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Directors Report of TVS Srichakra Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 32nd annual report and the audited accounts for the year ended 31st March, 2015

FINANCIAL HIGHLIGHTS (Rs. in crores)

Year ended Year ended Details 31.3.2015 31.3.2014

Sales & Other Income 1899.71 1672.38

Profit before finance cost and 209.34 121.15 depreciation

Less : Finance Cost 29.89 41.56

Depreciation 39.88 23.67

Profit after finance cost and 139.57 55.92 depreciation

Less : Provision for

Income tax 35.00 9.39

Deferred tax 0.78 (0.91)

Profit after tax 103.79 47.45

Surplus brought forward from 164.04 135.72 Previous Year

Appropriations :

Dividend payable 25.88 12.25

Dividend Tax payable 5.27 2.08

Transfer to General Reserve - 4.80

Balance carried to Balance Sheet 236.68 164.04

OPERATIONS

TVS Srichakra Ltd witnessed a revenue growth of 13% during FY 2015, despite challenging economic environment and auto sector slow-down.

On a standalone basis, your Company achieved total net sales and Other Income of Rs.1899.71 crore as against Rs.1672.38 crore during the previous financial year. EBITDA was at Rs.209.34 crore as compared to Rs. 121.15 crore during the previous financial year. The net profit for the year under review was Rs.103.79 crore as against Rs.47.45 crore in the previous fiscal, a growth of almost 118%.

During the year, the Company recovered material price increase by price hike of its products, therefore was able to maintain its margin. Further, weak rupee helped in higher export realization.

HIGHLIGHTS OF CONSOLIDATED ACCOUNTS

Consolidated income for the year ended 31st March, 2015 increased by 12% to Rs.2180.51 crore as compared to Rs.1939.30 crore for the previous year ended 31st March, 2014.

Consolidated net sales for the year ended 31st March, 2015 were Rs.2176.43 crore as against Rs.1937.51 crore for the year ended 31st March, 2014, representing a growth of 12%.

Consolidated profit before tax was Rs.137 crores for the year ended 31st March, 2015 as against Rs.77 crores for the year ended 31st March, 2014.

Consolidated profit after tax was Rs.99.63 crores for the year ended 31st March, 2015 as against Rs.56.58 crores for the year ended 31st March, 2014.

DIVIDEND

The Directors are pleased to recommend a dividend of Rs.33.80 per equity share of Rs.10/- each (338%) for the financial year ended 31st March, 2015 for the approval of the shareholders, at the ensuing Annual General Meeting (AGM). The total outgo for the current year amounts to Rs.31.15 crores including dividend distribution tax of Rs. 5.27 crores as against Rs.14.33 crores including dividend distribution tax of Rs. 2.08 crores in the previous year.

SHARE CAPITAL

The paid up equity capital as on 31st March, 2015 was Rs.7,65,70,500/-. During the year under review, the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity.

FINANCE

Cash and cash equivalent as at March 31,2015 was at Rs.9.42 crores. The Company continues to focus on judicious management of its working capital, Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

FIXED DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014 for the year ended 31st March, 2015.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.

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

CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

As per the provisions of the Companies Act, 2013 (the Act) and The Companies (Corporate Social Responsibility) Rules, 2014 read with various clarifications issued by Ministry of Corporate Affairs, the Company has undertaken CSR activities in the areas of education, agriculture, health and sanitation. These projects are largely in accordance with Schedule VII of the Act and the details are contained in the "Annual Report on CSR Activities" given in Annexure 1.

INTERNAL CONTROL SYSTEMS

The Company has engaged the services of the Internal Auditor and continued to implement their suggestions and recommendations made by the internal auditor to improve the control environment and corrective actions thereon are presented to the Audit Committee of the Board.

BUSINESS RISK MANAGEMENT

Key Business Risks are identified by the Company and reviewed by the Senior Management on a regular basis. In addition, the Board of Directors review the key risks identified and the mitigation plan initiated by the Company on a quarterly basis. The list of key risks is also revisited and modified as per the changing scenario.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism named Whistle Blower Policy to deal with instances of fraud and mismanagement.

The details of the Whistle Blower Policy are explained in the Corporate Governance Report and are also posted on the Company''s website (www.tvstyres.com).

SUBSIDIARY COMPANIES

The following companies continue as subsidiaries of the Company and their audited accounts have been consolidated with those of the Company as on 31st March, 2015.

a) TVS Srichakra Investments Limited

b) TVS Europe Distribution Limited and its subsidiaries

CONSOLIDATED FINANCIAL STATEMENTS

As stipulated by clause 32 of the Listing Agreement with the Stock Exchanges, the Consolidated Financial Statements of the Company have been prepared in accordance with relevant Accounting Standards issued by the Institute of Chartered Accountants of India form part of this Annual Report.

The statement containing the salient features of the financial statement of Company''s subsidiary(s) as referred to sub-section 3 of Section 129 of the Companies Act, 2013 in Form AOC I is given in Annexure 2.

DIRECTORS

Directors liable to retire by rotation

Mr V Ramakrishnan, Director, will be retiring at this Annual General Meeting and, being eligible, offers himself for re-appointment.

The brief resume of the aforesaid Director and other information have been detailed in the notice convening the Annual General Meeting of the Company. An appropriate resolution for his re-appointment is being placed for approval of the shareholders at the ensuing Annual General Meeting. Your Directors recommend his re-appointment as Director of the Company.

Appointment of Managing Director

Ms. Shobhana Ramachandhran was re-appointed as Managing Director of the Company, effective 25.8.2015, by the Board of Directors at their meeting held on 23.5.2015, on such terms and conditions, for a period of five years, as recommended by the Nomination and Remuneration Committee, subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

Appointment of new Independent Director

Mr A Arumugam was appointed as Additional Independent Director subject to approval of the shareholders.

Mr A Arumugam does not suffer any of the dis-qualifications mentioned in sub-section 6 of Section 149 of the Companies Act, 2013 and is not disqualified under Section 164 (2) of the Companies Act, 2013.

The brief resume of Mr A Arumugam and other information have been detailed in the notice convening the Annual General Meeting of the Company. Appropriate resolution for his appointment is being placed for approval of the shareholders at the ensuing Annual General Meeting.

Necessary notice has already been received from a shareholder proposing his candidature to be appointed as a Director not liable to retire by rotation at the ensuing Annual General Meeting.

Your Directors recommend his appointment as an Independent Director of the Company till 2.12.2019.

Independent Directors Declaration

All Independent Directors have submitted the declaration of independence, as required pursuant to Section 149(7) of the Companies Act, 2013, stating that they satisfy the criteria of independence as laid down in Section 149(6) of the Act and clause 49 of the Listing Agreement.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy and other details are stated in the Corporate Governance Report.

Disclosures pertaining to remuneration

As per section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the details pertaining to remuneration in respect of Directors / Key Managerial Personnel / Company Secretary / Employees are given in Annexure 3.

Board Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year ten Board Meetings and five Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. For other details please refer Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

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

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

c) 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;

d) the directors had prepared the annual accounts on a going concern basis; and

e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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

DELISTING OF COMPANY''S SHARES FROM MADRAS STOCK EXCHANGE

Madras Stock Exchange Limited (MSE), vide its letter dated 22nd December, 2014 communicated to the Company their decision to withdraw the admission granted to the dealings on the Exchange for the Equity Shares of the Company for voluntary delisting and to remove the name of the Company from the Listed Securities of the MSE, with effect from 22nd December, 2014.

INDUSTRIAL RELATIONS

During the year, the Company maintained healthy, cordial and peaceful industrial relations with the workers and employees at all levels.

There are no cases reported under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, during the year.

RELATED PARTY TRANSACTIONS

During the year, the Company did not enter into any material transaction with related parties, under Section 188 of the Companies Act, 2013. All transactions entered into by the Company with the related parties were in the ordinary course of business and on an arm''s length basis. Form AOC-2, as required under Section 134 (3)(h) of the Act, read with Rule 8 (2) of the Companies (Accounts) Rules 2014, is given in Annexure 4.

The Related Party Transaction Policy as approved by the Board is uploaded in the Company''s website at the web link http://www.tvstyres.com/policy/RELATED%20PARTY%20TRANSACTION% 20POLICY.pd f

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Company occurred between the ends of the financial year to which these financial statements relate on the date of this report.

AUDITORS

Statutory Auditor

Pursuant to the provisions of Companies Act, 2013, M/s Sundaram & Srinivasan, Chartered Accountants, Madurai, are being appointed as Statutory Auditors of the Company, from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting.

The Company has received a letter from them stating that the appointment, if made, shall be within the prescribed limit under Section 139(1) and 141 of the Companies Act, 2013. The Audit Committee and the Board recommend the appointment of M/s Sundaram & Srinivasan, Chartered Accountants, Madurai, as the Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting.

Cost Auditor

The Board of Directors have appointed Dr. I Ashok, Cost Accountant, Madurai as Cost Auditor for carrying out the cost audit of the Company for the financial year 2015-16 subject to the approval of the Central Government.

The Company has received a letter from the said Cost Accountant, stating that the appointment, if made, will be within the prescribed limit under the Companies Act, 2013.

For the financial year under review, the Cost Audit Report will be filed with the Ministry of Corporate Affairs portal within the stipulated time in terms of Companies (Cost Accounting) Records Rules, 2011.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. N Balachandran, a Practicing Company Secretary, to undertake the Secretarial Audit of the Company.

The Report of the Secretarial Auditor is annexed as Annexure 5.

The Company had at the AGM held on 25th September, 2013 had transacted a business pertaining to commission payable for a period of five years to non-executive directors. The resolution was passed unanimously by the shareholders at the Annual General Meeting, but the resolution was mentioned as an Ordinary Resolution instead of Special Resolution. The Company proposes to ratify the same at the ensuing Annual General Meeting by passing a Special Resolution.

CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company''s Auditors confirming compliance forms an integral part of this Report.

The Managing Director and the Vice President - Finance (CFO) of the Company have certified to the Board on financial statements and other matters in accordance with Clause 49(IX) of the Listing Agreement pertaining to CEO / CFO certification for the financial year ended 31st March, 2015.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section I34(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rule, 2014 is annexed herewith as Annexure 6.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure 7.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 of The Companies Act 2013 and read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of The Companies Act 2013 the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre- clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

All Board of Directors and the designated employees have confirmed compliance with the Code.

ACKNOWLEDGEMENT

The Directors thank the bankers, customers, dealers and vendors for their support and encouragement.

The Directors wish to place on record their appreciation for the contribution made by the employees which made it possible for the Company to achieve these results.

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

For and on behalf of the Board

R NARESH SHOBHANA RAMACHANDHRAN EXECUTIVE VICE CHAIRMAN MANAGING DIRECTOR

Madurai 23.5.2015


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 31st annual report and the audited accounts for the year ended 31st March, 2014

FINANCIAL HIGHLIGHTS (Rs. in crores) Details Year ended Year ended 31.3.2014 31.3.2013

Sales & Other Income 1672.38 1519.89

Profit before finance cost and depreciation 123.82 128.65

Less : Finance Cost 44.23 57.18

Depreciation 23.67 24.22

Profit after finance cost and depreciation 55.92 47.26 Less : Provision for

Income tax 9.39 1.79

Deferred tax (0.91) 9.80

Profit after tax 47.45 35.67

Surplus brought forward from Previous Year 135.72 110.37

Appropriations :

Dividend payable 12.25 5.74

Dividend Tax payable 2.08 0.98

Transfer to General Reserve 4.80 3.60

Balance carried to Balance Sheet 196.45 135.72

OPERATIONS

Your Company witnessed a revenue growth of 13.6% from operations during FY14, despite challenging economic environment and auto sector slow-down.

On a standalone basis, your company achieved total net sales and Other income of Rs.1672 crore as against Rs.1520 crore during the previous financial year. EBITDA was at Rs.124 crore as compared to 129 crore during the previous financial year. The net profit for the year under review was Rs.47 crore as against Rs.36 crore in the previous fiscal, a growth of almost 31%.

During the year, the company recovered material price increase by price hike of its products, therefore was able to maintain its margin. Further, weak rupee helped in higher export realization.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs.16 per equity share of Rs.10/- each (i.e. 160%) for the financial year ended 31st March, 2014 absorbing a sum of Rs.1433.34 lakhs, including tax on dividend, for the approval of the shareholders, at the ensuing Annual General Meeting.

SUBSIDIARY COMPANIES

The following companies continue as subsidiaries of the Company and their audited accounts have been consolidated with those of the Company as on 31st March, 2014.

a) TVS Srichakra Investments Limited

b) TVS Europe Distribution Limited

CONSOLIDATED ACCOUNTS

As required under the Listing Agreement with the Stock Exchanges, the consolidated financial statements of the Company are attached.

The Ministry of Corporate Affairs (MCA) vide its circular No.2 in file No.51/12/2007-CL-III dated 8th February, 2011 has granted general exemption from attaching annual reports of subsidiaries along with the annual report of the holding companies without seeking any approval of the Central Government, subject to the conditions laid down therein.

The Board of Directors at their meeting held on May 24, 2014 passed necessary resolution for complying with all the conditions enabling the circulation of annual report of the Company without attaching all the documents referred to in Section 212(1) of the Act, of the subsidiary companies to the shareholders of the Company.

The annual accounts, reports and other documents of the subsidiary companies will be made available to the members, on receipt of a request for the same. The annual accounts of the subsidiary companies will be available at the registered office of the Company and at the registered offices of the respective subsidiary companies concerned. If any member or investor wishes to inspect the same, it will be available during the business hours of any working day of the Company.

A statement giving the following information in aggregate of each subsidiary consisting of (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investment (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend has been attached with the consolidated balance sheet of the Company in compliance with the conditions of the said circular issued by Ministry of Corporate Affairs.

A statement referred to in clause (e) of sub-section 1 of Section 212 of the Companies Act, 1956 disclosing the Company''s interest in subsidiaries and other information as required is attached.

DIRECTORS LIABLE TO RETIRE BY ROTATION

M/s S Narayanan and P Vijayaraghavan, Directors, will be retiring at this Annual General Meeting and, being eligible, offer themselves for re-appointment.

The brief resume of the aforesaid Directors and other information have been detailed in the Notice convening the Annual General Meeting of the Company. Appropriate resolutions for their re-appointment are being placed for approval of the shareholders at the ensuing Annual General Meeting. Your Directors recommend their re-appointment as Directors of the Company.

APPOINTMENT OF DIRECTOR

Mr V Ramakrishnan was appointed as an Additional Director pursuant to Section 152 of the Companies Act, 2013, liable to retire by rotation, of the Company.

The brief resume of Mr V Ramakrishnan and other information have been detailed in the Notice convening the Annual General Meeting of the Company. Appropriate resolutions for his appointment is being placed for approval of the shareholders at the ensuing Annual General Meeting.

Necessary notice has already been received from a shareholder proposing his candidature to be appointed as a Director liable to retire by rotation at the ensuing Annual General Meeting.

Your Directors recommend his appointment as Director of the Company, liable to retire by rotation.

INDEPENDENT DIRECTORS

Resignation

Dr N H Atthreya, one of the Independent Directors resigned due to his health conditions with effect from 8.6.2014. Dr N H Atthreya has been on the Board right from inception of the Company giving valuable contributions and guidance to the Board of Directors.

The Board of Directors would like to place on record, its appreciation of the contribution made by Dr N H Atthreya over these years.

The vacancy created by the resignation of Dr N H Atthreya will be filled within the prescribed time limit as per the Companies Act, 2013 as well as Clause 49 of the Listing Agreement.

Appointment of Independent Directors

During the year, the Ministry of Corporate Affairs (MCA) has notified majority of the provisions inter alia provisions relating to selection, manner of appointment, roles, functions, duties, re-appointment of Independent Directors (IDs) and the relevant rules under the Companies Act, 2013 (the Act 2013) and made them effective 1st April, 2014.

In terms of the provisions of Section 149(10) read with Section 149(5) of the Act 2013, Independent Directors are eligible to hold office for a term upto five consecutive years on the Board and eligible for re-appointment for the second term on passing special resolutions by the Company. During the period, they will not be liable to "retire by rotation" as per the provisions of Sections 150(2), 152(2) read with Schedule IV to the Act 2013.

It is therefore, proposed to appoint them as Independent Directors for a period upto 31st March, 2019 at the ensuing Annual General Meeting. Necessary declarations have been obtained from them, as envisaged under the Act 2013.

Both the Nomination and Remuneration Committee and the Board also ensured that their appointments as Independent Directors are in compliance with the requirements under the relevant statutes and that there were appropriate balance of skills, experience and knowledge in the Board, so as to enable the Board to discharge its functions and duties effectively.

Notices in writing signifying the intention to offer their candidatures as Independent Directors of the Company along with the requisite deposit have been received from members of the Company in terms of Section 160 of the Act 2013.

The brief resume of these directors proposed to be appointed and other relevant information have been furnished in the Notice convening the Annual General Meeting. Appropriate resolutions for their appointment are being placed for approval of the members at the Annual General Meeting.

Your Directors recommend their appointment as Independent Directors of the Company.

APPOINTMENT OF NEW INDEPENDENT DIRECTOR

Mr Rasesh R Doshi was appointed as an Independent Director for a term of five years with effect from 24.5.2014.

Mr Rasesh R Doshi does not suffer any of the dis-qualifications mentioned in sub-section 6 of Section 149 of the Companies Act, 2013 and is not disqualified under Section 274(1)(g) of the Companies Act, 1956 and Section 164 (2) of the Companies Act, 2013.

The brief resume of Mr Rasesh R Doshi and other information have been detailed in the Notice convening the Annual General Meeting of the Company. Appropriate resolution for his appointment is being placed for approval of the shareholders at the ensuing Annual General Meeting.

Necessary notice has already been received from a shareholder proposing his candidature to be appointed as a Director not liable to retire by rotation at the ensuing Annual General Meeting.

Your Directors recommend his appointment as an Independent Director of the Company, for a period of 5 years from 24.5.2014 to 23.5.2019.

APPOINTMENT OF MR R NARESH

In order to comply with the provisions of Section 152 and other applicable provisions of the Companies Act, 2013, the Board of Directors proposes to appoint Mr. R Naresh as Managing Director of the Company, designated as Executive Vice Chairman, liable to retire by rotation, for a period of three (3) years with effect from June 16, 2014 at the remuneration / emoluments as recommended by the Nomination and Remuneration Committee.

The brief resume of Mr R Naresh, and other information have been detailed in the Notice convening the Annual General Meeting of the Company. Appropriate resolutions for his appointment is being placed for approval of the shareholders at the ensuing Annual General Meeting.

Necessary notice has already been received from a shareholder proposing his candidature to be appointed as Managing Director of the Company, designated as Executive Vice Chairman, liable to retire by rotation at the ensuing Annual General Meeting.

Your Directors recommend his appointment as Managing Director of the Company, designated as Executive Vice Chairman, liable to retire by rotation at the ensuing Annual General Meeting.

None of the aforementioned Directors is disqualified under Section 274(1)(g) of the Companies Act, 1956 and Section 164 (2) of the Companies Act, 2013.

AUDITORS

Pursuant to the provisions of Companies Act, 2013, M/s Sundaram & Srinivasan, Chartered Accountants, Madurai, are being appointed as Statutory Auditors of the Company, from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting.

The Company has received a letter from them stating that the appointment, if made, shall be within the prescribed limit under Section 139(1) and 141 of the Companies Act, 2013. The Audit Committee and the Board recommends the appointment of M/s Sundaram & Srinivasan, Chartered Accountants, Madurai, as the Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting.

COST AUDITOR

The Board of Directors have appointed Dr I Ashok, Cost Accountant, Madurai as Cost Auditor for carrying out the cost audit of the Company for the financial year 2014-15 subject to the approval of the Central Government.

The Company has received a letter from the said Cost Accountant, stating that the appointment, if made, will be within the prescribed limit under the Companies Act, 2013.

For the financial year under review, the Cost Audit Report will be filed with the Ministry of Corporate Affairs portal within the stipulated time in terms of Companies (Cost Accounting) Records Rules, 2011.

CORPORATE GOVERNANCE

The Company has been practicing the principles of good corporate governance over the years and lays strong emphasis on transparency, accountability and integrity.

A separate section on corporate governance and a certificate from the statutory auditors of the Company regarding compliance of conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges form part of the annual report.

The Managing Director and the Vice President – Finance (CFO) of the Company have certified to the Board on financial statements and other matters in accordance with Clause 49(V) of the Listing Agreement pertaining to CEO / CFO certification for the financial year ended 31st March 2014.

SECRETARIAL AUDIT

In compliance with the directives issued by the Securities and Exchange Board of India (SEBI), Secretarial Audit is being conducted by a Practicing Company Secretary at specified periodicity and the reports are being submitted to the Stock Exchanges.

STATUTORY STATEMENTS

Conservation of energy, technology absorption and foreign exchange earnings and outgo As per the requirements of Section 217(1)(e) of the Act, read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules 1988, the information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure to this report.

Particulars of employees

No employee of the Company was in receipt of remuneration during the financial year 2013–14, in excess of the sum prescribed under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

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, 2014.

Directors Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Act with respect to Directors'' Responsibility Statement, it is hereby stated

a) That in the preparation of accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

b) That the Directors had selected the accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit of the Company for the year under review;

c) 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; and

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

ACKNOWLEDGEMENT

The Directors thank the bankers, customers, dealers and vendors for their support and encouragement.

The Directors wish to place on record their appreciation of the contribution made by the employees which made it possible for the Company to achieve these results.

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

For and on behalf of the Board

Madurai R NARESH SHOBHANA RAMACHANDHRAN 3.7.2014 EXECUTIVE VICE CHAIRMAN MANAGING DIRECTOR


Mar 31, 2012

The Directors are pleased to present their Twenty Ninth Report and audited statement of accounts for the year ended 31st March, 2012.

FINANCIAL HIGHLIGHTS (Rs. in crore)

31.3.2012 31.3.2011

Net Sales & Other Income 1409.30 1097.26

Profit before Depreciation & Tax 75.55 72.99

Less : Depreciation 20.79 15.82

Provision for Tax - Current 12.00 15.50

- Deferred 3.00 2.50

Net Profit 39.75 39.17 Add : Surplus brought forward from Previous Year 86.63 62.62

Profit available for appropriation 126.38 101.79 Appropriations

- Dividend to Equity Shareholders 10.34 9.57

- Dividend Tax 1.67 1.59

- Transfer to General Reserve 4.00 4.00

Balance Carried Forward 110.37 86.63

DIVIDEND

The Directors are pleased to recommend a dividend of Rs.13.50 per equity share of Rs.10/- each (i.e. 135%) for the financial year ended 31st March, 2012 absorbing a sum of Rs.1201.39 lakhs, including tax on dividend, for the approval of the shareholders, at the ensuing Annual General Meeting.

DOMESTIC MARKET

Your Company has recorded a double digit growth for the consecutive third year.

Original Equipment (OE) segment continued to maintain the leadership in the OE business. The significant increase in the business is due to product with newer technology, which has once again helped your Organization to retain pioneer status in new technology introduction.

Sluggishness in the After Market (AM) segment continued during the current year also due to supply exceeding the demand in the market place. Excess supply was due to expansion activities carried out by all the type companies expecting a sizable growth in the OE segment, similar to the last two years, which did not happen. Your Company has taken focused improvement activities through external consultants and working aggressively to regain the market share.

To supplement the above, your Company continued with the aggressive brand building activities and also launched new TV Commercials. The initial response indicates a positive sign and your Company's Brand Building exercise and promotional activities would reap benefits for the After Market team to substantially increase its market share in the coming years.

DIRECTORS' REPORT (Contd.)

OVERSEAS MARKET

The export business has witnessed a sizable growth during the current year.

Key initiatives taken by your Company during the current year include appointment of new distributors; focused customer service activities existing markets and participation in the Tyre Expo.

MANUFACTURING

Your Company has increased its production through productivity improvement and expansion activities in both Madurai and Uttrakhand Plants.

INDUSTRIAL RELATIONS

The industrial relations with staff and workers during the year under review continue to be cordial.

HUMAN RESOURCES

During the year, your Company took lot of Employee Engagement initiatives like QC awards, Fun at Work, etc.

A number of training programs have been organized by your Company during the year, which include a 3 day out- bound training program on Team Building, Organizational Intervention Program for improving Thinking and Communication skills, a Development Program on Negotiation Strategies and Decision Making, Employee Bonding initiatives, etc.

DIRECTORS' REPORT (Contd.)

SUBSIDIARY

During the year, your Company has formed a subsidiary in United Kingdom, namely, TVS Europe Distribution Limited for expanding its business in Europe. The said subsidiary has acquired another Company called Universal Components UK Limited.

In terms of Accounting Standard 21 prescribed by the Institute of Chartered Accountants of India / Companies (Accounting Standards) Rules, 2006, the accounts of the subsidiaries are consolidated with the accounts of the Company and the consolidated accounts forms part of this report.

As per general circular No. 2/2011 and notification No.51/12/2007-CL-III dated 8.2.2011, the accounts of the subsidiary Companies have not been attached to the accounts of your Company.

The copy of the Annual Reports of the Subsidiary Companies will be made available to shareholders on request and will also be kept for inspection by any shareholder at the Registered Office of your Company, and its subsidiary Company.

DIRECTORS

Mr Sitaram Rao Valluri and Mr P Vijayaraghavan retire at the ensuing Annual General Meeting of the Company and being eligible, offers themselves for re-appointment.

The brief resume of the aforesaid Directors and other information have been detailed in the Notice convening the Annual General Meeting of the Company. Appropriate resolutions for their reappointment are being placed for approval of the shareholders at the ensuing Annual General Meeting. Your Directors recommend their reappointment as Directors of the Company.

None of the Directors is disqualified under Section 274(1)(g) of the Companies Act, 1956.

CORPORATE GOVERNANCE

A report on Corporate Governance, along with a certificate from the Auditors of the Company, regarding the compliance of conditions of Corporate Governance, as also the Management Discussion and Analysis Report, as stipulated under Clause 49 of the Listing Agreement, are annexed to this Report.

The Managing Director has confirmed and declared that all the members of the Board and the senior management have affirmed compliance with the code of conduct.

SECRETARIAL AUDIT

In compliance with the directives issued by the Securities and Exchange Board of India (SEBI), Secretarial Audit is being conducted by a Practicing Company Secretary at specified periodicity and the reports are being submitted to the Stock Exchanges.

COST AUDIT

Due to the demise of Mr. C Ramamoorthy, Cost Auditor, who was auditing the cost accounts of the Company, the Board of Directors have appointed Dr. I Ashok, Cost Accountant, Madurai, to carry out an audit of cost accounts of the Company for the year 2011-12 and the Cost Audit Report will be submitted to the Ministry of Corporate Affairs, Government of India.

AUDITORS

M/s Sundaram & Srinivasan, Chartered Accountants, Madurai, retire in accordance with the provisions of the Companies Act, 1956 and are eligible for re-appointment. The Company has received a letter from them stating that the appointment, if made, shall be within the prescribed limit under Section 224(1B) of the Companies Act, 1956. The Audit Committee and the Board recommends the re-appointment of M/s Sundaram & Srinivasan, Chartered Accountants, Madurai, as the Auditors of the Company.

DIRECTORS' REPORT (Contd.)

PUBLIC DEPOSITS

The Company has neither invited nor accepted any deposit from the public within the meaning of Section 58A of the Companies Act, 1956 for the year ended 31st March, 2012.

STATUTORY STATEMENTS

Conservation of energy, technology absorption and foreign exchange earning and outgo

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure to the Directors Report.

PARTICULARS OF EMPLOYEES

No employee of the Company was in receipt of remuneration during the financial year 2011-12, in excess of the sum prescribed under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.



DIRECTORS RESPONSIBILITY STATEMENT

Your Directors state that the annual accounts of the Company have been prepared in conformity, in all material respects, with the generally accepted accounting standards in India and supported by reasonable and prudent judgments and statements so as to give a true and fair view of the state of affairs of the Company and of the results of the operations of the Company. Significant accounting policies followed and other disclosures are detailed in the Notes to the Accounts and forming part of the annual accounts.

These financial statements of the Company have been audited by M/s Sundaram & Srinivasan, Chartered Accountants. A reference may be made to their report to the members together with Annexure - A thereto, containing information per requirement under the Companies (Auditor's Report) Order, 2003 attached with these annual accounts.

Proper and sufficient care has been taken 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.

The internal control system of the Company is monitored by an independent internal audit team, which encompasses the examination and evaluation of the adequacy and effectiveness of the system of internal control. Internal Auditors, Audit Committee Members and Statutory Auditors have full and free access to all the information and records considered necessary to carry out the assigned responsibilities. The issues raised from time to time are suitably acted upon and followed up at different levels of Management.

The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

The Directors thank the bankers, customers, dealers and vendors for their support and encouragement.

The Directors wish to place on record their appreciation of the contribution made by the employees which made it possible for the Company to achieve these results.

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

For and on behalf of the Board

Place : Chennai S NARAYANAN

Date : 26.5.2012 Chairman

 
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