Home  »  Company  »  TVS Electronics  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of TVS Electronics Ltd.

Mar 31, 2015

Dear Members,

The Board of Directors present their Twentieth Annual Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2015.

Financial Results

The highlights of the financial performance of the Company are as follows:

(Rs. in Lakhs)

Particulars Year ended Year ended 31.03.2015 31.03.2014

Sales and other income 27,103 24,962

Earnings Before Interest & Tax (EBIT) 985 872

Profit/ (Loss) Before Tax (PBT)

before exceptional items 293 130

Exceptional items / extraordinary

items 24 64

Profit / (Loss) Before Tax 317 66

Profit / (Loss) After Tax (PAT) 229 40

Add: Brought forward from previous year (32) (72)

Total available for appropriations 197 (32)

Surplus / (Deficit) in Profit and Loss account 197 (32)

Business results and key highlights of operations

For the year ended 31st March, 2015, the Company reported Sales Revenue and Other Income of Rs. 271.03 Cr as against Rs.249.62 Cr in the previous year. Sales include Rs.94.10 Cr from Services business (Previous year Rs. 69.34 Cr).

During the year, the market for Dot Matrix Printers (DMP) declined due to continued consumer preference for laser printers and the latter's cost benefits over DMP. However, the Company managed to contain the adverse impact of this on its operations by ramping up its services business.

The market for DMP shrunk by 12% year on year in terms of volume. The Company could marginally improve its market share. However, the revenue drop in the DMP business was compensated by improving the 'Point of Sales' (POS) business. The POS business grew by reaching out to various segments of customers, expanding coverage and by providing customer centric solutions.

The Services business recorded a robust growth of over 36% in revenue terms. This was achieved through multiple strategies ranging from (i) expanding the retail footprint for reputed brands, (ii) setting up additional repair & refurbishment factories for mobile phones and (iii) commencing management services for large format service outlets. During the year, the services business added reputed multi-national brands to its client base.

The Company continued its focus on reengineering service delivery processes by introducing new initiatives which led to substantial improvement in the turnaround time (TAT), customer satisfaction score(C-Sat) and parts efficiency index (PEI). Apart from this, a sharper focus on cost management through productivity enhancement initiatives helped the Company improve its financials.

Growing the business

It is expected that the DMP category will continue its decline in the years to come due to a shift in consumer preferences and high costs. Growth for the Company is expected to be driven by POS products which has greater acceptance and demand in the market. There is a great scope for several innovative products in the payment and transaction processing segment for different applications and the Company will continue to explore opportunities and grow aggressively in this new segment.

In the Services business, the Company will focus on serving the Tier-2 & Tier-3 customers under the B2B model by leveraging partner support. As the Company finds a good opportunity in extending its services directly to customers, it will soon start offering customer-centric repair services through multi-brand service outlets. The Company will also take on the role of a Supply chain service provider, Re-seller, Extended warranty provider and remote support provider by using its delivery capability. In order to maximize business opportunities, the Company has decided to enter into agreements with mobile manufacturers / wholesale distributors with a view to enhance the revenue streams.

Code of Business Conduct and Ethics

The Board of Directors have approved the revised Code of Business Conduct and Ethics in terms of Schedule IV of Companies Act, 2013 and clause 49 of Listing Agreement. All the members of the Board and Senior Management Personnel have confirmed compliance with the Code for the year ended 31st March, 2015. The annual report contains a declaration to this effect signed by the Managing Director and Company Secretary as Compliance Officer for the Code. The Code is available on the Company's Website www.tvs-e.in.

Vigil Mechanism / Whistle Blower Policy

The Company has established a vigil mechanism, which is overseen through the Audit Committee. The Audit Committee Chairman has been appointed as the Ombudsman of the Vigil mechanism. Adequate safeguards against victimization of employees and Directors who express their concerns, forms part of the mechanism. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of the employees and the Company. The Policy is available on the Company's Website www.tvs-e.in.

Company has adopted a Fraud Monitoring Mechanism to deal with instances of fraud and mismanagement.

Prevention of Insider Trading

The Company has complied with the provisions of SEBI (Prevention of Insider Trading) Regulations, which is to be complied with effect from 15th May, 2015. The Company has adopted Fair Practices Code and has suitably amended the existing Code of Conduct relating to Insider Trading. The Board and the designated employees of the Company have confirmed compliance with the Code as applicable as on 31st March 2015. Code of Conduct for Insider Trading Regulation and the Fair Practices Code are available on the Company's Website www.tvs-e.in.

Holding Company

The Holding Company, M/s. Sundaram Investment Limited holds 1,11,60,093 Equity Shares of Rs.10/- each constituting 61.92% of the total paid-up share capital of the Company, as on 31st March 2015.

Subsidiary Company

M/s. Prime Property Holdings Limited, is the Company's Wholly Owned Subsidiary. The financial performance of the subsidiary forms part of this report.

Consolidated Accounts

The accounts of the subsidiary company, M/s. Prime Property Holdings Limited are consolidated with the accounts of the Company in accordance with Accounting Standard 21 (AS 21) prescribed by The Institute of Chartered Accountants of India. The consolidated accounts duly audited by the Statutory Auditors and the consolidated financial information forms part of the Annual Report.

The Company does not have any associate or joint venture companies.

A Statement under Section 129(3) of the Companies Act, 2013 is enclosed as Annexure A

The Annual Accounts of the Subsidiary Company and related detailed information will be available for inspection by the Shareholders at the Registered Office of the Company and the Subsidiary Company concerned and will also be made available to the Shareholders upon request.

Dividend

Considering the current financial position of the Company, the Directors do not propose any dividend for the financial year ended 31st March, 2015.

Extract of Annual Return

The details of the Extract of Annual return is enclosed as Annexure B.

Number of Board Meetings

The Board of Directors met six times during 2014-15. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.

Changes in the Share Capital

The paid-up share capital of the Company as on 31st March, 2015 is 18,02,28,180/- consisting of 1,80,22,818 Equity Shares of Rs.10/- each. During the year, the Company has not issued any fresh shares.

Particulars of Loans, Guarantees or Investments

The Company has not given any loans or guarantees covered under the provisions of Section 186 of Companies Act 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

The details of investments made by the Company is given in the financial statements.

Related Party Transactions

All the related party transactions are entered on arm's length basis and in the ordinary course of business and are in compliance of the provisions of the Companies Act, 2013 and the Listing Agreement. The Company has not entered into any material related party transactions with Promoters, Directors or Key Managerial Personnel, which may have potential conflict with the interest of the Company at large.

All related party transactions are approved by the Audit Committee on a quarterly basis, with all the necessary details and presented to the Board. Omnibus approvals are obtained for related party transactions which are either repetitive in nature or unforeseen.

The details of transactions with related parties are provided in the financial statements.

The Related Party Transactions policy as approved by the Board is uploaded on the Company's website at www.tvs-e.in.

Directors

Cessation

Mr. H Lakshmanan (DIN: 00057973), Director resigned from the Board of Directors of the Company effective from the close of 30th September 2014. He has been serving on the Board since the year 2003 and Company has benefitted by his valuable advice and guidance particularly in the areas of long term outlook for the growth of the Company. Directors place on record their deep sense of appreciation for his contribution to the Board and as a member of various Board Committees of the Company.

Retirement by Rotation

Mr. D Sundaram (DIN: 00016304), Director retires by rotation at the ensuing Annual General Meeting of the Company under Section 152(6) of the Companies Act, 2013 and being eligible offers himself for re-appointment. Board recommends his re-appointment.

Appointment

Non Executive Director

Mr. Narayan K Seshadri (DIN: 00053563) appointed as an Additional Director (Non-Independent) under Section 161 of Companies Act, 2013, with effect from 6th May 2015, to hold office upto the date of the ensuing Annual General Meeting. The Company has received a notice under Section 160 (1) of Companies Act, 2013 from a member proposing his appointment as a Director.

Independent Directors

The Board, based on Nomination and Remuneration Committee's recommendation, had appointed Dr. Nagendra Palle (DIN: 06964686), effective 30th September 2014, Mr. M Lakshminarayan (DIN: 00064750) and Mr. M F Farooqui (DIN: 01910054) effective 6th May 2015, subject to the approval of shareholders for a period of 5 years, in terms of the provisions of Companies Act, 2013 and Listing Agreement.

The members at the 19th Annual General meeting, have approved the appointments of Mr. Praveen Chakravarty (DIN:00766422) and Mr. Kenneth Tai (DIN: 01964412) as Independent Directors who are not liable to retire by rotation, to hold office for a term of five consecutive years from 1st April, 2014 to 31st March, 2019. The members have also approved through Postal Ballot, the appointment of Mr. R Ramaraj (DIN:00090279) as Independent Director representing small shareholders of the Company, not liable to retire by rotation, to hold office for a period of three consecutive years from 1st April, 2014 to 31st March, 2017.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Separate Meeting of Independent Directors The Independent Directors met on 5th February, 2015 and 6th May, 2015 and evaluated the performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company considering the views of other Directors. Further details are available in the Corporate Governance Report.

Woman Director

Mrs. Srilalitha Gopal (DIN: 02329790) is serving on the Board since the year 2011.

Key Managerial Personnel

Mr. K E Ranganathan (DIN 00058980), Managing Director and Ms. S Nagalakshmi, Company Secretary and Compliance Officer are the Key Managerial Personnel of the Company under the provisions of the Companies Act, 2013.

During the year the members have also approved the appointment of Mr. K E Ranganathan, as Managing Director of the Company.

Evaluation of the Board's performance

The Board has carried out an evaluation of its own performance, also that of its Directors individually and its Committees. The manner in which the evaluation has been carried out is explained in the Corporate Governance report.

The Company has also devised a Policy on Board Diversity detailing the functional, strategic and structural diversity of the Board.

Remuneration Policy

The Company has adopted a Remuneration Policy of Directors and Senior Management personnel, detailing inter alia the procedure for Director's appointment and remuneration including criteria for determining qualification.

The Policy ensures that (a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully; (b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and (c) remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals. The Policy has been approved by the Nomination and Remuneration Committee and the Board. The Remuneration Policy document as approved by the Board is uploaded on the Company Website www.tvs-e.in.

Statutory Auditors

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai (Registration No.004207S) retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have expressed their willingness to get re-appointed as the Statutory Auditors of the Company and has furnished a certificate of their eligibility and consent under Section 141 of the Companies Act, 2013. In terms of the Listing Agreement, the Auditors vide their letter dated 29th April 2015 have confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI.

The members are requested to appoint M/s. Sundaram & Srinivasan, Chartered Accountants as Statutory Auditors from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting for the second year in the transitional period of three years and authorise the Board to fix their remuneration.

The Auditors' Report for the year ended 31st March 2015 are free from any qualification, reservation or adverse remark and hence do not call for any explanation or comments by the Board.

Internal Auditors

The Company has appointed M/s. Grant Thornton India LLP, as Internal Auditors for the year 2015-16. The reports of the Internal Auditors are discussed in the Audit Committee Meetings.

Cost Auditors

In terms of Section 148 of the Companies Act, 2013 read with Companies (Cost records and Audits) Rules, 2014, printers manufactured by the Company and falling under the specified Central Excise Tariff Act heading are covered under the ambit of mandatory cost audits from the financial years commencing on or after 1st April 2015. The Audit Committee recommended and the Board of Directors appointed Mr. P Raju Iyer, Cost Accountant, Chennai as the Cost Auditor of the Company, to carry out the cost audit for 2015-16. The Company has also received the consent from Mr. P Raju Iyer for his appointment.

Secretarial Auditors and Secretarial Audit Report

The Company appointed M/s. S Krishnamurthy & Co., Practising Company Secretaries, Chennai to carry out Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year 31st March, 2015 is enclosed as Annexure C. The clarification to the observations in the Secretarial Audit Report are given below:

1. The Company has a Business Finance Controller, who is discharging the functions of Chief Financial Officer. However, the Company is in the process of identifying a suitable person for the position of Chief Financial Officer.

2. The delay in the publication of the Notice of Board Meeting is due to the intervening holidays.

3. The Company was awaiting clarifications in respect of providing certain particulars to file Annual Performance Report (APR) for the Company's SEZ unit for 31st March, 2014 and the same was filed immediately on receipt of the required clarifications.

The Board has appointed M/s. S Krishnamurthy & Co., Practising Company Secretaries, Chennai as the Secretarial Auditors for the financial year 2015-16. Necessary consent has been received from them to act as Secretarial Auditors.

Employee Stock Option Plan The current position of the Stock Options granted under Employees Stock Option Scheme 2011 are provided in this Report as Annexure D.

Credit Rating

During the year 2014-15 Brick Work Ratings of India Private Limited has upgraded the Company's Credit Rating to 'BBB'. The Company has informed the Stock Exchanges accordingly.

Transfer to Investor Education and Protection Fund The details of transfer to Investor Education and Protection Fund is provided in the Corporate Governance Report forming part of this Annual Report.

Particulars of Employees and related disclosures The particulars of the employees covered by the provisions of Section 197 (12) of Companies Act, 2013 and the rules thereunder forms part of this report. Other particulars pursuant to Section 197(12) of Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 a. Rule 5(1) (i) & (ii) Ratio and Percentage increase of Remuneration of Directors and Employees:

b. Rule 5(1) (iii) & (v) - Comparison of remuneration of Employees with Company performance:

d. The number of permanent employees on the rolls of the Company : 610

e. Variations in the market capitalization of the Company, Price Earnings Ratio of the Company as at the closing date as at 31st March 2015 and the previous financial year and percentage increase / decrease in the market quotations of the shares of the Company as compared to the rate at which the Company came out with last public offer:

The Company has not made any public offer till date, since its incorporation. Its shares were listed on Stock Exchanges due to a scheme of amalgamation of the erstwhile listed Company, namely TVS Electronics Limited sanctioned by the Hon'ble High Court of Madras vide its order dated 5th August, 2003.

f. Average percentile increase in the salaries of employees other than the managerial personnel during the year 2014-15 was 11.62% and for the managerial personnel was 8.34%.

g. The key parameters for any variable component of remuneration availed by the Directors: Except for Mr. K E Ranganathan, Managing Director, none of the other directors have been paid any remuneration except sitting fees. The key parameters with respect to the variable pay availed by Managing Director are considered by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee as per the Remuneration Policy of the Company.

h. The ratio of remuneration of the highest paid Director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year - Not applicable.

i. It is hereby affirmed that the remuneration paid is as per the Remuneration Policy of the Company.

E-Waste Management

The Company is well ahead in terms of e-waste management compliance directed by Government of India with effect from 1st May, 2012. The Company has registered and authorized collection, storage and disposal centres in the required locations and has complied with the statutory requirements relating to E- Waste Management.

Report on energy conservation, foreign exchange and research and development

Information relating to energy conservation, foreign exchange earned and spent and research and development activities undertaken by the Company in accordance with the provisions of Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are given in Annexure E to the Board's Report.



Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report and a Corporate Governance Report are made a part of this Annual Report.

A Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreement is attached to this Report.

Public Deposits

The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Companies Act, 2013 for the year ended 31st March, 2015.

Anti-Sexual Harassment Policy

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.

During the year under review, the Company has not received any complaint pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Awards and Recognitions

The Company has been awarded:

i) VAR India Award for Best Thermal Transfer Printer 2014

ii) VAR India Award for Best Mechanical Keyboard 2014

iii) VAR India Award for Best Retail POS 2014

iv) HTC After sales services Award 2014.

v) Sony Partnership Award 2014

vi) Microsoft (Nokia) Best All India Back end repair Engineer Award 2014

vii) DELL Delighting Customers Award 2014

Directors' Responsibility Statement As required by Section 134 (5) of the Companies Act, 2013 the Directors hereby state:

i) that in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed and that there were no material departures;

ii) that they 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 31st March, 2015 and of the profits of the Company for the year under review;

iii) that they had taken proper and sufficient care for the maintenance of 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;

iv) that they had prepared the annual accounts for the year ended 31st March, 2015 on a "going concern" basis;

v) that they had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively;

vi) that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that systems were adequate and operating effectively.

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation for the committed service of all the employees.

The Directors would also like to express their grateful appreciation for the assistance and co-operation received from the customers, dealer partners, business partners, bankers and its holding companies Sundaram Investment Limited and T.V.Sundram Iyengar & Sons Private Limited.

The Directors thank the Shareholders for the continued confidence and trust placed by them in the Company.

For and on behalf of the Board

Chennai Gopal Srinivasan

6th May, 2015 Chairman




Mar 31, 2014

Dear Members,

The Directors hereby present their Nineteenth Annual Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2014.

Financial Results

The highlights of the financial performance of the Company are as follows :

(Rs. in Lakhs)

Year ended Year ended 31.03.2014 31.03.2013

Sales and other income 24,962 23,775

Earnings Before Interest & Tax (EBIT) 872 461

Profit/ (Loss) Before Tax (PBT) before exceptional items 130 (504)

Exceptional items 64 -

Profit / (Loss) Before Tax 66 (504)

Profit / (Loss) after Tax (PAT) 40 (801)

Add: Brought forward from previous year (72) (729)

Total available for appropriations (32) (72)

Surplus / (Deficit) in Statement of Profit and Loss (32) (72) Business results and key highlights of operations

For the year ended 31st March, 2014, the Company reported Sales Revenue and Other Income of Rs.249.62 Crores as against Rs.237.75 Cr in the previous year. Sales include Rs.69.34 Cr from Services business (Previous year Rs.44.75 Cr).

The overall Dot Matrix Printer (DMP) market continues to decline due to various factors. In spite of difficult market conditions, the Company maintained market share of 37%. The market shrunk by 10% year on year in terms of volume whereas our volumes declined by 21%. The 80 Column segment market share has grown by 3%. Though there was drop in revenue in DMP business, the Company compensated in the POS business to a greater extent.

The Company performed well on the "Point of Sales" (POS) and transaction management products registering a healthy growth of 25%. This was achieved by introduction of new products, reaching out to different customer segments and covering new geographies and providing unique solutions to the Customers.

Services business has recorded growth of 10% in revenue terms in spite of declining service calls from few of our customers. Servicetec added new brands like Lenovo and Samsung during the year. It also expanded its operations for walk-in customers for hTC brand providing repair of Smart Phones by opening additional 8 centres across key towns in India. This has helped grow the revenue and profitability in the overall Services business.

From the overall operational excellence perspective, the Company continues to drive aggressively the Total Quality and Cost Management initiatives with lean manufacturing principles to reduce variable and fixed costs continuously.

Growing the business

In the Products business, the growth will be driven by expanding the product range in the Point of Sale category and also launching contemporary products for customer segments like Retail outlets. There is a great scope for several innovative products in the payment and transaction processing segment for different applications. The Company is exploring several opportunities in these categories to grow the business. The Dot Matrix Printer category is expected to decline in the years ahead due to consumer shift towards thermal technology.

In the Services business, the Company is bullish on growing the business on the B2B model by being the Trusted Service Partner for well known brands in the PC and Mobile products category. Also, the Company is evaluating the opportunity present in extending its services offering directly to Customers. Having built good process and delivery capability, the Company is confident of growing the business by servicing the consumers directly. The Company is also positive in forging new tie-ups with several leading brands and manage their service needs of various product categories.

Awards and Recognitions

The Company has been awarded:

i) VAR India Award for Best Key Board (Mechanical) 2013.

ii) VAR India Award for Best POS - Indian Brand 2013.

iii) hTC Quietly Brilliant Customer Services Experience Award 2013.

iv) Nokia Amazing Everyday Award 2013.

Change in legal structure of the Holding Company

During the year, as part of the exercise to consolidate the holdings, M/s. TVS Investments Limited, the Holding Company of the Company transferred its entire holdings comprising of 1,09,58,264 Equity Shares of Rs.10/- each constituting 60.80%, in the Company to M/s. Sundaram Investment Limited, on 14th October 2013, under SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011. Consequent to this transfer, M/s. Sundaram Investment Limited, has become the Holding Company of the Company. The Companies have made necessary disclosures under SEBI and Stock Exchange Regulations.

Subsidiary Companies

As on 1st April, 2013, the Company had two Wholly Owned Subsidiaries viz. M/s. Prime Property Holdings Limited (PPHL) and M/s. Tumkur Property Holdings Limited (TPHL).

Since, TPHL had not been in any business operation since the date of incorporation and also did not propose to carry on any business activities, in future, TPHL applied to Registrar of Companies, Chennai, to strike off it''s name from the Register under the Fast Track Exit Mode, under Section 560 of the Companies Act, 1956. On 1st November, 2013, the Registrar of Companies approved the same and TPHL''s name had been struck off from the Register from 1st November, 2013.

Consolidated Accounts

The accounts of the subsidiary company, M/s. Prime Property Holdings Limited are consolidated with the accounts of the Company in accordance with Accounting Standard 21 (AS 21) prescribed by The Institute of Chartered Accountants of India. The consolidated accounts duly audited by the Statutory Auditors and the consolidated financial information form part of the Annual Report.

In terms of AS 21, Company is not required to consider the accounts of another subsidiary M/s. Tumkur Property Holdings Limited, as it''s name has been struck off from the Register under Section 560 of Companies Act, 1956, with effect from 1st November, 2013.

In accordance with the general exemption granted by the Central Government under Section 212 of the Companies Act, 1956 in February, 2011, the Balance Sheet, Statement of Profit and Loss, Report of the Board of Directors and Report of the Auditors of the subsidiary company is not attached to the Balance Sheet of the Company.

The Annual Accounts of the Subsidiary Company and related detailed information will be available for inspection by the Shareholders at the Registered Office of the Company and the Subsidiary Companies concerned and will also be made available to the Shareholders upon request.

A Statement under Section 212 (1)(e) of the Companies Act, 1956 is also attached.

Dividend

Considering the current financial position of the Company, the Directors do not propose any dividend for the financial year ended 31st March, 2014.

Directors

Mr. K E Ranganathan was appointed as Additional Director at the Board meeting held on 5th February, 2014, with effect from 6th February 2014, to hold office till this Annual General Meeting. Mr. K E Ranganathan was also appointed as Managing Director for a period of three years from 6th February 2014. Mr. K E Ranganathan is a Chartered Accountant and Company Secretary with over 28 years of experience. He has held various senior positions in leading industrial groups, including as Managing Director of a leading business group. Mr. K E Ranganathan''s term of office as Additional Director is due to expire at the ensuing Annual General Meeting and is eligible for appointment as a Director, which will enable him to continue his tenure as Managing Director of the Company.

Mr. Balu Doraisamy, Director resigned from the Board of Directors of the Company effective from the close of 31st May, 2013. He was appointed as a Director in the year 2011 and Company has benefited by his valuable guidance and directions, particularly in terms of long term outlook for the growth of the Company. Directors place on record their deep sense of appreciation for the services rendered by Mr. Balu Doraisamy during his tenure.

During the year, Ministry of Corporate Affairs has notified various new provisions relating to the selection, manner of appointment, functions and duties of the Independent Directors. In terms of the provisions of Section 149 of the Companies Act, 2013, Independent Directors are eligible to hold office for a term upto five consecutive years and are eligible for the second term subject to passing of special resolutions by the Company. Independent Directors, so appointed, shall not be liable to retire by rotation under the Companies Act, 2013.

Mr. D Sundaram and Mr. H Lakshmanan, who were Independent Directors under Clause 49 of the Listing Agreement with the Stock Exchanges, are not Independent Directors under Section 149(6) of Companies Act, 2013 and also under the revised Clause 49 of the Listing Agreement which will come into force with effect from 1 st October, 2014.

Mr. Praveen Chakravarty, Mr. R Ramaraj and Mr. Kenneth Tai have satisfied the criteria of Independence under Section 149(6) of the Companies Act, 2013. Necessary resolutions are being placed before the shareholders at the ensuing Annual General Meeting seeking approval for the appointment of Mr. Praveen Chakravarty and Mr. Kenneth Tai for a term of upto five consecutive years from 1st April, 2014 to 31st March, 2019. Mr. R Ramaraj was appointed as the Small Shareholder Director under Section 151 of the Companies Act, 2013 by the Board of Directors and the approval of the shareholders will be sought under Section 110 of the Companies Act, 2013 through Postal Ballot.

The Nomination and Remuneration Committee has been entrusted with the task of identifying two Independent Directors to comply with the revised Clause 49 of the Listing Agreement.

Mrs. Srilalitha Gopal, Director under Section 149 of the Companies Act, 2013 and who had been serving on Board since the year 2011, retire by rotation at the ensuing Annual General Meeting of the Company in terms of Section 152(6) of the Companies Act, 2013 and being eligible, offer herself for re-appointment.

The brief resume of Directors and other information have been detailed in the Notice convening the Annual General Meeting of the Company. Necessary resolutions are being placed before the members for approval. Board recommends their appointment / re-appointment as Directors of the Company.

Senior Management

During the year, Mr. J N Sastry, President and CEO, relinquished his position with effect from 30th November, 2013.

Ms. K Hema Rao and Mr. R Sridhar have been appointed as Managers under Section 269 of the Companies Act, 1956 with effect from 1st November, 2013. They relinquished their position as Managers from the close of 5th February, 2014. Necessary intimations have been made to the statutory authorities concerned.

Statutory Auditors

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai (Registration No.004207S) retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013 and that they are not disqualified for re-appointment.

Secretarial Auditors

In terms of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company is required to appoint a Secretarial Auditor.

Board has appointed M/s. S Krishnamurthy & Co., Practicing Company Secretaries, Chennai as Secretarial Auditors for the financial year 2014-15 and to attach their report to the Board''s Report.

Employee Stock Option Plan

During the year, 15000 stock options were granted under the Employees Stock Option Scheme 2011 (ESOP). These options were issued at Rs.10/- per Equity share and be allotted one Equity share of the Company of the nominal value of Rs.10/- per Equity Share on payment of exercise price during the exercise period.

Details of the options granted and options in force as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure "A" to this Report.

Listing of Shares issued on Preferential Basis

M/s. Tranzmute Business Advisory LLP, Mumbai (Tranzmute), have been allotted 3,50,000 warrants convertible into Equity Shares, on preferential basis, in the year 2011. On 2nd April, 2013, as per the terms of the Issue, Tranzmute has exercised the option to convert the entire warrants in to equal number of Equity Shares of Rs.10/- each at a premium of Rs.12.75 per share. Company had allotted 3,50,000 Equity Shares of Rs.10/- each to Tranzmute and the same has been listed in the Stock Exchanges in which the Company''s shares are listed.

Credit Rating

Company had obtained Investment grade credit rating from Brickwork Ratings India Private Limited, during the year 2012-13. The Company is taking necessary steps to renew the same.

Personnel

The particulars of the employees covered by the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 forms part of this report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and the accounts are being sent to all members excluding the statement containing the particulars of employees provided under Section 217(2A) of the Companies Act, 1956. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

E-Waste Management

The Company is well ahead in terms of e-waste management compliance directed by Government of India with effect from 1st May, 2012. The Company has taken steps to register with appropriate authorities for setting up "e-waste" collection centres in all the States. It is also tying up with vendors for e-waste disposal.

Report on energy conservation, foreign exchange and research and development

Information relating to energy conservation, foreign exchange earned and spent and research and development activities undertaken by the Company in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosures of particulars in the report of Board of Directors) Rules, 1988 are given in Annexure "B" to the Directors'' Report.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Management Discussion and Analysis Report and a Corporate Governance Report are made a part of this Annual Report.

A Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the listing agreement is attached to this Report.

Public Deposits

The Company has not accepted any deposits from the public within the meaning of Section 58A of the Companies Act, 1956 for the year ended 31 st March, 2014.

Investments

The Company had an investment of Rs.1.19 Crores (11866 Units) in TVS Shriram Growth Fund (Fund) of which it had divested Rs.0.80 Crores (8000 units) during the year. The Company had earned a profit of Rs.0.04 Crores, out of this transaction.

Company had an investment of Rs.5 Lakhs comprising of 50,000 Equity Shares of Rs.10/- each in TPHL.Since, the net worth of TPHL had fully eroded due to accumulated losses, Company''s investment in TPHL to the extent of Rs.5 Lakhs had been fully diminished and already provided for in the books of accounts of the Company as on 31st March, 2013 and the same has been written off against the provision created during the year 31st March, 2014.

Directors'' Responsibility Statement

As required by Section 217(2AA) of the Companies Act, 1956, the Directors hereby state:

i) that in the preparation of the annual accounts for the financial year ended 31st March 2014, the applicable accounting standards have been followed and that there were no material departures;

ii) that the Directors have 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 31st March, 2014 and of the profits of the Company for the year under review;

iii) that the Directors had 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;

iv) that the Directors have prepared the annual accounts for the year ended 31st March, 2014 on "going concern" basis.

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation for the committed service of all the employees.

The Directors would also like to express their grateful appreciation for the assistance and co-operation received from the customers, dealer partners, business partners, bankers and its holding companies Sundaram Investment Limited and T.V.Sundram Iyengar & Sons Limited.

The Directors thank the Shareholders for the continued confidence and trust placed by them in the Company.

For and on behalf of the Board

Chennai Gopal Srinivasan 8th May, 2014 Chairman


Mar 31, 2013

The Directors hereby present their Eighteenth Annual Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2013.

Financial Results

The highlights of the financial performance of the Company are as follows:

(Rs. in Lakhs)

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

Sales and other income 23775 22036

Earnings Before Interest & Tax (EBIT) 461 820

Profit/(Loss) Before Tax (PBT) (504) 161

before exceptional items

Exceptional/Discontinuing Operations (21)

Profit / (Loss) Before Tax (504) 141

Profit / (Loss) after Tax (PAT) (801) 140

Add: Brought forward 729 589 from previous year

Add (Less): Tax relating earlier years

Total available for appropriations (72) 729

Surplus in Profit and Loss account (72) 729

Business results and key highlights of operations

For the year ended 31st March, 2013, the Company reported Sales Revenue and Other Income of Rs.237.75 Cr as against Rs.220.36 Cr in the previous year. Sales include Rs.44.75 Cr from Services business (previous year Rs.23.33 Cr for six months).

The Company continues to grow in the "Point of Sale and Transaction Management Products" business consisting of Receipt and Invoice Printers, Label Printers, Bar Code Scanners, and accessories. About 15% growth has been seen as compared to previous year in this category. In terms of Go-to-market approach, the Company has evolved more direct customer engagement to grow its business.

The overall Dot Matrix Printer (DMP) market shrunk by 23% year on year in terms of volume and 17% in value and the Company managed to gain market share from competitors and thus increased its market share from 34% to 39% even under difficult market conditions.

Services business has shown healthy growth of 19% in the current year over the previous year. It added 4 new clients to the customer base. It also expanded its operations for walk-in customers providing repair of Smart Phones, which resulted in increased volumes by more than 50% over the planned volumes. Correspondingly, revenues from this business grew during the 2nd half of the financial year.

However, some of the healthy revenue generating brands are slowing down in business volumes and hence profitability is under pressure.

From the overall operational excellence perspective, the Company continues to drive aggressively the Total Quality and Cost Management initiatives with lean manufacturing principles to reduce variable and fixed costs continuously.

Growing the business

The Board of Directors of the Company in their Report for the Year 2011-12 had articulated the Industry Outlook, emerging trends in the Industry and key initiatives taken by the Company to move into a higher growth trajectory.

During the early part of 2013-14, , the Company will be embarking on Sales Transformation and optimisation, Re-engineering Services Business and transforming its proven Manufacturing and Supply Chain capability into a business unit. In addition, the Company plans to build and evolve a Solutions Line of Business (LOB) under the Products Business Unit, which will be structured based on Industry verticals such as Banking and Financial Services, Hospitality, Healthcare and Retail areas. In approaching customers in these areas, Company will build partnerships with appropriate software vendors for each vertical.

Services business will continue its focus on acquiring new customers in the B2B, B2O and B2C spaces.

Awards and Recognitions

The Company has been awarded:

i) VAR India Award for Best Key Board (Mechanical) 2012

ii) VAR India Award for Best POS – Indian Brand 2012

iii) CELLIT Awards 2012 – Favorite POS Printer brand

iv) Best Partner Award for DELL for Field Services 2012.

v) HTC Quietly Brilliant Customer Services Experience Award 2013.

vi) Nokia Amazing Everyday Award 2013.

Change in legal structure of the Holding Company

Pursuant to the "Composite Scheme of Arrangement" sanctioned by Hon''ble High Court of Judicature at Madras, vide their Order dt. 3rd August, 2012, M/s. TVS Investments Ltd (TVSI) which has been the Holding Company of the Company (holding 60.69%ason 31st March, 2013) has become a wholly owned subsidiary of M/s. Sundaram Investments Ltd (SIL).

Accordingly, the Company has become an indirect Subsidiary of SIL as per Section 4(1)(c) of the Companies Act, 1956 from the effective date viz., 21st August, 2012.

However, there is no change in the status of holding of TVSI over the Company before and after the said Scheme. The Company continues to be a subsidiary of TVS Investments Limited.

Subsidiary Companies

The Company has two subsidiaries viz. Prime Property Holdings Limited and Tumkur Property Holdings Limited.

Company has an investment of Rs.5 Lakhs comprising of 50,000 Equity Shares of Rs.10/- each in M/s. Tumkur Property Holdings Limited (TPHL). Since, the networth of TPHL had fully eroded due to accumulated losses, as on 31st March, 2013, Company''s investment in TPHL to the extent of Rs.5 Lakhs had been fully diminished and provided for in the books of accounts of the Company as on 31st March 2013.

Consolidated Accounts

The accounts of the subsidiaries are consolidated with the accounts of the Company in accordance with Accounting Standard 21 (AS 21) prescribed by The Institute of Chartered Accountants of India. The consolidated accounts duly audited by the Statutory Auditors and the consolidated financial information 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, 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 the Company.

The Annual Accounts of the subsidiary companies and related detailed information will be available for inspection by the Shareholders at the Registered Offices of the Company and the Subsidiary Companies concerned and will also be made available to the Shareholders upon request.

Dividend

Considering the current financial position of the Company, the Directors do not propose any dividend for the financial year ended 31st March, 2013.

Directors

Mr. Balu Doraisamy, Director has expressed his desire to resign from the Board of Directors of the Company effective from the close of 31st May, 2013. He was appointed as a Director in the year 2011 and the Company was benefited by his valuable guidance and directions, particularly in terms of long term outlook for the growth of the Company. Directors place on record their deep sense of appreciation for the service rendered by Mr. Balu Doraisamy during his tenure.

Mr. R. Ramaraj and Mr. Kenneth Tai, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The brief resume of these Directors and other information have been detailed in the notice convening the Annual General Meeting of the Company. Necessary resolutions are being placed before the members for approval.

The Directors recommend their re-appointment as Directors of the Company.

Auditors

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai (Registration No.004207S) retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

Employee Stock Option Plan

Out of 2,15,000 options issued under the Employee Stock Option Scheme (ESOP) in 2011, 2,00,000 options have lapsed. 15,000 options were still in force. These Options were issued at Rs.10/- per Equity Share and be allotted one Equity Share of the Company of the nominal value of Rs.10/- per Equity Share on payment of exercise price during the exercise period.

Details of the options granted and options in force as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure "A" to this Report.

Conversion of Warrants

M/s. Tranzmute Business Advisory LLP, Mumbai (Tranzmute), have been allotted 3,50,000 warrants convertible into Equity Shares, on preferential basis, in the year 2011. On 2nd April, 2013, as per the terms of the Issue, Tranzmute has exercised the option to convert the entire warrants in to equal number of Equity Shares of Rs.10/- each at a premium of Rs.12.75 per share. As on date of this Report, Company allotted 3,50,000 Equity Shares of Rs.10/- each to Tranzmute and the formal listing applications are being made to Stock Exchanges in which the Company''s shares are listed.

Credit Rating

During the year, the Company had obtained Investment grade credit rating from Brickwork Ratings India Private Limited. This would enable the Company to obtain more favourable terms from bankers.

Personnel

The particulars of the employees covered by the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended is set out in Annexure "C" to this report.

E-Waste Management

The Company is well ahead in terms of e-Waste management compliance directed by Government of India with effect from 1st May 2012. The Company has taken steps to register with appropriate authorities for setting up "e-waste" collection centres in all the States. It is also tying up with vendors for e-waste disposal.

Report on energy conservation, foreign exchange and research and development

Information relating to energy conservation, foreign exchange earned and spent and research and development activities undertaken by the Company in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosures of particulars in the report of Board of Directors) Rules, 1988 are given in Annexure "B" to the Directors'' Report.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Management Discussion and Analysis Report and a Corporate Governance Report are made a part of this Annual Report.

A Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the listing agreement is attached to this Report.

Public Deposits

The Company has not accepted any deposits from the public within the meaning of Section 58A of the Companies Act, 1956 for the year ended 31st March, 2013.

Investments

The Company had an investment of Rs.7.10 Crores in TVS Shriram Growth Fund (Fund) of which it had divested Rs. 5.70 Crores during the year. Further the Company also redeemed investments of Rs.0.22 Crores during the year. In both the transactions, the Company earned a profit of Rs.0.44 Crores.

Directors'' Responsibility Statement

As required by Section 217(2AA) of the Companies Act, 1956, the Directors hereby state:

i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) that 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 31st March, 2013 and of the loss of the Company for that period;

iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the Directors had prepared the annual accounts for the year ended 31st March, 2013 on a "going concern" basis.

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation for the committed service of all the employees.

The Directors would also like to express their grateful appreciation for the assistance and co-operation received from the customers, dealer partners, business partners, bankers and its holding companies viz.,TVS Investments Limited, Sundaram Investment Limited and TVSundram Iyengar & Sons Limited.

The Directors thank the Shareholders for the continued confidence and trust placed by them in the Company.

For and on behalf of the Board

Chennai Gopal Srinivasan

20th May, 2013 Chairman


Mar 31, 2012

The Directors hereby present their Seventeenth Annual Report on the business and operations of the Company and the financial accounts for the year ended 3181 March, 2012.

Financial Results

The highlights of the financial performance of the Company are as follows: (Rs. in Lakhs)

Year ended Year ended ParticulaRs 31st March, 31st March,

2012 2011

Sales and other income 22,036 18,361

Earnings Before Interest & Tax (EBIT) 820 774

Profit/(Loss) Before Tax (PBT) before exceptional items 161 151

Exceptional Items (21) (62)

Profit / (Loss) Before Tax 141 89

Loss from Discontinuing Operations - (25)

Profit /(Loss) after Tax (PAT) 140 154

Add: Brought forward from previous year 589 435

Total available for appropriations 729 589

Surplus in Profit and Loss account 729 589

Business results and key highlights of operations

For the year ended 31st March, 2012, the Company reported Sales Revenue and Other Income of Rs.220 Cr as against Rs.184 Cr in the previous year. Sales include Rs.23.33 Cr from Services business taken over from TVS-E Servicetec Ltd effective 1st October 2011.

The Company has in the last two years significantly improved its presence in the "Point of Sale and Transaction Management Products" business consisting of Receipt and Invoice Printers, Label Printers, Bar Code Scanners, POS systems & terminals (Cash Registers), Key Board and accessories. Significant growth has been seen as compared to previous year in this category. On Point of Sale and Transaction Management products and solutions, the Company has evolved more direct customer engagement to grow its business.

During the second half of the year, the Company increased focus on Channel Engagement and Service improvement for its customer base, which has shown results better than the first half of the year.

The overall Dot Matrix Printer (DMP) market shrunk between 3-4% in the year both in terms of volume and value. Going forward, the Company believes that there should be increased focus on revenue mix and supplies business.

Due to sustained focus on cost and cash management exercise, the Earnings before Interest and Tax (EBIT) for the year improved to Rs.8.20 Cr as against Rs.7.74 Cr in previous year.

The Company has over the years built internal capability for extensive customization and standardization of the products to suit diverse and demanding Indian conditions. The Company has also built robust Service and Support infrastructure as a key differentiator for driving growth. The Company has made substantial progress as a key hardware provider for the Point of Sale market segment.

From the overall operational excellence perspective, the Company continues to drive aggressively the Total Quality and Cost Management initiatives with lean manufacturing principles to reduce variable and fixed costs continuously.

Growing the business

The Board of Directors of the Company in their Report for the Year 2010-11 had articulated the Industry Outlook, emerging trends in the Industry and key initiatives taken by the Company to move into a higher growth trajectory. The Company has taken initiatives as part of its growth strategy to provide more effective and relevant products appropriate for the customers with a view to grow the Company and extending its activities to encompass the Transaction and Authentication businesses as part of the growth strategy.

Around this strategy, the Company proposes to build additional products to expand market for the payment industry along with improvements to Transaction and Authentication Products. This transformation process is being carried out under the guidance of Strategic Advisors who form a part of the Transformation Steering Group.

The proposal envisages building more comprehensive and competitive product offering and matching services capabilities for customers in the Banking and Financial Services, Hospitality, Healthcare and Retail segments. In support of this growth strategy, the Company have acquired the Services business from TVS-E Servicetec Ltd. TVS-E Servicetec Ltd is an established player in providing warranty management, AMC and other repair services. Their client list includes leading brand owners in IT, Banking, Telecom and other corporate customers. During the past 5 years, they had built an excellent and sustainable business with leading brand owners in these segments and have also built robust infrastructure consisting of

- Technology platform, customer relationship and management applications to handle large call volumes and remote diagnostics

- Partner network across India with over 200 Authorized Service Partners.

- Qualified and experienced human resources, which will benefit the Buyer in its other business initiatives.

- Repair factory, Repair centres, Call centre & Warehouses.

- Expertise in managing the business of Services and a wealth of experience and knowledge acquired in managing the customer's requirements.

The above acquisition, in addition to its current business, brings in value addition by means of its strategic fit. This will bring synergy towards Cost management with integrated common services.

This acquisition not only provides incremental top line to the Company but also delivers sustainable profit margins consistent with the industry trends. In addition the following benefits and value creation are likely to accrue to the Company:

- Better placement for getting qualified in tenders

- Additonal AMC and supplies revenue from the TVSE customers (post warranty)

- Expansion of Services business with new customer brands

- Cross functional cost optimisation from the integration.

The above acquisition in addition to its current business brings in value addition by means of its strategic fit and the Company is closely working on the growth with a leading Strategic Advisor in this regard to implement the growth strategies.

The Company is confident that all these initiatives will yield the desired results that will provide value to the shareholders who continue to maintain their trust in us. The Company will sustain its efforts to deliver improved results coming from initiatives such as

- Increased penetration in to the Point of Sale market

- Transforming sales to match with the product categories

- Strengthening existing product portfolio

- Introducing new products for payment industry (Micro ATMs/financial inclusion).

Awards and Recognitions

The Company has been awarded:

i) VAR India Award for Best Key Board (Mechanical) 2011

ii) VAR India Award for Best POS - Indian Brand 2011

iii) DELL Best Partner Award for Field Services 2012

Subsidiary Companies

The Company has two subsidiaries viz., Prime Property Holdings Limited and Tumkur Property Holdings Limited.

Consolidated Accounts

The accounts of the subsidiaries are consolidated with the accounts of the Company in accordance with Accounting Standard 21 (AS 21) prescribed by The Institute of Chartered Accountants of India. The consolidated accounts duly audited by the Statutory Auditors and the consolidated financial information 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 Account, Report of the Board of Directors and Report of the Auditors of the subsidiary companies are not attached to the Balance Sheet of the Company.

The Annual Accounts of the subsidiary companies and related detailed information will be available for inspection by the Shareholders at the Registered Offices of the Company and the subsidiary companies concerned and will also be made available to the Shareholders upon request.

Dividend

Considering the current financial position of the Company and with a view to conserve the resources, the Directors do not propose any dividend for the financial year ended 31st March, 2012.

Directors

After a long years of association with the Company, Mr. S R Vijayakar, Mr. R R Nair and Dr. Sridhar Mitta, Directors, resigned from the Board of Directors with effect from 2nd February, 2012. The Company was immensely benefited by their wise counsel and direction during its journey since inception. In line with the transformation of the business of the Company, the Board of Directors decided to broad base the Board to take the Company to the next level of growth. In this connection, Mr Balu Doraisamy, Mr Praveen Chakravarty and Mrs Srilalitha Gopal were inducted in to the Board of Directors.

During the year, Mr. Balu Doraisamy was appointed as an Additional Director on 27th May, 2011. The Shareholders have approved his appointment as a Director at the Sixteenth Annual General Meeting held on 21s1 September, 2011.

Mr. Praveen Chakravarty and Mrs. Srilalitha Gopal have been appointed as Additional Directors on 10^ November, 2011. In accordance with the provisions of Section 260 of the Companies Act, 1956, they will hold office up to the date of the ensuing Annual General Meeting of the Company. Notice under Section 257 of the Companies Act, 1956 has been received from a Member proposing their candidature for the office of Director.

Mr. D Sundaram and Mr. H Lakshmanan, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Necessary resolutions are being placed before the members for approval.

Auditors

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai (Registration No.004207S) retire at the ensuing Annual General Meeting and are eligible for re-appointment.

Employee Stock Option Plan

2,11,000 options were issued at Rs.70 per share to the eligible employees of the Company under the Employees Stock Option Scheme (ESOP) in 2003 fully lapsed on 31st March, 2012. No fresh ESOP options have been issued during the financial year ended 31s1 March, 2012. Details of the options granted and options in force as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure "A" to this Report.

Recognising the fact that human resources are key to growth of the organization and as per the policy of rewarding the employees, the Company approached the shareholders and obtained their approval to institute and Employee Stock Option Scheme (ESOP Scheme 2011) for grant of Equity Stock Options convertible to equal number of Equity Shares of Rs.10 each of the Company (Options) not exceeding an aggregate of 17,65,000 options constituting about 10% of the paid up equity share capital of the Company as on 31st March, 2011.

Personnel

There were no employees covered by the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended vide Notification No. GSR 289(E) dated 31st March, 2012.

E-Waste Management

The Company is well ahead in terms of e Waste management compliance directed by Government of India with effect from 1st May, 2012.

Report on energy conservation, foreign exchange and research and development

Information relating to energy conservation, foreign exchange earned and spent and research and development activities undertaken by the Company in accordance with the provisions of Section 217(1 )(e) of the Companies Act, 1956 read with Companies (Disclosures of particulars in the report of Board of Directors) Rules, 1988 are given in Annexure "C" to the Directors' Report.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Management Discussion and Analysis Report and a Corporate Governance Report are made a part of this Annual Report.

A Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the listing agreement is attached to this Report.

Public Deposits

The Company has not accepted any deposit from the public within the meaning of Section 58A of the Companies Act, 1956 for the year ended 31s1 March, 2012.

Investments

The Company during the year made additional investment of Rs.10.50 Crores for the fourth and final call in respect of its commitment to TVS Shriram Growth Fund -1 (Fund). With this the total commitment of Rs.35Cr was fully paid by the Company. During the year the Company received Rs.0.90Cr as redemption proceeds from the Fund. During the year, the Company as part of its acquisition of Services business from TVS-E Servicetec Limited, paid part of the consideration in kind by transferring 2,70,000 units of the Fund at Face Value of Rs.1000 each at par. This reduced its investments in the Fund to Rs.7.10 Cr and improved its capital employed in the form of core business assets.

Directors' Responsibility Statement

As required by Section 217(2AA) of the Companies Act, 1956, the Directors hereby state:

i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) that 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 (namely 31st March, 2012) and of the profit of the Company for that period;

iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the Directors had prepared the annual accounts for the year ended 31slMarch, 2012 on a "going concern" basis.

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation for the committed service of all the employees.

The Directors would also like to express their grateful appreciation for the assistance and co-operation received from the customers, dealer partners, business partners, bankers and the Company's holding companies viz., TVS Investments Limited, Sundaram -Clayton Limited and T.V.Sundram Iyengar & Sons Limited.

The Directors thank the Shareholders for the continued confidence and trust placed by them in the Company.

For and on behalf of the Board

Chennai Gopal Srinivasan

3rd May, 2012 Chairman


Mar 31, 2010

The Directors hereby present their fifteenth annual report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS

The highlights of the financial performance of the Company are as follows:

(Rs. in lakhs)

Particulars Year ended Year ended

31st March,2010 31st March,2009

Sales and other income 19,447 19,540

Earnings Before Interest & Tax (EBIT) 218 (26)

Profit / (Loss) Before Tax (PBT)

before extraordinary items (504) (549)

Income from Extraordinary Items (Net) - (10)

Profit /(Loss) Before Tax (504) (559)

Profit /(Loss) After Tax (PAT) (486) (631)

Add: Profit brought forward from previous year 778 1,549

Add / (Less): Tax relating to earlier years 143 (140)

Total available for appropriations 435 778

Surplus in Profit and Loss account 435 778



Business results and key highlights of operations:

During the year ended 31st March 10, the Company reported Sales Revenues of Rs.190.4 Cr., at the same level as that of previous year (2008-09). However due to focused cost management exercise, the Earnings Before Interest and Tax (EBIT) for the year improved to Rs.2.18 Cr as against reported loss of Rs.0.26 Cr (Previous year).

The Dot Matrix Printer (DMP) sales recovered in the second half of the year both in volume and value terms. Within DMP, Small format printer picked up growth during the second half of the year. While some parts of DMP were under pressure due to lower demand and application migration, the Company registered better growth in Enterprise and Government segments gaining in volume and value. The Supplies business of DMP also recorded growth with focus on installed base including key accounts.

The Companys Point of Sale (POS) products business consisting of peripherals, printers and devices achieved a significant growth momentum and grew substantially as compared to previous year. The Company continues to focus on fulfillment of customer needs by continuous and extensive engagement with customers resulting in launch of Scanners and Thermal Mini Printers in the market. New products launch is a key part of the POS growth strategy and as a key enabler, the Company has also prioritized on leveraging its Service and Support infrastructure as key differentiator for driving growth. The Company believes that POS business offers significant growth opportunity for building long term value especially in the context of DMP business having limited scope for growth. Launch of new products will continue to be focused upon.

Overall profitability of the Company in terms of EBIT margins improved from negative 0.3% to 1.1%. This was possible due to aggressive Total Cost Management initiatives and the focus on product mix improvements. The Company continues to drive manufacturing excellence and cost management initiatives to reduce variable and fixed costs. Some of the cost management initiatives like relocation of office facility and consequent reduction in rentals and establishment cost, consolidation of national distribution, energy conservation measures and improved productivity helped the Company to reduce its costs.

The Company also continued its focus on reducing working capital by effective receivables management resulting in reduction of over dues. The Company has initiated many measures to reduce the level of inventory holdings spread across components and finished goods.

MANAGEMENT DISCUSSION AND ANALYSIS

As required under Clause 49 of the Listing Agreement, a detailed Report on Management Discussions and Analysis is given below:

A. The Industry and Trends:

The first half of the year 2009-10 witnessed depressed sentiment in the desktop PCs (Personal Computer) market resulting in PC sales growing only by 7% in the first half of the year. This is primarily attributable to conservative IT spends in notable sectors like BPO/IT-enabled services and retail. Overall printer sales also registered 12% decline during the first half of 2009-10 of which DMP sales recorded 17% decline due to intense competition and due to migration of applications. Within DMP, consumption by household segment declined sharply by 65% while in the business segment it was at 14%. The only exception has been in Government and Banking Sectors which continue to register growth in consumption due to increased budget allocation for Sectors like Education, Infrastructure, Utilities and Healthcare. In the second half of the year, the overall spends including on DMP increased resulting in recovery in both volumes and values.

It is expected that the Transaction printing will grow at a healthy rate driven by high investments in retail automation and expansion of core banking solutions by all the major banks. Government expenditure in 2010-11 is expected to be higher than 2009-10. No slow down is expected in IT spending by Government in E-Governance Initiatives, Public Sector Undertakings, Banking, Insurance and Finance and Retail segments.

Stability in policy frame-work both at the centre and the states is critical for sustenance and growth of business. Though overall sentiment for IT Hardware business remains sluggish, sectors like Retail, Manufacturing and Hospitality are expected to accelerate their IT spends given their focus to increase their products and services penetration into Heart of India. Small format or Mini printers (less than 10") are likely to play a key role in this growth phase.

Growth of retail and increased IT spend by the industry offers opportunity for the Company in the POS product category and solutions space in Banking and E-governance areas. There are more than 15 Million unorganized shops and establishments in the country that need digitization. Consistent with the Companys theme of Taking IT to the Heart of India the Company believes

that the customers prefer products that operate in humid and dusty environment with lowest cost of ownership and yet provide ease of operation and capability in Indian languages. With an enviable market reach as an advantage, the Company has introduced "Indi POS" range of products that not only meet the needs of customer but provide cost effective support.

B. Business Risks & Opportunities

Growth potential in DMP category is limited as transaction printing applications are getting migrated to alternative technologies like Laser and Thermal. Our Company intends to counter this through the following strategic initiatives :- - To sustain and lengthen the life of the DMP category the Company delivers value to its customers in this segment by offering continuous improvements to the products. The Supply chain and Technology teams support this process through many value engineering projects. Continuous quality improvement programs are in place at both manufacturing and supplier locations to reduce Service Incident Rates (SIR) and failure rates. Re-audit and re-certification of manufacturing processes, both in-house and at supplier-end, are regularly carried out to bring out corrective action as well as changes in a proactive way.

- To drive demand generation for the Companys products through effective engagement with its Channel partners, the Company has launched its "Sanskriti" program enabling the Company to connect and communicate with partners effectively.

- Building on successes of cost management in the current year, organization-wide engagement in various Total Cost Management initiatives is being sustained to provide long term cost advantage.

- POS domain has high potential to grow with large stakes and investments taking place in the Indian retail landscape. With the proposed introduction of GST (Goods and Services Tax), the demand for POS billing and printing products and services is set to grow rapidly in the next few years. The Company is making appropriate investments in high quality products and service capabilities to exploit these growing opportunities. The Company has entered into strategic relationships with core technology leaders in Taiwan and Korea to offer cutting edge products covering POS printing, automatic identification devices (bar coding), POS Terminals, Systems etc. The Companys "Indi POS" range of products is being expanded to provide one stop shop for meeting Retail IT needs of all small format shops and establishments.

- On the Sales and Service organization for both DMP and POS, the Company has initiated steps to revamp its existing Service network and Parts management processes thus improving the service deliverables to customers. The Company is in advanced stage of implementing SAP-CRM (Customer Relationship Management) module to improve warranty service levels and customer satisfaction. The CRM module will also provide better parts management capability to the Company. In the POS business, integrated sales and service architecture is being created to provide differentiation in Service and Customer Support to its customers including enterprise and retail.

C. Internal Control Systems and Risk Management

The Company has appointed M/s. V. Sankar Aiyar & Co. as its internal auditors. The Audit Committee of the Board reviews the findings and recommendations of the internal audit reports periodically. The Company follows the policy of fully hedging forex risk on its imports by taking full cover. During the year, the Company has embarked on the identification of key risks and safe guards as a part of risk assessment and management framework. A Risk management frame work has been prepared covering business, operational and financial risks.

D. Business Planning and Information Technology

The Company leverages its IT investment to drive robust business planning processes. The Company benefits from the SAP system especially with shortened planning cycles helping the Company to align to the requirements of market and customers.

E. Human Resource Development

Performance and Leadership are the corner stones for HR in the Organization. Significant investment year-after-year is made on people through extensive training & development programs. Good amount of resources have been invested to drive and embrace Change management processes across the Organization to create performance and growth focus. The overall performance management processes supported by our talent management programs now cover the entire organization and are constantly being reviewed for their effectiveness. The Company has invested well in SAP IT system covering HR processes with significant benefits. Induction of fresh talent from recognised Universities and Colleges at various levels remains an important theme. Training inputs include periodic interaction with domain experts particularly in the areas of HR and Total Quality Management.

F. Safety

Safety of products to customers and safe manufacturing practices are both critical parts of our value system. Training and audits are conducted frequently during the

year. The Company maintains consistent track record in terms of zero reportable accidents in the factories for several years now.

G. Corporate Social Responsibility

The Company is actively engaged in social welfare activities. These include eye camps, health checks for under privileged, blood donation camps and rehabilitation programs in villages. The Company provides scholarships to meritorious students who lack economic means to take care of basic and higher education.

Some of the specific programs carried out during the year were

- Provision of potable water for students in Rampur village near the Companys manufacturing facility at Uttranchal.

- Eye camps for the school children in Tumkur, Karnataka benefiting many.

- Regular Blood donation camps at Companys facilities with very good response from participants/employees.

Subsidiary Companies

Prime Property Holdings Ltd, one of the wholly owned subsidiaries of the Company sold part of its property at Chennai and has paid back the Company Rs.9 Cr towards part consideration.

Tumkur Property Holdings Ltd, the other wholly owned subsidiary did not have any operations during the year.

Dividend

Considering the current financial position of the Company, the Directors regret their inability to recommend any dividend for the financial year ended 31st March, 2010.

Directors

Mr. D Sundaram was appointed as an Additional Director on 30th July, 2009. The shareholders approved his appointment as Director at the Annual General Meeting held on 4th September, 2009.

Mr. Kenneth Tai was appointed as an Additional Director on 29th July 2010. He will be holding office till the conclusion of the ensuing Annual General Meeting.

Notice under section 257 of the Companies Act, 1956 proposing his candidature for the office of the Director has been received by the Company and suitable resolution will be placed at the Annual General Meeting for appointment.

Mr. S S Raman was appointed as the Whole time Director of the Company pursuant to Sections 269, 309 and 314 read with Schedule XIII of the Companies Act, 1956, for a period of three years without any remuneration effective 1st May, 2009 and the same was approved by the Shareholders at the Annual General Meeting held on 4th September, 2009. At the Board meeting held on 24th April, 2010 Mr. S S Raman, Whole time Director was appointed as Managing Director of the Company from 1st April, 2010 to 30th April, 2012. The appointment and the remuneration payable to him is subject to the approval of the shareholders in a general meeting.

Mr. R Ramaraj and Mr. H Lakshmanan, Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Necessary resolutions are being placed before the members for approval.

Auditors

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai (Registration No. 004207S) retire at the ensuing Annual General Meeting and are eligible for reappointment.

Employee Stock Option Plan

Out of the total obligation of 2,11,000 options issued to the eligible employees of the Company under the Employees Stock Option Scheme (ESOP) in 2003, 1,85,500 options lapsed. 25,500 stock options are still in force as on March 31, 2010 and these options were issued at the rate of Rs.70 per share and entitles the holder thereof to apply for and be allotted one equity share of the Company of the nominal value of Rs.10/-each on payment of the exercise price during the exercise period. No fresh ESOP options have been issued during the financial year ended 31st March, 2010.

Details of the options granted and options in force as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure "A" to this Report.

Personnel

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure "B" to the Directors Report.



E-Waste Management

Company has taken up initiatives on E-Waste management for safe recycling of waste generated in manufacturing and further measures are planned to address the E-Waste on end to end basis.

Report on Energy Conservation and R & D activities Information relating to energy conservation, foreign exchange earned and spent and research and development activities undertaken by the Company in accordance with the provisions of Sec. 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosures of particulars in the report of Board of

Directors) Rules 1988 are given in Annexure "C" to the Directors report.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report and a Corporate Governance Report are made a part of this Annual Report.

A certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the listing agreement is attached to this report. Directors Responsibility Statement As required by Sec. 217(2AA) of the Companies Act, 1956, the Directors hereby state:

i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; ii) that 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 (namely 31st March 2010) and of the loss of the Company for that period; iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the Directors had prepared the annual accounts for the year ended 31st March 2010 on a "going concern" basis.



GENERAL

The Directors wish to place on record their appreciation for the committed service of employees for its growth. The Directors would also like to express their grateful appreciation for the assistance and co-operation received from the customers, dealer partners, bankers, business partners and its Group Companies TVS Investments Limited and Sundaram-Clayton Limited during the year.

The Directors thank the Shareholders for the continued confidence and trust placed by them with the Company.

For and on behalf of the Board

Chennai GOPAL SRINIVASAN 29th July, 2010 Chairman

 
Subscribe now to get personal finance updates in your inbox!