly and efficient conduct of business, including adherence to policies, (b) safeguarding of assets, (c) prevention and detection of frauds / errors, (d) accuracy and completeness of the accounting records and (e) timely preparation of reliable financial information.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

2. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the Company for that period;

3. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The directors had prepared the annual accounts on a going concern basis;

5. The directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your directors gratefully acknowledge the support and co-operation extended to your Company by all the customers, depositors, shareholders, bankers, mutual funds, automotive manufacturers and vehicle dealers.

Your directors also place on record their appreciation of the tireless efforts of Team Sundaram, a dedicated and loyal band of people who have displayed unswerving commitment to their work in these challenging times and helped the Company deliver good results.

For and on behalf of the Board Chennai 600 002 S VIJI 29th May 2015 Chairman


Mar 31, 2013

The directors have pleasure in presenting the 60th Annual Report with audited accounts for the year ended 31st March 2013. The summarised financial results of the Company are given hereunder:

FINANCIAL RESULTS:

(Rs. in cr.)

Particulars Year ended Year ended March 31, 2013 March 31, 2012

Revenue from Operations 2063.02 1698.71

Other Income 68.76 60.39

Total Revenue 2131.78 1759.10

Less: Total Expenses 1539.17 1246.95

Profit before Tax 592.61 512.15

Profit after Tax 410.11 355.45

Surplus brought forward 67.56 60.14

Amount available for appropriation 477.67 415.59

Appropriations have been made as under:

Transfers to:

- Statutory Reserve 82.02 71.10

- General Reserve 174.88 179.45

Dividend - Interim 50.00 41.67

Final (Proposed) 50.00 44.44

Dividend Tax 12.82 11.37

Surplus carried to balance sheet 107.95 67.56

477.67 415.59

DIVIDEND

Your Company paid an interim dividend of Rs. 4.50 per share (45% on the face value of Rs. 10/-) in February 2013. Your directors are now pleased to recommend a final dividend of Rs. 4.50 per share (45% on the face value of Rs. 10/-). This, together with the interim dividend, aggregates to a total dividend of Rs. 9/- per share (90% on the face value of Rs. 10/-) for the financial year ended 31st March 2013, on the enhanced paid-up capital of Rs. 111.10 cr., as a result of the bonus issue in the ratio of 1:1, in December 2012.

CORPORATE GOVERNANCE

- A detailed report on corporate governance, together with a certificate from the Statutory Auditors, in compliance with Clause 49 of the Listing Agreement, is attached as part of this report.

- Compliance reports in respect of all laws applicable to the Company have been reviewed by the Board of Directors.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements, drawn up in accordance with the applicable Accounting Standards, form part of the Annual Report.

In accordance with the general exemption granted by the Central Government under Section 212(8) of the Companies Act, 1956, the Balance Sheet, Statement of Profit and Loss, Report of the Board of Directors and Report of the Auditors of the Subsidiary Companies, are not attached to the Balance Sheet of your Company. The financial information relating to all the Subsidiary Companies, in the aggregate, has been disclosed in the consolidated financial statements, as required. Further,

- The annual accounts of all the Subsidiary Companies have been posted on your Company''s website - www.sundaramfinance.in.

- Annual accounts of the Subsidiary Companies and related detailed information will be available for inspection by the members, at the head offices of the Company and the Subsidiary Companies concerned and will also be made available to the members upon request.

SUBSIDIARIES

- Sundaram BNP Paribas Home Finance Limited

The Company reported another year of excellent performance. The Company approved loans aggregating to Rs. 2847 cr. as against Rs. 2248 cr. in the previous year (PY), while disbursements at Rs. 2572 cr. (PY Rs. 1948 cr.), grew significantly by 32%. The Company earned a gross income of Rs. 692 cr. (PY Rs. 485 cr.) and reported an impressive 35% growth in profit after tax at Rs. 126.55 cr. (PY Rs. 93.73 cr.). The loan portfolio as at 31st March 2013 stood at Rs. 5902 cr. as against Rs. 4226 cr. in the previous year. The gross and net NPA stood at 0.77% and 0.23% respectively as of 31.03.2013, clearly one of the best in the industry. The Company proposed a higher dividend of 35% for the year as against 25% during the previous year.

- Sundaram Asset Management Company Limited

Sundaram Asset Management Company Limited earned a gross income of Rs. 118.30 cr. as against Rs. 105.10 cr. in the previous year and reported a profit after tax of Rs. 16.86 cr. as against Rs. 11.00 cr. in the previous year. The Average Assets under Management of the Company were Rs. 13574 cr. for the year 2012-13 as compared to Rs. 14226 cr. in the previous year and the investor base stood at 1.63 million. The Company recommended a dividend of 30% for the year as against 20% during the previous year.

- Sundaram Trustee Company Limited

Sundaram Trustee Company Limited earned a gross income of Rs. 1.27 cr. as against Rs. 1.34 cr. in the previous year and reported a profit after tax of Rs. 0.40 cr. for the year, as against Rs. 0.46 cr. in the previous year. The Company recommended a dividend of800% for the year, in line with the previous year.

- Sundaram Finance Distribution Limited (SFDL)

During the year, SFDL earned revenue from operations of Rs. 12.39 cr. as against Rs. 7.56 cr. in the previous year. The profit after tax for the year was at Rs. 0.73 cr. as against Rs. 2.36 cr. in the previous year. The Company recommended a dividend of 100% for the year.

- LGF Services Limited

During the year, LGF Services Limited earned revenue from operations of Rs. 6.46 cr. as against Rs. 5.51 cr. in the previous year. The profit after tax for the year was at Rs. 0.79 cr. as against Rs. 1.72 cr. in the previous year. The Company recommended a dividend of 200% for the year.

- Sundaram Infotech Solutions Limited (SISL)

The Company earned total revenue of Rs. 32.79 cr. as against Rs. 25.43 cr. in the previous year. The profit after tax for the year was at Rs. 6.54 cr. as against Rs. 0.18 cr. in the previous year. The Company has made significant progress towards developing the next generation software solution for Lending Companies. The Company has made deeper inroads into the Australian market and has also set up an office in Sharjah, UAE to tap into the potential of the Middle East market.

- Sundaram BNP Paribas Fund Services Limited

Sundaram BNP Paribas Fund Services Limited earned an income of Rs. 14.57 cr. during the year, which was higher by 21.59% as against Rs. 11.98 cr. in the previous year. The Company reported a loss of Rs. 13.78 cr. during the year as against Rs. 14.51 cr. in the previous year.

During the year, the Company has secured the ISO 27001:2005 certification of its Information Security Management System covering the entire gamut of services offered. The Company achieved an overall quality processing level of above 99% which is a benchmark in the industry.

- Infreight Logistics Solutions Limited (Infreight)

Consequent to the management''s decision to exit the logistics business, contracts which expired were not renewed. Therefore, the revenue of Infreight during the year dropped sharply to Rs. 0.89 cr. as against Rs. 8.69 cr. in the previous year. The Company incurred a loss of Rs. 0.05 cr. during the year as against profit of Rs. 1.77 cr. earned during the previous year.

- Sundaram BPO India Limited

In order to centralise the domestic BPO operations under one umbrella, Sundaram BPO India Limited was incorporated as a subsidiary of your Company on 7th August 2012.

Sundaram Business Services Limited moved its India- centric business to Sundaram BPO India Limited with effect from 1st October 2012.

Further, the subsidiaries which were engaged in India- centric business, Professional Management Consultants Limited and Caltec Servicez Private Limited, were merged with Sundaram BPO India Limited with effect from 1st October 2012, pursuant to the Order passed by the Honourable High Court of Judicature at Madras on 26th April 2013.

The Company earned a gross income of Rs. 11.07 cr. for the period 7th August 2012 to 31st March 2013 and posted profit before tax of Rs. 0.14 cr.

- Sundaram Business Services Limited (SBSL)

During the year, SBSL earned revenue of Rs. 25.29 cr. as compared to Rs. 27.15 cr. in the previous year. The drop in revenue was on account of the transfer of all the domestic business of the Company to Sundaram BPO India Limited effective 1st October 2012.

As against a profit before tax of Rs. 1.06 cr. last year, SBSL has posted a loss Rs. 0.70 cr. before taxes. The loss was occasioned by increased investments towards business development in new markets which are expected to help the Company grow in the coming years.

- Professional Management Consultants Limited (PMC)

During the period ended 30th September 2012, PMC earned revenues of Rs. 1.91 cr. as compared to Rs. 6.13 cr. for the financial year ended 31st March 2012. The Company was merged with Sundaram BPO India Limited with effect from 1st October 2012, pursuant to the Order passed by the Honourable High Court of Judicature at Madras on 26th April 2013.

- Caltec Servicez Private Limited (Caltec)

During the period ended 30th September 2012, Caltec earned revenues of Rs. 2.15 cr. as compared to Rs. 4.98 cr. for the financial year ended 31st March 2012. The Company was merged with Sundaram BPO India Limited with effect from 1st October 2012, pursuant to the Order passed by the Honourable High Court of Judicature at Madras on 26th April 2013.

- Other Subsidiaries

The financials of Sundaram Parekh Warehousing Services Limited, Sundaram Insurance Broking Services Limited and Sundaram Asset Management Singapore Pte. Limited which have not yet commenced their core business operations are furnished in the statement giving financial information of subsidiary companies.

JOINT VENTURES

- Royal Sundaram Alliance Insurance Company Ltd. (Royal Sundaram)

Royal Sundaram reported an impressive profit after tax of Rs. 54.67 cr. during the year. The Gross Written Premium (GWP) was Rs. 1560 cr. as compared to Rs. 1479.79 cr. in the previous year. The Company has been able to balance prudent selection and pricing of risks resulting in focus on profitable growth. During the year, the shareholders of Royal Sundaram infused additional capital of Rs. 40 cr. taking the total paid-up capital of the Company to Rs. 315 cr.

- BNP Paribas Sundaram Global Securities Operations Private Limited

BNP Paribas Sundaram Global Securities Operations Private Limited earned total revenue of Rs. 108.28 cr. during the year as against Rs. 76.95 cr. in the previous year. The Company reported a profit after tax of Rs. 8.87 cr. during the year, as against Rs. 8.54 cr. in the previous year. The Company recommended a dividend of 91% for the year ended 31st March 2013 as against 89% for the previous year.

DIRECTORS

Sri S Ram, Sri Srinivas Acharya and Sri T T Srinivasaraghavan retire by rotation and, being eligible, offer themselves for re-election.

AUDITORS

M/s Brahmayya & Co., Chartered Accountants, Chennai, retire and are eligible for re-appointment. A certificate under Section 224(1B) of the Companies Act, 1956 has been received from them.

INFORMATION AS PER SECTION 217(1) (e) OF THE COMPANIES ACT, 1956

Your Company has no activity relating to conservation of energy or technology absorption. During 2012-13, expenditure in foreign currencies amounted to Rs. 4.54 cr. on account of interest and other charges. Foreign Currency earnings amounted to Rs. 13.31 cr.

PERSONNEL

In accordance with the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Directors'' Report is being sent to all the shareholders of the Company excluding the annexure prescribed under Section 217 (2A) of the Companies Act. The said annexure is available for inspection by the Members at the Registered Office of the Company during office hours till the date of the Annual General Meeting.

SUNDARAM FINANCE EMPLOYEE STOCK OPTION SCHEME

Based on the recommendations of the Compensation and Remuneration Committee, your Board of Directors have granted 18,000 stock options to its eligible employees, on 29.05.2013. The disclosure required under SEBI Guidelines, in this regard, is furnished in the Annexure.

BUSINESS RESPONSIBILITY REPORT

SEBI, vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, has mandated the top 100 listed entities, based on market capitalisation at BSE and NSE, to include Business Responsibility Report (BRR) as part of the Annual Report, describing the initiatives taken by them from Environmental, Social and Governance perspectives.

Though not mandatorily required to present the BRR, your Company has, as a measure of good governance, presented it as part of this report.

CORPORATE SOCIAL RESPONSIBILITY

Your Company along with its subsidiaries and associates (Sundaram Finance Group) is involved in a number of community focused activities in the areas of health, education and preservation of the country''s rich culture and heritage.

Healthcare

In the healthcare sector, the Group has established the Sundaram Medical Foundation, a non-profit Trust that runs the Dr. Rangarajan Memorial Hospital. The primary objective of this community centric hospital is to deliver affordable, high quality health care services. Within a span of almost two decades, the Sundaram Medical Foundation has established itself as a centre for clinical and academic excellence. It occupies an eminent position in the healthcare sector of India as a model of cost-conscious, affordable, healthcare delivery and corporate involvement in social projects.

For the past 14 years, the Group has been associated with the Hindu Mission Hospital in Tambaram, Chennai that caters to the medical needs of under-served rural communities. It regularly conducts free rural mobile clinics with the help of its 400 medical and paramedical staff.

Cancer, schizophrenia, kidney and ophthalmic care are some of the other health care causes that the Group supports through organisations such as the Cancer Institute, Cancer Relief Society, Schizophrenia Research Foundation, Tanker Foundation and Sankara Nethralaya.

Education

The Group has been supporting the activities of several schools, colleges, Universities and NGOs, such as the The Kuppuswami Sastri Research Institute, Central Chinmaya Mission Trust, Vidya Mandir, Ramakrishna Mission Students Home, Swami Vivekananda Rural Development Society, Laxmi Charities, Kuruvilla Jacob Memorial Educational Trust, Madras School of Economics, Vivekananda College, SASTRA University and the University of Madras.

Culture, Heritage and Children''s Development

Your Company is involved in a wide spectrum of activities aimed at encouraging children''s participation in art and craft, music and personality development, through year round programmes. The Company is also closely involved with the ''Sundaram Finance Mylapore Festival'', a popular annual festival in Chennai that showcases folk art, music and dance, again with emphasis on children.

Environment

Your Company was one of the earliest to adopt a public park, the Nageswara Rao Park in Mylapore, Chennai. The upkeep and maintenance of the park have come in for wide appreciation from the media and local community, alike.

Your Company initiated the Solar Energy Project in 2011 with a view to participate in the development of renewable energy, which is a pressing need for the country. Your Company has taken up this initiative in several branches across the country, as well as the Head Office at Chennai. The installed capacity of Solar energy as at 31st March was 110 Kv and plans are afoot to add to this in the current year.

Sundaram Finance Group has adopted an eco-friendly e-waste management and disposal process for all its electrical and electronic assets in order to nurture the spirit of a Pollution- free Green World.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed;

2. They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. They have prepared the annual accounts on a going- concern basis.

ACKNOWLEDGEMENT

Your directors gratefully acknowledge the support and co- operation extended to your Company by all the customers, depositors, shareholders, bankers, mutual funds, automotive manufacturers and vehicle dealers.

Your directors also place on record their appreciation of the tireless efforts of Team Sundaram, a dedicated and loyal band of people who have displayed unswerving commitment to their work in these challenging times and helped the Company deliver strong results.

For and on behalf of the Board

Chennai 600 002 S VIJI

29th May 2013 Chairman


Mar 31, 2012

The directors have pleasure in presenting the 59th Annual Report with audited accounts for the year ended 31st March 2012. The summarised financial results of the Company are given hereunder:

FINANCIAL RESULTS:

(Rs in Cr.)

Particulars Year ended Year ended March 31, 2012 March 31, 2011

Revenue from Operations 1701.43 1370.17

Other Income 60.45 80.24

Total Revenue 1761.88 1450.41

Less: Total Expenses 1249.73 1020.96

Profit before Tax 512.15 429.45

Profit after Tax 355.45 295.23

Surplus brought forward 60.14 61.02

Amount available for appropriation 415.59 356.25

Appropriations have been made as under:

Transfers to:

- Statutory Reserve 71.10 59.10

- General Reserve 179.45 154.79

Dividend - Interim 41.67 38.89

Final (Proposed) 44.44 38.89

Dividend Tax 11.37 4.45

Surplus carried to balance sheet 67.56 60.13

415.59 356.25

DIVIDEND

Your Company paid an interim dividend of Rs 7.50/- per share (75% on the face value of Rs 10/-) in February 2012. Your directors are now pleased to recommend a final dividend of Rs 8/- per share (80% on the face value of Rs 10/-). This, together with the interim dividend, aggregates to a total dividend of Rs 15.50 per share (155% on the face value of Rs 10/-) for the financial year ended 31st March 2012, on the paid-up capital of Rs 55.55 cr.

CORPORATE GOVERNANCE

- A detailed report on corporate governance, together with a certificate from the Statutory Auditors, in compliance with Clause 49 of the Listing Agreement, is attached as part of this report.

- Compliance reports in respect of all laws applicable to the Company have been reviewed by the Board of Directors.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements, drawn up in accordance with the applicable Accounting Standards, form part of the Annual Report.

In accordance with the general exemption granted by the Central Government under Section 212(8) of the Companies Act, 1956 in February 2011, the Balance Sheet, Profit and Loss Statement, Report of the Board of Directors and Report of the Auditors of the Subsidiary Companies, are not attached to the Balance Sheet of your Company. The financial information relating to all the Subsidiary Companies, in the aggregate, has been disclosed in the consolidated financial statements, as required. Further,

- The annual accounts of all the Subsidiary Companies have been posted by your Company on its website - www. sundaramfinance.in.

- Annual accounts of the Subsidiary Companies and related detailed information will be available for inspection by the members, at the head offices of the Company and the Subsidiary Companies concerned and will also be made available to the members upon request.

SUBSIDIARIES

- Sundaram BNP Paribas Home Finance Limited

The company, approved loans aggregating to Rs 2248 cr. as against Rs 1447 cr. in the previous year (PY), while disbursements at Rs 1948 cr. (PY Rs 1207 cr.), grew significantly by 61%. The company earned a gross income of Rs 495 cr. (PY Rs 308 cr.) and reported an impressive 100% growth

in profit after tax at Rs 93.73 cr. (PY Rs 47.68 cr.). The loan portfolio as at 31st March 2012 stood at Rs 4241 cr. as against Rs 2940 cr. in the previous year. The gross and net NPA stood at 0.31% and 0.06% respectively as of 31.03.12, clearly one of the best in the industry. The company proposed a higher dividend of 25% for the year as against 15% during the previous year.

- Sundaram Asset Management Company Limited.

The Average Assets under Management (AUM) of Sundaram Asset Management Company Ltd. were Rs 14226 cr. for the year 2011-12 as compared to Rs 13946 cr. in the previous year. The investor base of Sundaram Asset Management Company Limited stands at 1.99 million.

Sundaram Asset Management Company Limited earned a gross income of Rs 105.10 cr. as against Rs 122.40 cr. in the previous year. Reflecting the volatility in the stock market, the company reported a profit after tax of Rs 11.00 cr. as against Rs 13.36 cr. in the previous year. The company recommended a dividend of 20% for the year as against 25% during the previous year.

- Sundaram Trustee Company Limited

Sundaram Trustee Company Limited earned a gross income of Rs 133.92 lakhs as against Rs 129.18 lakhs in the previous year and reported a profit after tax of Rs 45.81 lakhs for the year, as against Rs 41.01 lakhs in the previous year. The company recommended a dividend of 800% for the year, in line with the previous year.

- Sundaram Finance Distribution Limited (SFDL)

During the year, SFDL earned revenue from operations of Rs 7.56 cr. as against Rs 7.79 cr. in the previous year. The profit after tax for the year was at Rs 2.36 cr. as against Rs 54.33 cr. (which included profit on sale of shares of Rs 50.15 cr.) in the previous year. The company recommended a dividend of 250% for the year as against 7770% during the previous year.

- LGF Services Limited

During the year, LGF Services Limited earned revenue from operations of Rs 5.51 cr. as against Rs 4.95 cr. in the previous year. The profit after tax for the year was at Rs 1.72 cr. as against Rs 1.92 cr. in the previous year. The company recommended a dividend of 500% for the year, in line with the previous year.

- Sundaram Infotech Solutions Limited (SISL)

The company earned total revenue of Rs 25.43 cr. as against Rs 21.25 cr. in the previous year. The profit after tax for the year was at Rs 0.18 cr. as against Rs 0.83 cr. in the previous year.

The company added 14 new clients during the year and made deeper inroads into the Australian market. During the year, the company made significant progress towards developing the next generation software solution for Lending Companies.

- Sundaram Business Services Limited (SBSL)

During the year, SBSL's revenue increased to Rs 27.15 cr. as compared to Rs 22.89 cr. in the previous year. The continued focus on cost efficiency and better capacity utilization has resulted in SBSL making a profit of Rs 1 cr. during the year as against a net loss of Rs 1.51 cr. during the previous year. Initiatives are underway to grow the top line through new verticals like mortgage processing, Equity Research and financial planning back office. SBSL is also exploring opportunities in other geographies and is working towards building a robust platform for future growth.

- Professional Management Consultants Limited (PMC)

During the year, PMC earned revenues of Rs 6.13 cr. as compared to Rs 4.84 cr. in the previous year. Some of PMC's transaction processing clients have moved out during the year due to a scaling down of their operations and this is expected to adversely impact the revenues of PMC for the coming year. PMC has ended the year with a loss of Rs 2.68 cr. as against a net profit of Rs 0.02 cr. in the previous year. The higher losses were largely on account of set up costs incurred for the call centre business, as PMC had established new delivery centres for handling voice processes. PMC is working on growing top line, surrendering surplus capacity and on improving efficiencies, to address the loss.

- Sundaram BNP Paribas Fund Services Limited

Sundaram BNP Paribas Fund Services Limited successfully completed the second and final process of migration in relation to the balance schemes of Sundaram Asset Management Company Limited from its existing service provider and the operations in respect of those schemes went live with effect from 6th June 2011. During the year, the company managed various new schemes and New Fund Offers (NFO). The company earned an income of Rs 11.98 cr. during the year which was higher by 228% as against Rs 3.66 cr. in the previous year. The company reported a loss of Rs 14.51 cr. during the year as against Rs 17.02 cr. in the previous year.

- Infreight Logistics Solutions Limited (Infreight)

The revenue of Infreight during the year was Rs 8.69 cr. as against Rs 19.16 cr. in the previous year. Profit for the year was at Rs 1.77 cr. as against loss of Rs 1.27 cr. in the previous year.

Infreight became a wholly-owned subsidiary of SFDL and therefore of your Company, consequent to the acquisition of the balance 21.41% stake by SFDL from the promoters of Infreight.

During the year, the transition of contracts relating to select transportation clients was completed and the consideration received was utilised for the purpose of repaying loans to Bank as well as inter-corporate loans taken to meet the working capital requirements of the company.

- Sundaram Parekh Warehousing Services Limited

The company was incorporated in August 2010 with the objective of providing full fledged high-end warehousing services across the country. This year, in view of the market not being very conducive, the company has stayed away from taking on any large warehousing services. On the other hand, the company recorded a modest turnover from the transportation segment, to the tune of Rs 0.38 cr. and with a profit of Rs 0.04 cr.

- Sundaram Insurance Broking Services Limited

Sundaram Insurance Broking Services Limited would commence business in due course after getting necessary regulatory approvals.

- Caltec Servicez Private Limited (Caltec)

During the year, SFDL acquired 51% stake in Caltec Servicez Private Limited, Mumbai. Consequent to the said acquisition, Caltec became a subsidiary of SFDL and therefore of your Company with effect from 31st October 2011.

Caltec is engaged in providing call centre and other related solutions. The company's revenue for the year was Rs 4.97 cr. as against Rs 6.74 cr. in the previous year. The fall in revenue by 25% from previous year was primarily due to drop in volume from few existing clients and the loss of some clients. Operations during the year resulted in net loss of Rs 1.26 lakhs as against net profit of Rs 53.88 lakhs in the previous year. Several initiatives are being taken to increase revenues and put Caltec on the path to sustained profitability.

JOINT VENTURES

- Royal Sundaram Alliance Insurance Company Ltd (Royal Sundaram)

Royal Sundaram posted a top-line growth of 29%, outpacing the industry growth, with a Gross Written Premium (GWP) of Rs 1479.79 cr. during the year, as compared to the GWP of Rs 1143.99 cr. in the previous year.

During the year, IRDA issued guidelines relating to the methodology of absorption of the past losses relating to the third party motor pool. Insurance companies were provided with an option to either fully absorb the prior year losses as per the loss ratios indicated by the Regulator in one go or absorb the entire losses of 2007-08 and 2008-09 fully in their books and absorb 1/3rd of the losses in respect of the years 2009-10, 2010-11 and 2011-12. The balance 2/3rd was permitted to be amortised and absorbed over the next two financial years.

Based on the above Circular of IRDA, Royal Sundaram decided to absorb as much of the losses as possible, during the current year itself. Accordingly, the company has provided for a higher amount of Rs 222.49 cr. towards third party Motor Pool losses, leaving a sum of Rs 76.29 cr. to be absorbed in the next two financial years. Hence, after making provision for tax and motor pool losses, the company reported a profit of Rs 22 lakhs for the year as against loss of Rs 20.1 cr. in the previous year.

- BNP Paribas Sundaram Global Securities Operations Private Limited

BNP Paribas Sundaram Global Securities Operations Private Limited earned total revenue of Rs 76.95 cr. during the year as against Rs 53.31 cr. in the previous year. The company reported a profit after tax of Rs 8.54 cr. during the year, as against Rs 6.42 cr. in the previous year. The company recommended a dividend of 89% for the year ended 31st March 2012 as against 67% for the previous year.

DIRECTORS

Your Board of Directors has re-appointed Sri T.T. Srinivasaraghavan as Managing Director for a further period of 5 years with effect from 1st April 2013.

Sri S Viji, Sri S Prasad and Sri Aroon Raman retire by rotation and, being eligible, offer themselves for re-election.

AUDITORS

M/s Brahmayya & Co., Chartered Accountants, Chennai, retire and are eligible for re-appointment. A certificate under Section 224(1B) of the Companies Act, 1956 has been received from them.

INFORMATION AS PER SECTION 217(1) (e) OF THE COMPANIES ACT, 1956

Your Company has no activity relating to conservation of energy or technology absorption. During 2011-12, expenditure in foreign currencies amounted to Rs 10.00 cr. on account of interest and other charges. Foreign Currency earnings amounted to Rs 3.76 cr.

PERSONNEL

In accordance with the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Directors' Report is being sent to all the shareholders of the Company excluding the annexure prescribed under Section 217(2A) of the Companies Act. The said annexure is available for inspection by the Members at the Registered Office of the Company during office hours till the date of the Annual General Meeting.

SUNDARAM FINANCE EMPLOYEE STOCK OPTION SCHEME

Your Board of Directors, based on the recommendations of the Compensation and Remuneration Committee, granted 16,750 stock options to its eligible employees, on 28.05.2012. The disclosure required under SEBI Guidelines, in this regard, is furnished in the Annexure.

DIRECTORS' RESPONSIBILITY STATEMENT

Your directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed;

2. They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. They have prepared the annual accounts on a going-concern basis.

CORPORATE SOCIAL RESPONSIBILITY

In giving back to society, the Sundaram Finance Group is committed to a number of community focused activities. These activities are spread over different areas such as health, education, environment, promotion of the country's rich culture and sports. Each one of the programmes or projects that the Group is involved in, reflects the commitment, concern, and care that it always has for society.

Healthcare

Your Company has been closely involved with the Sundaram Medical Foundation, a non-profit Trust that runs the Dr. Rangarajan Memorial Hospital, in Chennai, which has become a centre for clinical and academic excellence. The primary objective of this community centric hospital is to deliver affordable, high quality health care services. The hospital lays great emphasis on maintaining quality standards. Amongst the many ratings it has received, is the H-1 rating by ICRA for best quality healthcare in the general hospital - medium size category.

While the Sundaram Medical Foundation caters mostly to the health needs of people living in the city, the Group has also been associated with the Hindu Mission Hospital, Chennai to take health care to the rural communities. Your Company also supports other healthcare causes such as cancer, schizophrenia, kidney and ophthalmic care.

Education

In its continuous effort to spread knowledge and education amongst children and youth the Sundaram Finance Group has been actively supporting several schools, colleges, Universities and NGOs. Laxmi Charities, an educational charitable institution established 38 years ago, assists meritorious students from the lower income groups to pursue higher education. Each year about 1500 students, predominantly college goers are provided assistance.

Environment, Heritage, Culture, Children's Development and Sports

Your Company is also involved in a wide spectrum of activities ranging from the upkeep and maintenance of a public park in the heart of Chennai and ecology awareness campaigns, to a host of activities aimed at encouraging children's participation in art and craft, music and personality development, through year round programmes. The Group is also closely involved with a popular annual festival that showcases folk art, music and dance, again with emphasis on children and an All-India Veterans Tennis tournament. It is also the author of a new charitable sports initiative called 'Mylapore Sports Trust' to nurture young talent in tennis, shuttle, table tennis, and snooker.

ACKNOWLEDGEMENT

Your directors gratefully acknowledge the support and co-operation extended to your company by all the customers, depositors, shareholders, bankers, mutual funds, automotive manufacturers and vehicle dealers.

For nearly six decades, your company has grown on the strong foundation of a set of values that we call the 'Sundaram Way'. It is these values that have been our anchor in difficult times and our beacon when we have forged ahead on the path to growth. This would not have been possible without the complete dedication and unswerving commitment displayed by the employees of the Company, thus enabling it to report a strong performance during the year.

For and on behalf of the Board

Chennai 600 002 S VIJI

28th May, 2012 Chairman

 
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