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Directors Report of TVS Electronics Ltd.

Mar 31, 2018

The Directors have pleasure in presenting the 23^rd Annual Report of your Company for the financial year ended 31^st March 2018. The Management Discussion and Analysis (MDA) is an integral part of this report.

Financial Results

The financial performance of the Company for the year ended 31st March 2018 is summarized below. The financial statements for the year have been prepared in accordance with the new mandatory accounting standard Ind AS and necessary changes were made to the corresponding figures of the previous year.

Standalone (Rs. in Lakhs)

Particulars	Year ended 31.03.2018	Year ended 31.03.2017
Revenue from operations	417,798	252,316
Earnings Before Interest & Tax (EBIT)	2,218	1,154
Profit/ (Loss) Before Tax (PBT) and exceptional items	2,076	873
Exceptional items / Extra-ordinary Items	369	-
Profit / (Loss) Before Tax	2,445	873
Profit / (Loss) After Tax (PAT)	1,624	633
Add: Brought forward from previous year	2,981	2,348
Less: Dividend on equity shares (incl. taxes)	(112)	-
Retained earnings	4,493	2,981

Company performance

During the year under consideration, the Company improved its margins on its IT Products and Technical Services due to productivity improvement measures and cost management initiatives undertaken. The margins from Distribution business was also higher owing to higher volumes of mobile phones distributed by the Company. The revenue figures are not directly comparable due to method of accounting followed on account of GST effective 1 ^st July, 2017.

Earnings before interest and taxes for the year have almost doubled to Rs. 2,218 lakhs from Rs. 1,154 lakhs, thanks to strong performance from almost all our segments. IT Products and Technical Services turned around significantly to post an EBIT of Rs. 1,106 lakhs in FY 17-18 from a loss before interest and taxes of Rs. 116 lakhs the previous year. The EBIT from Distribution Services also increased to Rs. 1,261 lakhs from Rs. 963 lakhs. Other income for the year was at Rs. 220 lakhs vis-a-vis Rs. 307 lakhs the year before. The growth in EBIT has resulted in the Companyâs Profit Before Exceptional items rising to Rs. 2,076 lakhs in FY 17-18, from Rs. 873 lakhs the previous year.

The free cash flow growth continued to be robust for the third year in succession resulting in reduced borrowing and consequently reduced finance cost to the Company. During the year, as part of consolidation exercise, the Company shifted its small PoS products manufacturing facility from Oragadam, Chennai to its main facility at Dehradun.

The profit before tax for FY18 was Rs. 2,445 lakhs, an almost three-fold increase from the previous yearâs number of Rs. 873 lakhs. The PAT increased to Rs. 1,624 lakhs from Rs. 633 lakhs.

During the year the Company successfully amalgamated its wholly owned subsidiary Prime Property Holdings Limited (PPHL) with itself, after requisite approvals from its shareholders and the National Company Law Tribunal. This added over Rs. 7 cr to the net worth of the Company.

FY18 had been a year of watershed reforms in India, which have turned out to be disruptive for businesses that were ill-prepared for change. Even as India Inc was in the process of recuperating from the demonetization of high-value currency notes in November 2016, the Centre decided to expedite the transition to Goods and Services Tax, which was introduced with effect from July 2017.

However, the Company had viewed both these policy actions as opportunities to leapfrog its market share and growth metrics. The supply chain was thoughtfully planned in advance of the GST rollout, timely changes in tax rates and procedures were incorporated into the ERP application, and channel supplies were enhanced to captalise on the momentum. The market was quite receptive to early movers post- GST. As a result the Company registered over 30% volume growth in Thermal and Label Printers and over 23% in Scanners for the year. However, traction in business from the Government and the banking sector remained subdued even several months after the introduction of GST.

On the Technical Services front, there was significant improvement in the last quarter as the Company bagged new enterprise orders to install and service EDC terminals, Air Conditioners, TVs and IT assets.

During the year, the footprint for the Companyâs retail walk-in services was extended to 119 partner centers and 54 own centers. The take-off in consumer electronics is expected to generate considerable growth potential for this technical services business, as there are a very few national players in this segment. Leveraging on its rich experience, the Company continues to provide best in class services to the customers with a strong value proposition to the brands it is associated with.

The Company has renewed its Distribution contract for the year and has commenced selling television sets in addition to mobile phones and accessories. With installation capabilities added to this offering, it may usher in synergistic benefits to this segment. Nonetheless, your Company views the dynamics of Distribution services segment as very volatile and susceptible to macroeconomic and regulatory changes.

Dividend

The Directors are pleased to recommend a dividend of Rs. 1.50 per equity share for the financial year ended 31^st March 2018 (Previous Year 50 paise per equity share). The dividend, if approved by shareholders would absorb Rs. 336.58 lakhs, including taxes (Previous year 112.54 lakhs, including taxes) on 1,86,12,818 Equity Shares of Rs. 10/- each and will be paid to all the equity shareholders whose names appear in the Register of Members of the Company and depositories as on 2^nd August 2018.

Safety

The Company is fully committed to the ultimate goal of employee safety. Safety training and safety audit are frequently conducted enabling the Company to maintain an accident-free record at its factories for several years.

Code of Business Conduct and Ethics

The Company has in place the Code of Business Conduct and Ethics for member of the Board and senior management personnel (the Code) approved by the Board. The Code has been communicated to directors and the senior management personnel. All the members of the Board and senior management personnel have confirmed compliance with the Code of Business Conduct and Ethics for the year ended 31^st March, 2018. The Annual Report contains a declaration to this effect signed by Chief Executive Officer. The Code is available on the Companyâs Website www.tvs-e.in.

Vigil Mechanism / Whistle Blower policy

The Company has established a vigil mechanism, which is overseen by the Audit Committee. The Chairman of the Audit Committee has been appointed as the Ombudsman for the Vigil mechanism. The policy provides a formal mechanism for all directors, employees to report to the management, their genuine concerns or grievances about unethical behaviour, actual or suspected fraud and any violation of the Companyâs Code of Business Conduct and Ethics policy. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning Company. The Policy is available on the Companyâs Website www.tvs-e.in.

Prevention of Insider Trading

The Company has a Code of Conduct for Prevention of Insider Trading in line with SEBI (Prevention of Insider Trading) Regulations, 2015. The Code has been communicated to all the employees at the time of orientation and adhered to by the Board of Directors, senior management personnel and the other persons covered under the code. The Company follows closure of trading window prior to publication of price sensitive information. The Company has adopted Fair Practices Code (FPC) as per the regulations. Code of Conduct for Insider Trading Regulation and the Fair Practices Code are available on the Companyâs Website www.tvs-e.in.

Holding Company

During the year under review, the Holding Company M/s. TVS Investments Private Limited (TVSI) [formerly Sundaram Investment Limited] was converted into a private limited company with effect from 2^nd November 2017, vide Order of the National Company Law Tribunal dated 21^st June 2017. TVSI holds 59.96% of the outstanding equity in the Company as on 31^st March 2018 (previous year: 59.96%). The change in the constitution of the holding company does not have any impact on the Company.

Scheme of Amalgamation

During the year, Honâble National Company Law Tribunal (NCLT), vide its order dated 27^th March 2018 sanctioned the Scheme of Amalgamation of Prime Property Holdings Limited (PPHL), its wholly owned subsidiary with the Company. The Scheme came into effect from 29^th March 2018. The Appointed date of Scheme was 1^st April 2016. The Scheme was approved by NCLT without any modification. The investment made by the Company in PPHL amounting to Rs. 5 Lakhs consisting of 50,000 Equity shares of Rs. 10/- each was cancelled. The Board of Directors of PPHL has also ceased and PPHL was dissolved without any process of winding up with effect from 29^th March 2018.

Subsidiary Company

Benani Foods Private Limited

Benani Foods Private Limited (Benani), a company started in the year 2014, is manufacturing and trading âready to eatâ and âready to cookâ products. Benani was an associate of Prime Property Holdings Limited (PPHL), having 34.06% stake as on 31^st March 2017. PPHL has invested in Benani during 2015. Consequent to amalgamation of PPHL with the Company, Benani has become direct investee in the Company.

Since 2014, Benani has scaled up in the last 4 years supplying to over 1000 retail outlets in Chennai and also to institutional customers like educational institutions, hospitals, restaurants, corporates etc., Benaniâs retail sales has gone up to 49% in 2017-18 though institutional sales has come down due to GST.

The Company currently holds 41.80% in Benani. Though the shareholding and Board composition in Benani is less than half, since the Company has affirmative voting rights, the Company is considered to have significant influence in Benani under applicable Indian Accounting Standards. Hence, Benani is considered as a subsidiary of the Company.

During the year 2017-18, Benaniâs revenue was Rs. 444 Lakhs. Being a start up company, Benani has posted loss of Rs. 197 Lakhs, due to high sales and distribution costs. Benani is planning to improve sales in the current year to increase number of retail customers through 1500 shops.

Though Benani is not a material subsidiary, the Company has nominated a director to the Board of Benani to oversee the performance of the subsidiary. Further, the Board of Directors of the Company review the performance of the subsidiary in its quarterly board meetings, as well.

Consolidated Accounts

The Consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of Companies Act, 2013 read with Companies (Accounts) Rules, 2014 and Regulation 33 of SEBI (LODR) Regulations, 2015.

A Statement in form AOC -1 under Section 129(3) of the Companies Act, 2013 is enclosed as Annexure A. The audited consolidated financial statements together with Auditors report forms part of the Annual report.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the audited financial statements of BFPL will be made available to the shareholders, on receipt of a request from any shareholder of the Company and it has also been placed on the website of the Company at www.tvs-e.in. This will also be available for inspection by the shareholders at the Registered Office of the Company, during business hours.

Annual Return

Extract of Annual Return in Form MGT-9 is given as Annexure B to this report.

Number of Board Meetings

The Board of Directors met five times during 2017-18. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.

Share Capital

The paid up share capital of the Company as on 31st March 2018 is Rs. 18,61,28,180/- consisting of 1,86,12,818 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 granted any fresh loans or guarantees or provided any security in connection with any loan to any other body corporate or person covered under the provisions of Section 186 of Companies Act 2013. The details of investments made by the Company are given in the financial statements.

Related Party Transactions

All the related party transactions entered into are on âarmâs lengthâ basis and in the ordinary course of business and are in compliance with the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. None of the transactions are in the nature of having any potential conflict with the interests of the Company at large. There were no material related party transactions during the year.

Omnibus approvals are obtained for related party transactions which are repetitive in nature. In respect of unforeseen transactions, specific approvals are obtained. All related party transactions are approved / reviewed by the Audit Committee on a quarterly basis, with all the necessary details and are presented to the Board and taken on record. The details of transactions with related parties are provided in the financial statements. The Related Party Transactions policy as approved by the Board is uploaded on the Companyâs website at www.tvs-e.in.

Directors and Key Managerial Personnel Independent Directors

All independent Directors hold office for a fixed period of five years and are not liable to retire by rotation. 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 Regulation 16 (1) (b) of the SEBI (LODR) Regulations. 2015. The terms of appointment of Independent Directors are available in the Companyâs website www.tvs-e.in.

During the year, Mr. Kenneth Tai, an Independent Director resigned from the Board of Directors of the Company with effect from 9^th November 2017. The Board places on record its deep appreciation for his valuable advise and guidance and for his contribution to the Board during his tenure with the Company.

Separate Meeting of Independent Directors

During the year, a separate meeting of Independent Directors was held on 12^th May, 2017. The Independent Directors actively participated and provided guidance to the Company in all its spheres.

Retirement by rotation

Mr. Narayan K Seshadri (DIN: 00053563), 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.

Managing Director

The Board of Directors at their meeting held on 11^th May, 2018, based on the recommendation of the Nomination and Remuneration Committee (NRC), appointed Mrs. Srilalitha Gopal (DIN: 02329790), as Managing Director of the Company, liable to retire by rotation, for a period of 5 years from 11^th May 2018 to 10^th May 2023, for a total remuneration of Rs. 1.50 Cr p.a. subject to approval of the shareholders.

Both NRC and the Board observed that the proposed appointment of Mrs. Srilalitha Gopal as Managing Director satisfies the requirements of the provisions of Section 196(3) and Part I of Schedule V of Companies Act, 2013.

Mrs. Srilalitha Gopal is also the Managing Director of Harita Techserv Limited (Harita), a company engaged in design engineering and skilled technical engineering service business since 2008. As the Managing Director of both Harita and the Company, she is entitled to draw remuneration from one or both the companies, provided that the total remuneration drawn from both the companies does not exceed the higher maximum limit admissible from any one of such companies.

In the case of inadequacy of profits, she will be paid the same proposed remuneration as the minimum remuneration, subject to the maximum applicable limit under Part II Section II Para A of Schedule V of Companies Act 2013, read with provisos thereunder, based on the effective capital of the Company.

Woman Director

In terms of Section 149 of Companies Act, 2013 and SEBI(LODR) Regulations, 2015, the Company is required to have a woman director on its Board. Mrs. Srilalitha Gopal, Managing Director is already on the Board of the Company from 10^th November 2011 and hence the Company fulfills the requirements of the said section.

Brief resume of Directors

The brief resume of directors proposed to be appointed and re-appointed and other relevant information have been furnished in the Notice of Annual General Meeting (AGM). Appropriate resolutions for their appointment and re-appointment are being placed for approval of the shareholders at the AGM.

Key Managerial Personnel (KMPs)

In terms of Section 2(51) and Section 203 of the Companies Act, 2013, Mrs. Srilalitha Gopal, Managing Director, Mr. Prakash Katama, Chief Executive Officer, Mr. Karthi Chandramouli, Chief Financial Officer and Ms. S Nagalakshmi, Company Secretary are the key managerial personnel of the Company, as on date of this report.

Evaluation of the Boardâs performance

The Board has carried out an evaluation of its own performance, and that of its directors including Independent Directors individually and the sub committees of the Board. 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.

Nomination and Remuneration Policy The Nomination and Remuneration Committee of the Company review the composition of the Board, to ensure that there is an appropriate mix of abilities, experience and diversity to serve the interests of the shareholders of the Company.

In accordance to Section 178 of Companies Act, 2013, the Nomination and Remuneration Policy was formulated to govern the terms of nomination, appointment and remuneration of Directors, Key Managerial and Senior Management Personnel of the Company.

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 available on the Company Website www.tvs-e.in.

Statutory Auditors

M/s Deloitte Haskins & Sells, Chartered Accountants (FRN:008072S) were appointed as the Statutory Auditors of the Company at the 22^nd Annual General Meeting of the Company held on 30^th June 2017 for the first term of 5 years to hold office up to the conclusion of the 27^th Annual General Meeting. in terms of the notification issued by Ministry of Corporate Affairs dated 7^th May 2018, the requirement of obtaining shareholderâs ratification every year has been done away with and requires only the Board approval. Accordingly, the Board of Directors of the Company at its meeting held on 11^th May 2018 approved their appointment for the 2^nd year (2018-19) in their first term of 5 years to hold office till the conclusion of next annual general meeting.

Internal Auditors

The Company has appointed M/s. Grant Thornton India LLP, as the Internal Auditors for the year 2018-19.

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 1^st April 2015.

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 2018-19.

Secretarial Auditors

The Secretarial Auditors of the Company M/s. S Krishnamurthy & Co., Practising Company Secretaries, Chennai carried out Secretarial Audit for the financial year 2017-18 and the same is annexed as Annexure C.

The Company has complied with the applicable secretarial standards during the year.

Clarification to the observations in the Secretarial Audit Report

The Company is in the process of identifying a suitable person for the position of Independent Director and the process is expected to be completed shortly. Once the appointment is made, the Board composition will also be in accordance to the SEBI (LODR) Regulation, 2015. The rest of the observations are self explanatory and hence does not call for any further clarification.

Employee Stock Option Plan

During the year, no stock options were granted under the Employees Stock Options Scheme, 2011. The current position of the Stock Options granted under Employees Stock Option Scheme 2011 are provided in this Report as Annexure D.

Credit Rating

The Company has obtained credit rating for the various borrowing facilities from Brickworks Ratings India (P) Ltd., and the same has been renewed and intimated to the Stock Exchanges.

Transfer to Investor Education and Protection Fund

There was no amount required to be transferred to Investor Education and Protection Fund during the year.

Particulars of Employees and related disclosures

The particulars of the employees covered by the provisions of Section 197 (12) of Companies Act, 2013 and the rules thereunder forms part of this report. However, as per the provisions of Section 136(1) of Companies Act, 2013, the annual report is being sent to all the members excluding this statement. This will be made available for inspection at the Registered Office of the Company during working hours.

Comparative analysis of remuneration paid

A comparative analysis of remuneration paid to Directors and employees with the Companyâs performance is given as Annexure E 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 1^st 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, technology absorption, foreign exchange and research and development

Information relating to energy conservation, technology absorption, 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 F to the Boardâs Report.

Corporate Social Responsibility

Corporate Social Responsibility (CSR) activities have been embedded in the value system of the Company for many decades. The Company continues to be actively engaged in CSR initiatives for development of the society through partnerships and continued to focus on to helping lesser privileged communities in areas like education, health & hygiene, culture & heritage and actively participated in other welfare projects.

The provisions of Section 135 of Companies Act, 2013 became applicable to the Company with effect from 1^st April 2017. Accordingly, the Board of Directors of the Company, at their meeting held on 12^th May 2017, constituted the CSR Committee, the details of which are provided in the Corporate Governance report.

Based on the recommendation by the CSR Committee, the Board has approved the projects / programs to be undertaken as CSR activities for a sum of Rs. 13 Lakhs during the financial year 2017-18. The details of CSR activities has been provided as Annexure G to this report.

Corporate Governance

Pursuant to Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis Report and a Corporate Governance Report are made part of this Annual Report.

A Certificate from the Practising Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is forming part of Annual 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 31^st March, 2018.

Material changes and commitments

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

Significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company

There are no significant and material orders passed by the regulators or courts or tribunals, which would impact the going concern status of the Company and its future operations.

Reporting of Fraud

During the year under review, neither the statutory auditors nor the secretarial auditors has reported any instances of fraud committed against the Company by its officers or employees, as specified under Section 143(12) of Companies Act, 2013.

Other laws

During the year under review, no complaints have been received under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There have been no complaints pending for disposal.

Directorsâ Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultants, advisors of the Company and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year 2017-18.

The financial statements have been prepared in accordance with the Indian Accounting Standards, which has become applicable to the Company with effective from 1^st April 2017.

In terms of Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, further confirm:

i. that in the preparation of the annual accounts for the financial year ended 31^st March, 2018, the applicable Indian 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 31^st March, 2018 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 31^st March, 2018 on a âgoing concernâ basis;

v. that they had laid down internal financial controls which are adequate and are operating effectively;

vi. that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such 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 TVS Investments Private Limited and T.V.Sundram Iyengar & Sons Private Limited.

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

For and on behalf of the Board

Gopal Srinivasan

Chennai Chairman

11^th May, 2018 DIN: 00177699

Mar 31, 2017

Boardâs Report to the Shareholders

The Directors have pleasure in presenting the 22^nd Annual Report of your Company for the financial year ended 31^st March, 2017. The Management Discussion and Analysis (MDAR) is an integral part of this report.

Financial Results

The financial performance of the Company for the year ended 31^st March 2017 is summarized below:

(Rs, in Lakhs)

Particulars	Year ended 31.03.2017	Year ended 31.03.2016
Revenue from operations (Net)	2,62,503	59,349
Earnings Before Interest & Tax (EBIT)	877	904
Profit/ (Loss) Before Tax (PBT) and before exceptional items	632	331
Exceptional items / Extra-ordinary Items	.	207
Profit / (Loss) Before Tax	632	538
Profit / (Loss) After Tax (PAT)	716	431
Add: Brought forward from previous year	629	198
Total available for appropriations	1,345	629

Company performance

Revenue from operations, net of excise duty has increased to Rs, 2,62,503 lakhs as against Rs, 59,349 lakhs in the previous year. Of this, revenue from core IT Products and Technical Services has grown to Rs, 30,890 lakhs from Rs, 29,677 lakhs in the previous year - a growth of 4.08%. The Earnings before interest and taxes for the year has dropped to Rs, 877 lakhs from Rs, 904 lakhs in the previous year, chiefly due to the gestation phase of a few new exclusive smart mobile service centers and the decline in service calls from certain existing exclusive service centers. The Company is taking actions towards course correction, as explained in the Managementâs Discussion. However, the Profit before tax before exceptional items, has grown significantly from Rs, 331 lakhs in previous year to Rs, 632 lakhs in FY 2016-17 owing to a reduction in finance and interest costs.

Ever since the Centre withdrew the legal tender status of high value currency notes in November, there has been a sea change in the way Indians are transacting. Prior to this event, a majority of consumers were accustomed to transacting only by cash; even leading ecommerce sites reported a high consumer preference for Cash on Delivery (estimated 83 percent of ecommerce transactions - which includes 72 percent from major cities and 90 percent from smaller towns). However, with demonetization leading to paucity of hard cash, citizens were nudged to transition to digital transactions. Banks tied up with merchants to equip them with Point of Sale (POS) machines to sustain their business. When the demonetization initiative was announced, the Company quickly stepped up to help its banking clients to recalibrate their ATMs and install new POS terminals to aid the Rs ,less-cash'' efforts of the Government. This timely and need-of-the-hour servicing not only reiterated the quality of manpower at the Company''s disposal, but also its capability to step up to the occasion during a national emergency. With 10 years of experience in serving national banks and as a frontrunner in the POS peripheral hardware space for 20-plus years, the Company is looking to leverage burgeoning opportunities in this space and further enhance its offerings.

Dividend

The Directors are pleased to recommend a dividend of 50 paise per share for the financial year ended 31^st March 2017 (Previous Year Nil). The dividend, if approved by shareholders would absorb Rs, 112.54 lakhs (including taxes) and will be paid to all the equity shareholders whose names appear in the Register of Members of the Company and with the Depositories as on 23^rd June 2017.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis forms an integral part of this report and gives details of the overall industry structure, economic developments, performance and state of affairs of the Companyâs two business lines viz., IT related Products and Technical Services and Distribution Services, internal controls and their adequacy, risk management systems and other material developments during the financial year 2016-17.

Economy and macro trends:

The transition to a less-cash economy, set in motion by the note replacement exercise, is just one of many steps initiated by the NDA government to transform India into a digitally empowered nation. As you may know, the government is currently working on a series of initiatives that seek to establish three strong pillars for a transition to Digital India. There are plans to address internet reach and connectivity issues across India by ramping up the national broadband network and providing more public Wi-fi hotspots so that all citizens have access to safe and secure cyber-connectivity. A series of e-governance initiatives are being flagged off to ensure that all interactions between the government and its citizens are brought online for enhanced transparency. Thereâs also an accompanying thrust on universal digital literacy and universal access to digital infrastructure.

While the government is putting in place the enabling infrastructure for Digital India, the private sector is also gearing up in many ways for digital disruption. The traditional retail business has already been revolutionized by e-commerce. Companies are increasingly relying on data mining and analytics to improve their strategic decision-making. Multi-national companies, BFSI players, leading FMCG firms have all jumped on to the digital bandwagon and are looking in to tap the potential of big data to gauge consumer trends, garner consumer feedback and improve the quality of service. This has motivated, and in a few cases, forced regional players to up their game and stay competitive too. Itâs not just the regional chains but also the âmom and popâ - the kirana stores - that are showing increased interest in tapping into technology. However, high costs and lack of service support have been a constraining factor. This is a gap that the Company is looking to bridge.

The Company is looking to assist mid and small scale enterprises in monitoring consumer buying behavior in order to adopt targeted marketing strategies through efficient data capture. The enterprises who have built their payment and billing infrastructure are today limited by the non-availability of quality POS products and the lack of efficient after-sales service. This is also a challenge that the Company looks forward to taking head-on. The Companyâs aim is to provide a holistic offering of product and service support that connects an enterprise to its customers. We plan to leverage our well-established distribution & service networks to help enterprises achieve their digital transformation.

Overview of financial and operating performance:

The year witnessed some ups and downs but ended on a positive note for the mainstream IT Products and Technical Services business. The Companyâs robust product quality, coupled with its âMake in Indiaâ edge helped it gain a further 3% market share in Dot Matrix printers. We closed the year with a 40% share in Dot matrix printers despite the segment experiencing a decline as discussed in our previous annual reports. The Company also registered strong growth of 40 % year-on-year in its Point of Sale printers range viz., Thermal and Label printers - a high growth segment which, of late is explored by many new semi-brands. Besides catering to the market through its own product range, the Company also markets select global brands under exclusive India distribution agreements. Today, the Company is the only one in India offering POS Thermal printers with multiple options and variants at different price points.

The other high growth product range, Label printer is equally promising where the Company retains its market share at 19%. Both these POS printer ranges along with Scanners and POS DMPs are the core focus for expansion and deeper penetration. The advent of GST added with the governmentâs serious demonetization drive can leapfrog growth rates for the industry as a whole. The Century-old trust and deep appreciation of the market and customer preferences makes the Company the brand of choice for any retailer in India.

During the year, the Services arm has gone through a consolidation exercise where a handful of service centreâs were either merged or exited. The Company continues

A high pace of technological change, online distribution and deep-discount pricing are all set to provide a renewed push to the smart phone category. Rapid changes in consumer preferences with respect to Smartphone brands and the improvements in quality standards led to a decline in footfalls in some of our exclusive service centreâs and repair hubs. However, newly opened service outlets of a couple of brands have completed their gestation period to end the financial year with positive margins. These factors reflect in the overall operating loss of Rs 86 lakhs (Previous Year operating profit Rs 810 lakhs) for the core IT Products and Services division. to be one of the top 3 national partners for marquee electronic brands to operate authorized in-warranty and

post-warranty services. The year also witnessed the opening of 11 new service centreâs in various cities and towns. The total count of these centreâs was over 60 by year-end.

Besides running exclusive brand service centreâs for its strategic partners, the Company also offers service solutions for multiple brands under one roof in select geographies. These Multi brand service centreâs offer authorized in-warranty and out-of-warranty services for multiple brands covering smart phones, laptops, personal computers, printers etc. The Company remains the preferred national service partner for major brands in the Mobile Phones, Computers and other IT products for both warranty and repair services. The Companyâs e-Auction platform âauctionindia.comâ continued registering steady growth in FY 2016-17.

The Companyâs âDistribution Servicesâ line had shown remarkable traction during the year. As this business focuses on high volumes and controlled risks, the margins earned are low. The profit from this division for the year in absolute terms was Rs963 lakhs (Previous year Rs94 lakhs) which is fully attributable to the successful partnerships the Company has built. The dynamics of this distribution service are very volatile and susceptible to macroeconomic and regulatory changes.

Staying true to the Companyâs aim of evolving with the needs of its customers and the industry, the Company as a manufacturer of Dot Matrix Printers, augmented its services to meet the entire range of customer requirements - from providing POS installation services to data capturing solutions.

It is becoming increasingly evident that data capture and mining will play a critical role in business success in future. The fast spread of telecom networks will additionally ensure that the best of digital technology reaches the last mile. With government spending on infrastructure and Telecommunications, the use of data capture devices like NFC and POS terminals may be used more widely in a multiple applications. Data capture, storage and analytics will be critical in powering Smart Cities, a marquee government project. As one of the leading B2B service providers in this segment in the country, the Company hopes to remain a go-to brand for enterprises looking to deploy POS terminals. In addition, the Company has enhanced its services to emerge as a leading service partner to major smart phone vendors, from market leaders to new entrants and innovates its processes. Its strong direct and indirect workforce of 2000 on-field engineers are tasked with providing strong customer support.

Besides technological upgrades, the smart phone segment is also witnessing the broader consumer trend of premiumization. While the sub Rs8,000 price category is witnessing a decline, encouragingly, phones priced above Rs8,000 are seeing traction. The company offers services for the top 2 pan-India brands and may add more such brands under the MBO umbrella. The Company expects the MBO initiative to be the strong growth driver for its Service line as these service outlets would be able to several multiple devices progressively, including smart phones, laptops, PCs, and printers. The Company prefers to offer these services only under the authorized partnership format through alliances with interested brands. With the long pedigree of being a consumer brand, the rich experience in electronics and service delivery, the Company is optimistic about redefining the customer experience through its own multiband service centers.

The company plans to expand its MBO footprint across the nation with an asset-light model, in addition to running the current exclusive service outlets. The onsite service delivery model envisages large-scale additions of regional and rural partnerships in order to widen its reach. The two primary service delivery models would reap cross-pollination benefits, as the respective categories expand. With cost-consciousness at the forefront, the key focus area for the Service line is to contribute positive margins in the quarters to come.

The Companyâs flagship Products line appears set to achieve good growth rates, the drivers not just being government reforms, but also our own unique insights into customer needs and preferences. This deep understanding of customers, acquired over the years, help the company continuously innovate on new product ranges in the POS line, in the form of Touch POS terminals, Bluetooth printers, special scanners etc. The reforms push of government may trigger a catch-up in growth rates between Tier 1, 2 and to some extent tier 3 cities / towns. We find that new-generation retailers adapt faster to technology and prefer to be more organized. These patterns are already visible in smaller towns / up-country locations and encourages the company to expand its distribution and service reach to newer areas. While the larger business pie will continue to originate from the metros thanks to GST and digital initiatives, the growth from non-metros also offers a promising opportunity for the Company.

In addition to leveraging on the strong government supplies network and distribution channels, the Company has started partnering with Retail Solutions Providers and Systems Integrators more proactively. These partnerships are a demonstration of the robust product quality of the Companyâs POS line.

Cautionary Statement:

Statements in the Management Discussion and Analysis Report describing the Companyâs objectives, projections, estimates and expectations may be âforward looking statementsâ within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companyâs operations, include, among others, economic conditions affecting demand/supply and price conditions in the domestic and overseas markets, changes in Government regulations, tax laws and other statutes and incidental factors.

Business Risks & Opportunities

The Companyâs key imperative over the medium term will be sustaining the current revenue streams, even as we build a strategic framework and drive the Servicetec business, leveraging macro trends and business opportunities as described elsewhere.

Key success factors (and therefore risks) are predicated on the timely execution of these plans, building the internal capabilities by attracting and retaining talent and keeping pace with technological and market changes. The Board and management of the Company are confident of proactively managing these risks.

Internal Control Systems and their adequacy

The Company ensures that all transactions are authorized, recorded and reported and has adequate internal control systems to ensure that assets are safeguarded and protected against any loss. The key processes are aligned with ISO9001:2008 system and audited periodically for compliance.

The scope and authority of the Internal Auditors are clearly defined. The findings and recommendations of the Internal Auditors are reviewed by the Audit committee of the Board on a periodical basis and necessary corrective actions by the process owners are taken.

Internal Financial Controls

The Company has established Internal Financial Controls framework including internal controls over financial reporting, operating controls and anti-fraud framework. The framework is reviewed regularly by the Company and tested by the internal auditors and presented to the audit committee. Based on periodical testing, the framework is strengthened, from time to time, to ensure adequacy and effectiveness of Internal Financial Controls.

Risk Management process

Our Company has an established Risk Management Process which is tested by the internal auditors and overseen by the Audit Committee through a structured framework. The framework is implemented through a bottom up approach identifying, assessing, monitoring and managing key risks across the Companyâs business units. The management of the Company has reported to the Board that the Companyâs risk management and internal compliance and control system is operating effectively.

The Company follows the policy of hedging forex risk on its imports by taking full cover.

At present, in the opinion of the Board of Directors, there are no risks which may threaten the existence of the Company.

Business Planning and Information Technology

The Company has moved its applications and data base to a Cloud-based server as planned during 2015-16. This has resulted in de-risking the storage of critical information in our own hardware. The Company also simultaneously monitors software up gradation which helps run business operations in an efficient manner.

The data analytics capabilities acquired by the Company last year helps capturing relevant information for decision-making across various businesses. The information dashboards so generated helped the management and operating teams to have real-time information on process controls and take pro-active steps to manage operations.

Human Resource Development

The Company has developed structured HR policies and programs in the areas of resourcing, performance management systems, competency-based training and development and talent management to support the current and future needs of the organization.

Leadership development is a key focus area and the Company continues to develop internal talent through structured talent assessment programs, job rotation and cross-functional team assignments.

Learning & Development is another focus area wherein technical training is given to employees through internal trainers. Employees are also encouraged to participate in external programs to acquire new skills and update their knowledge based on latest trends in the industry.

The Company continues to engage the employees through different forums. The annual Management Kick-off (MKO) meeting is organized for annual goals deployment and followed by a midyear goal alignment meeting, for review. As part of the âAwards, Recognition & Communicationâ (ARC) program, the Company recognizes valued employees for their exceptional performance throughout the year.

Safety

Corporate Social Responsibility

However, the provisions of Section 135 of Companies Act, 2013 has become applicable to the Company with effect from 1^st April 2017. Accordingly, the Board of Directors of the Company, at the Board meeting held on 12^th May 2017, constituted the CSR Committee, the details of which are provided in the Corporate Governance report.

Code of Business Conduct and Ethics

All the members of the Board and senior management personnel have confirmed compliance with the Code of Business Conduct and Ethics for the year ended 31^st March, 2017. The Annual Report contains a declaration to this effect signed by the Chief Executive Officer for the Code. The Code is available on the Companyâs Website www.tvs-e.in.

Vigil Mechanism / Whistle Blower policy

The Company has established a vigil mechanism, which is overseen by the Audit Committee. The Chairman of the Audit Committee has been appointed as the Ombudsman for the Vigil mechanism. The policy provides a formal mechanism for all directors, employees to report to the management, their genuine concerns or grievances about unethical behavior, actual or suspected fraud and any violation of the Companyâs Code of Business Conduct and Ethics policy. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning Company. The Policy is available on the Companyâs Website www.tvs-e.in.

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 15^th May, 2015. The Company has adopted Fair Practices Code (FPC) as per the regulations. The Board and the designated employees of the Company have confirmed compliance with the FPC as applicable as on 31^st March 2017. Code of Conduct for Insider Trading Regulation and the Fair Practices Code are available on the Companyâs Website www.tvs-e.in.

Holding Company

TVS Investments Limited (TVSI), our Holding Company holds 59.96% of the outstanding equity as on 31^st March 2017 (previous year 60.15%). TVSI has applied to National Company Law Tribunal for conversion into a private limited company. The change in the constitution of TVSI will not impact the Company in any manner.

Subsidiary Company

Prime Property Holdings Limited (PPH), is the Companyâs Wholly Owned Subsidiary, in which the Company holds 100% of 50,000 Equity Shares of the Company at Rs.10/- each.

As already informed to the members, PPHL (Transferor) filed the necessary documents for an amalgamation with the Company (Transferee) with the stock exchanges. The stock exchanges have accorded their in-principle approval for the Scheme and steps are being taken to file the application with National Company Law Tribunal.

Consolidated Accounts

M/s. Benani Foods Private Limited (BFPL) is an associate of PPHL which holds 34.06% of Cumulative Compulsorily Convertible Participating Preference Share (CCCPPS) in BFPL as on 31^st March 2017. In terms of the notification dated 27^th July 2016 issued by the Ministry of Corporate Affairs, the audited financial statements of PPHL and BFPL have been consolidated with the audited financial statements of the Company.

A Statement under Section 129(3) of the Companies Act, 2013 is enclosed as Annexure A. The audited consolidated financial statements together with Auditors report forms part of the Annual report.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the audited financial statements of PPHL and BFPL will be made available to the shareholders, on receipt of a request from any shareholder of the Company and it has also been placed on the website of the Company at www.tvs-e.in. This will also be available for inspection by the shareholders at the Registered Office of the Company, during business hours.

Annual Return

Extract of Annual Return in Form MGT-9 is given as Annexure B to this report.

Number of Board Meetings

The Board of Directors met four times during 2016-17. 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 31^st March 2017 is ''18,61,28,180/- consisting of 1,86,12,818 Equity Shares of ''10/- each. During the year, Company allotted 60,000 Equity shares of ''10/each under Employees Stock Option Scheme, 2011.

Particulars of Loans, Guarantees or Investments

The repayment period of interoperate loan of Rs1.50 Cr given in the last financial year to Prime Property Holdings Limited (PPHL), its Wholly Owned Subsidiary, was extended up to 31^st March, 2018, based on the request received from PPHL, since their investments are expected to be redeemed during the financial year 2017-18, to enable them to repay the interoperate loan. PPHL has paid on 31^st March, 2017, interest of Rs18.23 Lakhs fully accrued up to 31^st March, 2017.

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

Related Party Transactions

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 Companyâs website at www.tvs-e.in

Directors and Key Managerial Personnel 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. The brief resume of Mr. D Sundaram and other relevant information have been furnished in the Notice of Annual General Meeting (AGM). Appropriate resolutions for his appointment are being placed for approval of the shareholders at the AGM.

Independent Directors

All independent Directors hold office for a fixed period of five years and are not liable to retire by rotation. Mr. R Ramaraj, an Independent Director representing small shareholder, who was appointed for a period of three years from 1^st April 2014 to 31^st March 2017, by way of postal ballot on 29^th September 2014, completed his term of appointment as Independent Director on 31^st March, 2017. Board places on record its deep appreciation for his valuable advice and guidance and for his contribution to the Board and as a member of various board committees of the Company.

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 Regulation 16 (1) (b) of the SEBI (LODR) Regulations,

2015. The terms of appointment of Independent Directors are available in the Companyâs website www.tvs-e.in.

Separate Meeting of Independent Directors

During the year, a separate meeting of Independent Directors was held on 2^nd November 2016. The Independent Directors actively participated and provided guidance to the Company in all its spheres.

Woman Director

In terms of Section 149 of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014 and Regulation 17 of the SEBI (LODR) Regulations, 2015 the Company has appointed Mrs. Srilalitha Gopal (DIN: 02329790) who is serving on the Board of the Company, since the year 2011.

Key Managerial Personnel (KMPs)

Mr. Prakash Katama was appointed as the Chief Executive Officer of the Company with effect from 4^th May 2016. Mr. Karthi Chandramouli was appointed as the Chief Financial Officer with effect from 1^st September 2016. Mr. Karthi is a Chartered Accountant with about fourteen years of experience in Finance, Business Strategy and Risk Management.

In terms of Section 2(51) and Section 203 of the Companies Act, 2013, Mr. Prakash Katama, Chief Executive Officer, Mr. Karthi Chandramouli, Chief Financial Officer and Ms. S Nagalakshmi, Company Secretary are the key managerial personnel of the Company.

Mr. K E Ranganathan (DIN 00058990), Managing Director resigned from the services of the Company effective 1^st July 2016. Necessary intimations have been made to the stock exchanges in which the shares of the Company are listed.

Evaluation of the Boardâs performance

The Board has carried out an evaluation of its own performance, and that of its directors individually and the sub committees of the Board. 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.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee of the Company review the composition of the Board, to ensure that there is an appropriate mix of abilities, experience and diversity to serve the interests of the shareholders of the Company.

Statutory Auditors

As per the provisions of Section 139 of the Companies Act 2013, the transitional period of office of M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai as the Statutory Auditors of the Company will conclude from the close of the forthcoming Annual General Meeting of the Company.

The Board of Directors place on record their appreciation and gratitude for the services rendered by M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, during their tenure as the statutory auditors of the Company for over three decades.

The Audit Committee and the Board of Directors of the Company have recommended the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, Chennai (FRN:008072S) as the statutory auditors of the Company, subject to the approval of the shareholders. M/s. Deloitte Haskins & Sells have consented to the said appointment and confirmed that their appointment, if made, would be within the limits mentioned under the provisions of Section 141 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.

They will hold office as statutory auditors for the first term of five years from the conclusion of the 22^nd Annual General Meeting till the conclusion of 27^th Annual General Meeting of the Company, subject to ratification of the appointment by members at every Annual General Meeting held during their tenure of office as statutory auditors.

Explanation to remarks in the Independent Auditors Report

With reference to the basis of qualified opinion, in the Independent Auditors report, Board wishes to state that the Central Government vide its order dated 21^st March 2016, approved a remuneration of Rs90.80 Lakhs p.a for the year 2016-17 including the value of stock options to Mr. K E Ranganathan, who was the Managing Director of the Company up to 30^th June 2016. While the actual remuneration was within the limits approved by the Central Government for the year 2016-17, considering the value of stock options as debited to the Statement of Profit and Loss, the total remuneration for the staid period of three months was marginally in excess by Rs1.50 Lakhs. The overall managerial remuneration including the perquisite value of stock options was less than 11% of the net profits of the Company. The Company is taking necessary steps to obtain requisite approvals for the said excess remuneration as required in terms of provisions of Section 197(1) of Companies Act, 2013.

Internal Auditors

The Company has appointed M/s. Grant Thornton India LLP, as Internal Auditors for the year 2017-18.

Cost Auditors

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 2017-18. The Company has also received the consent from Mr. P Raju Iyer for his appointment. A sum of Rs1.50 Lakhs plus service tax, has been fixed by the Board of Directors in addition to the reimbursement of out of pocket expenses and is required to be ratified by the members at the ensuing Annual General Meeting as per Section 148(3) of Companies Act, 2013.

Secretarial Auditors

The Company appointed M/s. S Krishnamurthy & Co., Practicing Company Secretaries, Chennai to carry out Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report for the financial year 31^st March, 2017 is enclosed as Annexure C.

The Board has re-appointed M/s. S Krishnamurthy & Co., Practicing Company Secretaries, Chennai as the Secretarial Auditors for carrying out the secretarial audit for the financial year 2017-18.

Clarification to the observations in the Secretarial Audit Report

The Company is seeking requisite approvals from shareholders at the annual general meeting for managerial remuneration. There have been delays in two instances in disclosing the outcome of the Board meetings to stock exchanges due to network connectivity issues. Disclosures to the stock exchanges, together with the proceedings of the Annual General Meetings have been made in terms of regulation 13, Part A, Schedule III of Listing Regulations.

Employee Stock Option Plan

During the year, 60,000 stock options were granted under the Employees Stock Options Scheme, 2011 to the then Managing Director of the Company. These options were exercised and 60,000 Equity Shares were allotted on 18^th May 2016. 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 2016-17 Brickwork Ratings India Private Limited have reaffirmed the Companyâs Credit Rating at âBBB â. The Company has informed the Stock Exchanges accordingly.

Transfer to Investor Education and Protection Fund

There was no amount required to be transferred to Investor Education and Protection Fund during the year.

Particulars of Employees and related disclosures

The particulars of the employees covered by the provisions of Section 197 (12) of Companies Act, 2013 and the rules there under forms part of this report. However, as per the provisions of Section 136(1) of Companies Act, 2013, the annual report is being sent to all the members excluding this statement. This will be made available for inspection at the Registered Office of the Company during working hours.

Comparative analysis of remuneration paid

A comparative analysis of remuneration paid to Directors and employees with the Companyâs performance is given as Annexure E 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 1^st May, 2012. The Company has registered and authorized collection, storage and disposal centreâs in the required locations and has complied with the statutory requirements relating to E-Waste Management.

Report on energy conservation, technology absorption, foreign exchange and research and development

134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are given in Annexure F to the Boardâs Report.

Corporate Governance

Pursuant to Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, a Management Discussion and Analysis Report and a Corporate Governance Report are made part of this Annual Report.

A Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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 31^st March,

2017.

Other laws

During the year under review, the Company has received a complaint from a woman employee and the same was disposed off, after following due procedures and guidelines provided under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There have been no complaints pending for disposal.

Awards and Recognitions

During the year, the Company has been awarded:

a. Most admired brand in Indian ICT Industries - 2017

b. Dell appreciation for best Service delivery performance - 2017

c. From Xiaomi India:

i. Best Service Partner (West) - 2016-17

ii. Best Service Centre - 2016-17 - Vashi

iii. 3^rd Best Service Centre West - 2016-17 - Lower Parel.

iv. Individual Award - Best Centre Manager -2016-17

Directorsâ Responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, further confirm:

i) that in the preparation of the annual accounts for the financial year ended 31^st March, 2017, 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 31^st March, 2017 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 31^st March, 2017 on a âgoing concernâ 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 such 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 TVS Investments Limited (Formerly 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

12^th May, 2017 Chairman

Mar 31, 2016

The Board of Directors present their Twenty First Annual Report on the business and operations of the Company and the financial statements for the year ended 31^st March, 2016. The Management Discussion and Analysis (MDAR) is an integral part of this report.

Financial Results

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

(Rs. in Lakhs)

Particulars	Year ended 31.03.2016	Year ended 31.03.2015
Sales and other income	59,503	27,103
Earnings Before Interest & Tax (EBIT)	904	985
Profit / (Loss) Before Tax (PBT) and before exceptional items	331	293
Exceptional Items / Extra-ordinary Items	213	24
Profit / (Loss) Before Tax	544	317
Profit / (Loss) After Tax (PAT)	431	229
Add: Brought forward from previous year	198	(31)
Total available for appropriations	629	198
Surplus / (Deficit) in Profit and Loss Account	629	198

Business results and key highlights of operations

For the year ended 31^st March, 2016, the Company reported Sales Revenue and Other Income of Rs. 595.03 Cr as against Rs. 271.03 Cr in the previous year. Sales include Rs.135.54 Cr from Servicetec business (Previous year Rs.94.10 Cr) and Rs.299.46 Cr from Distribution service business.

The Servicetec business recorded a robust growth of over 40% in revenue and established itself as a strong player in the âExclusive Branded Service Centre'' delivery model. With strategic tie-up with leading international brands, the Company operates over 60 such exclusive centres across India. The Company also focused on the âRepair Factory'' model where high level repair services are carried out for these brands. The Company is becoming a preferred choice for major brands in the Mobile Phones and Computers and other IT products for their warranty and repair services.

The market for Dot Matrix Printers (DMP) continued to decline given the preference for end users for new technology laser printers. However, the Company has mitigated this impact by improving POS (Point-of-Sale) business. The market for POS products is growing at a CAGR of 12% riding on the demand from retail sector. The Company focuses on customer-centric products like Thermal Printers, Scanners, Label Printers and has recorded good volume growth. Meeting customer needs through innovative products and solutions helped the Company retain market share in many of these categories. Company''s market share in dot matrix printers is strong and the business is profitable and generates valuable cash flow.

During the year, the Company forayed into âDistribution Services'' by tying up with one of the reputed international mobile phone manufacturers to distribute their products in India through e-commerce route. Though the revenue from this line of business is high, the margins are low due to the inherent nature of the business of distribution. The Company is building up valuable experience by distribution through leading e-commerce portals.

The e-auction business provides a robust transparent platform for various manufacturers in disposing off their scrap and surplus materials and realize good value. The Company launched a new product - âe-procurement'' during the year to offer integrated services to customers.

Growing the business

Our Company believes that âServicetec Business'' remains the major focus in the future for profitable growth; which will come from expanding our service footprints to more cities, (Tier 2/3), where the demand for mobile phone service is increasing. The Company plans to tie up with more leading brands in computers, mobile phones and other consumer electronics products by offering warranty services through multiple delivery models. With the demand for Out-of-Warranty services increasing, we envisage to set up consumer service centreâs under âMulti-Brand Outlet'' (MBO) model. This will help consumers get reliable and high quality services for their devices.

In the âProducts Business'' the Company expects the POS category to grow at 12-15% in the future, driven by expanding retail sector. Other sectors like hotels, hospitals, manufacturing also need these products for various customer applications. With the impending movement to GST, it will become mandatory for all retail establishments to generate invoices, which will help grow the category. The Company plans to launch appropriate products for various segments and also work closely with the system integrators in making our products available to the customers. The field team will also be trained to focus more on this growing category, supported by a strong inside-sales team.

MANAGEMENT DISCUSSION AND ANALYSIS

As required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, a detailed Report on Management Discussions and Analysis is given below:

Economy

The country topped the World Bank''s growth outlook and grew at 7.6% in 2015-16 and is expected to grow at 7-8% in 2016-17 driven by many favourable macro factors and decisive Government programs and interventions. Inflation is forecast at around 4-5% in 2016-17 helping stability in prices.

The impact of Make in India and other policy initiatives have led to increased FDI inflows. The main aim of Make in India campaign is to take the share of Manufacturing in GDP from the current 16% to over 25% by the year 2022, to create 100 million jobs by then.

Macro trends, Industry Structure and Development Retail Industry

The Indian retail industry is expected to double to $1 trillion by 2020 due to rising income, urbanization, consumer preferences etc. The retail sector witnessed high growth with organized retailing formats gaining prominence, especially in Tier 1 and Tier 2 cities.

The kirana stores will continue to be the largest contributor to value share and are likely to account for 60% share.

Small & Medium Industry

The government is leading the efforts through Make in India and Digital India initiatives to bolster the share of SME in India''s GDP to 20-25 per cent by the end of 2025. Currently, there are approximately 48 million SMEs in India, employing around 40 per cent of the country''s labour and contributing to 17 per cent of India''s GDP. The government has launched many programs to grow this sector.

Smartphone Industry

India surpassed US to become second biggest smartphone market in the world by crossing 100 million units with an annual growth rate of 15% and user base of 220 million. India manufactured mobile phone worth Rs. 54,000 crore and 20 mobile phone brands have started assembling in India. India''s mobile phone manufacturing is expected to significantly grow in excess of 50% and the premium smartphone segment growing to 5 million in 2016.

Post sales service market

The mobile and laptop repair market in India is Rs. 6000 Crore in size and is expected to grow at 20% by 2018. With the entry of global players and existence of a few organized national players in the warranty market and many unorganized players in the out of warranty segment, this market is expected to grow exponentially. Your Company envisages increasing opportunities in this space with high device growth, improved connectivity and social networking.

Payment Industry

The Payment industry in India is in transition with the entry of small finance banks, payment banks, mobile wallets, prepaid cash cards with an ultimate aim of driving financial inclusion. Debit card transactions climbed 37% CAGR over past 5 years while credit cards grew at 21% CAGR. With initiatives like Jan Dhan Yojana, Unified Payments Interface, Mobile ATM etc, big jump was seen in new accounts opening and usage of cards. Business opportunity arises from such increasing trend for cashless transaction.

E-Commerce Industry

The e-Commerce market in India is expected to quadruple to $60-70 billion over the next 5 years. Lower costs of connectivity, smartphone proliferation, improving network and logistics infrastructure, easy payment mechanism and superior value propositions are expanding the industry at a rapid pace. Your Company is well positioned to leverage these opportunities.

Outlook

a) Increasing mobile phone penetration and up trading of these devices, driven by aggressive marketing by national and international brands and service providers have expanded the need for high quality after sales services either on an exclusive basis for a brand or on multi-brand offering basis across India. Our Company has developed an excellent network of walk-in stores for reputed international brands and also of Authorized Service Partners. The quality and excellence of the service offerings through these networks have made the Company a preferred choice of the Brands which the Company expects to leverage fully for profitable growth.

b) The need for warranty and post warranty services continues to be critical for customers due to increasing sale of devices, catering to enterprises, retail trade and household sector. The entrenched experience of Our Company and the excellence of services culture developed over the years under the reputed brand âTVS'' should enable the Company to leverage the warranty services for the devices through multiple delivery modes like on-site, walk-in centres and repair factories.

c) Over the last few decades, the consumer appliances sector witnessed good growth and organized retail formats have gained prominence. Growing e-Commerce opportunities and increased use of debit and credit cards have ushered in an online consumer culture in India. As Indian retail sector continues to grow impressively, our Company plans to serve customers by offering products that are robust for Indian environment while providing fast and reliable service. It will leverage the touch points of sales and service partners to focus on the POS business.

d) Modern retail formats are expected to grow three fold during the next 5 years. Three key trends to drive growth in modern trade are rapid consumer evolution and up trading; supply-side improvements and positive regulatory environment. These have the potential to significantly grow Point of Sale products.

e) Unorganized retail, with flexible credit options and convenient shopping locations, will continue to dominate the retail sector. Smaller cities are likely to witness growth and retail players should gear up to tap the potential in these cities. The Company visualizes opportunity for its POS products and solutions offering value for money, in these smaller centres.

f) Micro industries are expected to make a sizeable contribution to the small and medium sized businesses. It is anticipated that IT services will be their largest overall spending category. Overall business sentiment for conventional IT hardware business remains muted. Tablets & Phablets are taking the share of PC sales. Our Company visualizes increasing opportunities for the POS products and solutions in banking and e-Governance space. IT spends are also expected to increase across various sectors like Retail, Hospitality, Manufacturing, Education, Banking Financial Services & Insurance.

Business Risks & Opportunities

The Company''s key imperative over the medium term is to sustain current revenue streams even as we build a strategic framework and drive Servicetec business leveraging the macro trends and business opportunities as described elsewhere.

Key success factors (and therefore risks) are predicated on timely execution of the plans, building the internal capabilities by attracting and retaining talent and keeping pace with technological and market changes. The Board and management of our Company are confident of proactively managing the risks.

Internal Control Systems and their adequacy

Risk Management process

Our Company has an established sound risk management process which is overseen by the Audit Committee through a structured framework. Strategic, operational and financial risks are identified and mitigation measures are put in place by the Company and reviewed periodically.

The Company follows the policy of hedging forex risk on its imports by taking full cover.

At present, in the opinion of the Board of Directors, there are no risks which may threaten the existence of the Company.

Business Planning and Information Technology

The Company has moved applications and data base to âCloud'' based server as planned at the beginning of the year. This has resulted in de-risking the storage of critical information in our own hardware. Going forward, the Company will work on upgrading the software for applications to the current level and help run the business operations in an efficient manner.

The Company introduced âdata analytics'' during the year by capturing relevant information across various businesses. The information dash boards helped the management and operating teams to have real time information to control various processes and take pro-active steps to manage operations.

Human Resource Development

The Company has developed structured HR policies and programs in the areas of resourcing, performance management system, competency based training and development and talent management to support the current and future needs of the organization.

Leadership development is a key focus area and the Company continues to develop internal talent through structured talent assessment programs, job rotation and cross functional team assignments.

Learning & Development is another focus area wherein technical training is given to employees through Internal trainers. Employees are also encouraged to participate in external programs to acquire new skills and update their knowledge based on latest trends in the industry.

The Company continues to engage the employees through different forums. The annual Management Kick-off (MKO) meeting is organized for annual goals deployment and followed by a midyear goal alignment meeting, for review. As part of the âAwards, Recognition & Communicationâ (ARC) program, the Company recognizes the employees for their exceptional performance throughout the year.

Safety

Safety training and safety audit are frequently conducted which enables the Company to maintain accident free performance at the Factories for several years.

Corporate Social Responsibility

The provisions of Section 135 of the Companies Act, 2013 is not applicable to the Company and hence there was no requirement to constitute a CSR Committee, although the board periodically engages in CSR agenda of the Company. During the year, the Company undertook the following initiatives and also encouraged our employees to participate in various CSR activities.

Chennai floods:

Chennai witnessed unprecedented rains during the month of December 2015 resulting in partial damage/ full washout of house hold items of some of our employees. As an organization, employees volunteered and contributed their one day basic salary to extend possible support and an equal amount was contributed by the Company. The Company provided food and relief materials to hundreds of affected people in the relief camps.

âProject SAHAAIâ

Under the guidance of the management, around 40 employees volunteered to support the initiative of rehabilitating the flood hit âMicro Entrepreneursâ around the ecosystem and around 120 âMicro Entrepreneursâ were put back on to each of their respective businesses in a week''s time. These include petty shops, small ironing outfits, cycle repair shops and road side vendors.

During the year, the Company extensively conducted eye camps, health and hygiene, education support and provided infrastructure support to the schools.

Cautionary Statement:

Statements in the Management Discussion and Analysis Report describing the Company''s objectives, projections, estimates and expectations may be âforward looking statementsâ within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations, include, among others, economic conditions affecting demand/supply and price conditions in the domestic and overseas markets, changes in Government regulations, tax laws and other statutes and incidental factors.

Code of Business Conduct and Ethics

The Board of Directors at their meeting held on 5^th November 2014 approved the Code of Business Conduct and Ethics (Code) in terms of Schedule IV of Companies Act, 2013 and as per listing regulations. All the members of the Board and senior management personnel have confirmed compliance with the Code for the year ended 31^st March, 2016. 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 by the Audit Committee. The Chairman of the Audit Committee has been appointed as the Ombudsman of the Vigil mechanism. The policy provides a formal mechanism for all directors, employees to report to the management, their genuine concerns or grievances about unethical behaviour, actual or suspected fraud and any violation of the Company''s Code of Business Conduct and Ethics policy. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning Company. The Policy is available on the Company''s Website www.tvs-e.in.

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 15^th May, 2015. The Company has adopted Fair Practices Code (FPC) as per the regulations. The Board and the designated employees of the Company have confirmed compliance with the FPC as applicable as on 31^st March 2016. 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

Sundaram Investment Limited, our Promoter Company has changed its name to TVS Investments Limited, which was approved by the Registrar of Companies with effect from 2^nd May 2016. The Promoter Company holds 60.15% as on 31^st March 2016 (previous year 61.92%).

Subsidiary Company

Prime Property Holdings Limited (PPH), is the Company''s Wholly Owned Subsidiary, which holds 100% of 50,000 Equity Shares of the Company at Rs.10/- each.

The Board of Directors of the Company have approved a Scheme of Amalgamation of PPH with the Company, under Sections 391-394 of Companies Act, 1956 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. [SEBI( LODR) Regulations] The Appointed Date for amalgamation is fixed on 1^st April, 2016. The Scheme will be subject to the approval of the Honourable High Court of Madras. The Company is in the process of filing necessary applications with the concerned statutory authorities.

Consolidated Accounts

The accounts of the subsidiary Company, Prime Property Holdings Limited are consolidated with the accounts of the Company in accordance with the provisions of Section 129 of the Companies Act, 2013 and Regulation 33 of SEBI (LODR) Regulations, 2015 and 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 in Form AOC-1 is enclosed as Annexure A.

The Annual Accounts of PPH and related detailed information will be available for inspection by the shareholders at the Registered Office of the Company and the PPH 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 31^st March, 2016.

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 four times during 2015-16. 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 31^st March 2016 is Rs.18,55,28,180/- consisting of 1,85,52,818 Equity Shares of Rs.10/- each. During the year, Company allotted 5,30,000 Equity shares of Rs.10/-each to a Non Executive Non Independent Director of the Company, pursuant to his exercise of stock options, in terms of the Employees Stock Option Scheme, 2011.

Particulars of Loans, Guarantees or Investments

During the year, the Company gave an unsecured loan of Rs.1.50 Cr to Prime Property Holdings Limited, its Wholly Owned Subsidiary, to enable them to meet the advance tax obligations and to pursue a new investment opportunity. The said inter corporate deposit carries an interest rate of 12.15% and is repayable before 31^st March 2017.

The Company has not given any guarantees or provided any security in connection with any loan to any other body corporate or person covered under the provisions of Section 186 of Companies Act 2013.

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

Related Party Transactions

All the related party transactions entered in to are on âarm''s length'' basis and in the ordinary course of business and are in compliance of the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations. None of the transactions are in the nature of having any potential conflict with the interest of the Company at large. There were no material related party transactions during the year.

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

Retirement by Rotation

Ms. Srilalitha Gopal (DIN: 02329790), 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 herself for re-appointment. The Board recommends her re-appointment.

Appointment of Non Executive Non Independent Director

Mr. R S Raghavan (DIN 00260912) was appointed as an Additional Director (Non Executive Non Independent) under Section 161 of Companies Act, 2013 with effect from 4^th May 2016, to hold office up to 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. A brief resume of Mr. R S Raghavan has been furnished in the Notice convening the Annual General Meeting.

Independent Directors

All independent Directors hold office for a fixed period of five years and are not liable to retire by rotation. An Independent Director representing small shareholder hold office for a period of 3 years. 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 Regulation 16 (1) (b) of the SEBI (LODR) Regulations. The terms of appointment of Independent Directors are available in the Company''s web site www.tvs-e.in.

Separate Meeting of Independent Directors

A separate meeting of Independent Directors for the year 2015-16 was held on 6^th May 2015. The Independent Directors actively participated and provided guidance to the Company in all it spheres.

Woman Director

In terms of Section 149 of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014 and Regulation 17 of the SEBI (LODR) Regulations, the Company has appointed Ms. Srilalitha Gopal (DIN: 02329790) who is serving on the Board of the Company, since the year 2011.

Chief Executive Officer

Mr. Prakash Katama, Chief Operating Officer, was appointed as the Chief Executive Officer of the Company with effect from 4th May 2016. He is an accomplished professional in Global Supply Chain Practices, with strong leadership and general management skills. His leadership will help the Company achieve its ambitious growth targets and catalyze its transformation into a customer services and solutions business. He is an Industrial Engineer with a degree from University of Texas, Austin, and played a significant role in setting up Nokia''s Indian operations. He is designated as a Key Managerial Person under Section 203 of Companies Act, 2013.

As part of Mr. Katama''s joining terms, Company agreed to invest through its subsidiary Company, Prime Property Holdings Limited (PPH) in Benani Foods Private Limited (BFPL), a Ready to Cook venture promoted by Mr. Katama and his associates The Company and PPH helped BFPL strengthen its leadership team and finance its growth through this investment. PPH has nominated a director to the Board of BFPL. This was done to ensure that Mr. Katama devotes his full time and efforts to Company and consequently he has since resigned from Board of BFPL.

On a standalone basis, this investment in BFPL is expected to do well, given its products profile which has appeal among the growing urban middle-class

Key Managerial Personnel

Mr. K E Ranganathan (DIN 00058990), Managing Director, Mr. Prakash Katama, Chief Executive Officer 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.

Evaluation of the Board''s performance

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.

Statutory Auditors

The Company at the Annual General Meeting held on 4^th September, 2014, appointed M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai (Registration No.004207S) as the statutory auditors of the Company, to hold office for the transitional period of three consecutive years, from the conclusion of the said Annual General Meeting, subject to ratification at every Annual General Meeting, at such remuneration in addition to service tax, out of pocket expenses, travelling and other expenses as may be approved by the Board of Directors of the Company.

It is proposed to re-appoint them as statutory auditors for the final year in the transitional period of three consecutive years, from the conclusion of this Annual General Meeting, subject to ratification by the members. The Company has obtained necessary certificate under Section 141 of the Companies Act, 2013 conveying their eligibility for re-appointment as statutory auditors of the Company for the year 2016-17. In terms of the SEBI (LODR) Regulations, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Explanation to remarks in the Independent Auditors Report

1. With reference to the basis of qualified opinion, in the Independent Auditors report, Board wishes to state that the unsecured loan of Rs.1.50 Cr given to Prime Property Holdings Limited, (PPH) was to meet its advance tax obligations and to pursue a new investment opportunity. The Company has been advised by its legal counsel that utilization for the said purpose can be considered as utilization for the purpose of principal business activity of the subsidiary.

2. With reference to the remark made by the Auditors in para 10 of Annexure - 1, the Board wishes to state that the theft of mobile sets and the defalcation of cash were detected through internal fraud detection mechanism available in the Company. Since then, the Company has further strengthened the internal procedures as to verification of cash balances and monitoring control over quantities of mobile sets to avoid recurrence of such events.

Internal Auditors

The Company has appointed M/s. Grant Thornton India LLP, as Internal Auditors for the year 2016-17.

Cost Auditors

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 2016-17. The Company has also received the consent from Mr. P Raju Iyer for his appointment. A sum of Rs.1.50 Lakhs plus service tax, has been fixed by the Board of Directors in addition to the reimbursement of out of pocket expenses and is required to be ratified by the members at the ensuing Annual General Meeting as per Section 148(3) of Companies Act, 2013.

Secretarial Auditors

The Company appointed M/s. S Krishnamurthy & Co., Practicing Company Secretaries, Chennai to carry out Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year 31^st March, 2016 is enclosed as Annexure C.

The Board has appointed M/s. S Krishnamurthy & Co., Practicing Company Secretaries, Chennai as the Secretarial Auditors for the financial year 2016-17. Necessary consent has been received from them to act as Secretarial Auditors.

Clarification to the observations in the Secretarial Audit Report

The Secretarial Auditors Report for the year 2015-16 contains an observation that the Company is yet to appoint Chief Financial Officer. The Company has a Business Finance Controller, who is currently discharging the functions of Chief Financial Officer. The Company has shortlisted a few candidates and the recruitment is in the final stages of completion.

Employee Stock Option Plan

During the year, 3,00,000 stock options were granted under the Employees Stock Options Scheme 2011, to an employee of the Company. 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, subject to the criteria to be determined by the Nomination and Remuneration Committee of the Company. 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 2015-16 Brickwork Ratings India Private Limited has upgraded the Company''s Credit Rating from âBBB'' to âBBB ''. 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 there under forms part of this report. However, as per the provisions of Section 136(1) of Companies Act, 2013, the annual report is being sent to all the members excluding this statement. This will be made available for inspection at the registered office of the Company during working hours.

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.

S. No.	Name	Designation	Ratio to Median Remuneration	% increase in Remuneration
1	Gopal Srinivasan	Chairman	NA	NA
	K E Ranganathan	Managing Director	1:34	Nil
	D Sundaram	NENID	NA	NA
	Srilalitha Gopal	NENID	NA	NA
	Kenneth Tai	NEID	NA	NA
	R Ramaraj	NEID	NA	NA
	Praveen Chakravarty	NEID	NA	NA
	Dr. Nagendra Palle	NEID	NA	NA
	M. Lakshminarayan (from 06 05 2015)	NEID	NA	NA
	M F Farooqui (from 06 05 2015)	NEID	NA	NA
	Narayan K Seshadri (from 06 05 2015)	NENID	NA	NA
	S Nagalakshmi	Company Secretary	NA	30%
2	Percentage Increase in the median remuneration of employees in the financial year		10.36%
3	The number of permanent employees in the rolls of the Company		421
4	Explanation in relationship between average increase in remuneration and Company performance	Company performance PBT increase	72%
		Average increase in remuneration	11%
5	Comparison of the remuneration of the KMP and Company performance	Percentage increase in KMP remuneration	30%
6.	Variations in the market capitalization of the Company, Price Earnings Ratio of the Company as at the closing date as at 31st March 2016 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:
	Particulars	2014-15	2015-16	Increase / Decrease
	No. of Shares	1,80,22,818	1,85,52,818	5,30,000
	Share Price (in Rs.)
	BSE	32.90	102.25	210.79%
	NSE	34.45	102.20	196.66%
	EPS (in Rs.)	1.17	2.26	93.16%
	PE Ratio (based on audited results)	29.44	45.22	53.60%
	Companyâs Market Cap (Rs. in Lakhs)	6,208.86	18,960.98	205.39%
	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.
7.	Average percentile increase in the salaries of employees other than the managerial personnel during the year 2015-16 was 11% and for the managerial personnel was 16%.
8.	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.
9.	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
10.	It is hereby affirmed that the remuneration paid is as per the Remuneration Policy of the Company.

E-Waste Management

Report on energy conservation, technology absorption, foreign exchange and research and development

Corporate Governance

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 31^st March, 2016.

Other laws

During the year under review, the Company has not received any complaint of sexual harassment from any of the women employees of the Company in terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Awards and Recognitions

During the year, the Company has been awarded:

i) Kalinga Digital Media Private Limited Award for Top 100 Most Trusted Company 2015

ii) First Data Appreciation Award 2015

iii) DELL Appreciation Award for Outstanding Performance and Lasting Contribution in Onsite Services 2015

iv) Lenovo India Services Award 2015

Directorsâ Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultants, advisors of the Company and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2015-16.

In terms of Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, further confirm:

i) that in the preparation of the annual accounts for the financial year ended 31^st March, 2016, 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 31^st March, 2016 and of the profits of the Company for the year under review;

iv) that they had prepared the annual accounts for the year ended 31^st March, 2016 on a âgoing concernâ 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 such 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 TVS Investments Limited (Formerly 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

4^th May, 2016 Chairman

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 Â Indian Brand 2012

iii) CELLIT Awards 2012 Â 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, 2011

TO THE MEMBERS,

The Directors hereby present their sixteenth annual report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2011.

Financial Results

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

Rs. in Lakhs

Particulars Year ended Year ended 31st March, 31st March, 2011 2010

Sales and other income 18,301 19,447

Earnings Before Interest & Tax (EBIT) 668 292

Profit/ (Loss) Before Tax (PBT) before extraordinary items 151 (429)

Exceptional items (87) (75)

Profit / (Loss) Before Tax 64 (504)

Tax Expense (90) (18)

Profit / (Loss) after Tax (PAT) 154 (486)

Add : Profit Brought forward from previous year 435 778

Add (Less): Tax relating to earlier years - 143

Total available for appropriations 589 435

Surplus Profit Carried forward 589 435

Business results and key highlights of operations

For the year ended 31st March, 2011, the Company reported Sales Revenues and Other Income of Rs.183 Cr as against Rs.194 Cr in the previous year.

The overall Dot Matrix Printer (DMP) market was flat but recovered in the second half of the year both in terms of volume and value. Within the DMP category, the small format printer has picked up additional volume due to growth in Retail applications. The lower revenue was primarily due to postponement of purchases in the Banking, Insurance and Government segments. In an effort to build better value mix and avoid negative options, the Company consciously stayed away from certain contracts. However, there was significant growth in the Point of Sale and Transaction products. The Company also rationalized some low value products like membrane keyboards thereby improving the overall product margins.

Due to sustained focus on cost and cash management exercise, the Earnings before Interest and Tax (EBIT) for the year improved significantly to Rs.6.68 Cr as against Rs.2.92 Cr in previous year and PAT improved to Rs.1.54 Cr against (-) Rs.4.86 Cr in the previous year. 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 (65%) as compared to previous year in this category. The Company continues to focus on customer needs by continuous and extensive engagement with them. Cadence of new products launch is an integral part of our growth strategy. Towards this the Company has over the last two years strengthened its technology partnership with key global majors to get best in class and cutting edge products for Indian customers.

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 is positioning itself as a 'one stop shop' for its customers offering end to end Products & Solutions and Support in the domain of Point of Sale and Transaction.

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.

The Company sustained its aggressive focus on "Cash" and reducing working capital by effective receivables and inventory management actions. This Company - wide initiative helped to improve the operating cash flow very significantly in the year under review.

On Point of Sale and Transaction Management products and solutions, the Company has evolved more direct customer engagement to grow its business. The Company has also extended its presence covering larger and growing territories across India.

Awards and Recognitions

During the year, the Company has been awarded:

I) NCN Award for Best POS Solution 2010

ii) VAR India Award for Best Key Board (Mechanical) 2010

iii) VAR India Award for Best POS Ã Indian Brand 2010

Subsidiary Companies

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

The subsidiaries continue to explore opportunities for development of their business.

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 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 its subsidiaries concerned and will also be made available to the Shareholders upon request.

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, 2011.

Directors

Mr. Kenneth Tai was appointed as an Additional Director on 29th July, 2010. The Shareholders have approved his appointment as a Director at the Fifteenth Annual General Meeting held on 6th September, 2010.

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 Shareholders have approved his appointment as Managing Director at the Fifteenth Annual General Meeting held on 6th September, 2010.

Mr. Balu Doraisamy has been appointed as Additional Director on 27th May, 2011. In accordance with the provisions of Section 260 of the Companies Act, 1956, he 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 his candidature for the office of Director.

Mr. S R Vijayakar and Dr. Sridhar Mitta, 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

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, 2,10,000 options have lapsed. 1,000 stock options are still in force as on 31st March, 2011. These options were issued at the rate of Rs.70 per share and entitle 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, 2011.

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

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, 2011.

E-Waste Management

The Company continues its initiatives in E-Waste management for safe recycling of waste generated in manufacturing and 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 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 deposit from the public within the meaning of Section 58A of the Companies Act, 1956 for the year ended 31st March, 2011.

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, 2011) 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 31st March, 2011 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 fo the assistance and co-operation received from the Customers, Dealer Partners, Business Partners, Bankers and its Holding Companies 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

Gopal Srinivasan Chairman Chennai 27th May, 2011

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

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