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Directors Report of Sundaram Finance Ltd.

Mar 31, 2018

Board’s Report

The directors have pleasure in presenting the 65 th Annual Report together with audited accounts for the year ended 31st March 2018. The summarized financial results of the Company are presented hereunder:

FINANCIAL RESULTS:

(Rs, in cr.)

Particulars

Year ended March 31, 2018

Year ended March 31, 2017

Revenue from Operations

2618.29

2356.79

Other Income

78.05

101.49

Total Revenue

2696.34

2458.28

Less: Total Expenses

1889.55

1738.08

Profit before tax

806.79

720.20

Profit after Tax

532.95

495.35

Surplus brought forward

227.43

176.47

Amount available for appropriation

760.38

671.82

Appropriations to:

- Statutory Reserve

106.59

99.07

- General Reserve

243.39

222.90

Dividend* - Interim 2016-17

-

55.55

Final 2016-17

72.22

-

Dividend Tax

9.38

8.77

Surplus carried to balance sheet

328.80

285.53

* Interim Dividend for the financial year 2017-18 which was paid during May 2018 and Final Dividend recommended for the financial year 2017-18, if approved by the Shareholders, will be recognized as a liability during the financial year 2018-19.

DIVIDEND

Your Company paid an interim dividend of Rs,5/- per share in May 2018. Your directors are pleased to recommend a final dividend of Rs,7/- per share, which, together with the interim dividend, would aggregate to a total dividend of Rs,12/-per share (120% on the face value of Rs,10/-).

The Dividend Distribution Policy, formulated in accordance with the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is attached as part of this report, vide Annexure I.

AMALAGAMATION OF SUNDARAM INFOTECH SOLUTIONS LIMITED

Sundaram Infotech Solutions Limited (SISL) was amalgamated with your Company with effect from the ‘Appointed Date’, i.e., 1st April 2016, pursuant to the Order of the Hon’ble National Company Law Tribunal (NCLT), Division Bench, Chennai, dated 26th September 2017 under Sections 230 to 232 of the Companies Act, 2013. Consequent to the Amalgamation, the accounts for the financial year ended 31st March 2018 have been prepared after taking into account the transactions of SISL and, therefore, the figures given herein and elsewhere in the Annual Report are not strictly comparable with those of the previous year.

COMPOSITE SCHEME OF ARRANGEMENT AND AMALGAMATION

Pursuant to the sanctioning of the Composite Scheme of Arrangement and Amalgamation (Scheme) by the Hon’ble National Company Law Tribunal (NCLT), Division Bench,

Chennai, vide Order dated 12th January 2018, received by the Company on 18th January 2018, the following matters, as envisaged in the Scheme with effect from the ‘Appointed Date’, i.e., 1st April 2016, have become operative:

a. Amalgamation of Sundaram Insurance Broking Services Limited and Infreight Logistics Solutions Limited, wholly-owned subsidiaries, with your Company;

b. De-merger of the shared services business of Sundaram BPO India Limited (Sundaram BPO), subsidiary, into your Company; and

c. De-merger of the non-core business of the Company, viz. training services, identified shared services including shared services vested from Sundaram BPO, apart from the non-financial services investments, together with related assets, into Sundaram Finance Holdings Limited (SFHL).

As provided in the Scheme, on 12th February 2018, all the shareholders of your Company were allotted 1 (One) equity share of ''5/- each credited as fully paid-up in the capital of SFHL for every 1 (One) fully paid-up equity share of ''10/- held by them in your Company as on the record date, i.e., 2nd February 2018. Pursuant to the said allotment, the shareholding of your Company in SFHL got reduced from 100% to 26.47% and SFHL became an associate of your Company. The equity shares of SFHL were listed on the National Stock Exchange of India Limited with effect from 26th March 2018.

The accounts for the financial year ended 31st March 2018 have been prepared after giving effect to the Scheme and, therefore, the figures given herein and elsewhere in the Annual Report are not strictly comparable with those of the previous year.

CORPORATE GOVERNANCE

A detailed report on corporate governance, together with a certificate from the Secretarial Auditors, in compliance with the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, is attached as part of this report, vide Annexure II.

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

RELATED PARTY TRANSACTIONS

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

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company, along with its subsidiaries and associates, has always responded in a responsible manner to the growing needs of the communities in which it operates. During the year, your Company has, in consonance with the CSR policy of the Company, undertaken a number of initiatives that contribute to society at large, in the areas of health, education, environment and preservation of the country’s rich culture and heritage.

The Annual Report on CSR Activities undertaken by the Company for the Financial Year 2017-18, is annexed with this report, vide Annexure IV.

BUSINESS RESPONSIBILITY REPORT

A Business Responsibility Report as required under Regulation 34(2) (f) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, is enclosed as part of this report, vide Annexure V.

DISCLOSURE UNDER THE ‘PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE POLICY’

The Company has in place a Policy for prevention of Sexual Harassment, in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints were received during the year 2017-18.

SECRETARIAL AUDIT

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

REMUNERATION TO DIRECTORS / KEY MANAGEMENT PERSONNEL

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

SUNDARAM FINANCE EMPLOYEE STOCK OPTION SCHEME

Based on the recommendations of the Nomination, Compensation and Remuneration Committee, your Board of Directors has granted, subject to regulatory approvals where necessary, 20000 stock options to select eligible employees, on 2 5th May 2018. The disclosure required under SEBI (Share Based Employee Benefits) Regulations, 2014, is furnished, vide Annexure VIII.

EXTRACT OF ANNUAL RETURN

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

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, no significant and material orders were passed by the regulators, courts or tribunals against the Company, impacting its going concern status or its future operations.

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

Your Company has no activity relating to conservation of energy or technology absorption. During 2017-18, expenditure in foreign currencies amounted to Rs,78.56 cr. Foreign Currency earnings amounted to Rs,6.46 cr.

MANAGEMENT DISCUSSION AND ANALYSIS GLOBAL ECONOMY

The global economy continued its strong growth in 2017. One notable aspect of last year’s upswing was its geographic breadth. Growth accelerated in about three quarters of countries worldwide. Even more important, some of the countries that have had high unemployment for some time, including several in the euro area, participated in the growth and are experiencing strong employment growth. Some of the larger emerging market economies, such as Argentina, Brazil, and Russia, came out of their recessions. Equity valuations continued to climb and are near record highs, as central banks have maintained accommodative monetary policies due to weak inflation. However, the paradoxes of growth remain. According to the World Bank, “there were plenty of unsettling and upsetting events and trends. Catastrophic storms and flooding wrecked homes and livelihoods from South Asia to the Caribbean. Education quality in many countries fell short even as much of the world raced into the digital age. Yet extreme poverty continues to decline. Innovation and technology are enhancing the quality of life. And human capital is now the biggest driver of wealth in the world today. ”

As per the IMF’s World Economic Outlook, “Global economic growth strengthened in 2017 to 3 8 %, with GDP continuing to accelerate over much of the world in what is seen as the broadest cyclical upswing since the start of the decade with a notable rebound in global trade. It was driven by an investment recovery in advanced economies, continued strong growth in emerging Asia, a notable upswing in emerging Europe, and signs of recovery in several commodity exporters. Global growth is expected to tick up to 3 9 % this year and next, supported by strong momentum, favorable market sentiment, accommodative financial conditions, and the domestic and international repercussions of expansionary fiscal policy in the United States. The partial recovery in commodity prices should allow conditions in commodity exporters to gradually improve.” The report however goes on to add that “The global economic upswing that began around mid-2016 has become broader and stronger..., advanced economies as a group will continue to expand above their potential growth rates this year and next before decelerating, while growth in emerging market and developing economies will rise before leveling off. For most countries, current favorable growth rates will not last. Policymakers should seize this opportunity to bolster growth, make it more durable, and equip their governments better to counter the next downturn.”

INDIAN ECONOMY

India has emerged as one of the fastest growing major economies in the world as per the IMF and is expected to be amongst the top three economic powers of the world over the next two decades, backed by its strong democracy and partnerships. India’s GDP is estimated to have grown by 6.6 % in 2017-18 and is expected to grow at 7.3 % in 2018-19.

The Goods and Services Tax (GST) which involved merging all indirect taxes into one, with a view to mitigate cascading or double taxation, was rolled out on July 1, 2017. As anticipated, there have been myriad issues, ranging from initial teething troubles to several technical issues. The first and most avoidable hiccups were the glitches on the Goods and Services Tax Network online portal (GSTN), which is the IT backbone for the new indirect tax regime, which hit small businesses particularly hard. The technical glitches on the GSTN forced the Government to extend the due date for various returns and forms on a number of occasions, raising concerns on the functioning of the IT backbone of GST. So also, the GST rates have been tinkered with time and again, which has hampered smooth transition and disrupted various sectors. However, things appear to be falling in place, albeit gradually, and it is to be hoped that things will settle down sooner than later.

The growth in India’s GDP has to be viewed as satisfactory in the aftermath of two major events - demonetization and GST. Gross tax collections for the period April 2017- February 2018 showed an increase of 15.8% year-on-year while net retention to the Centre in tax collections recorded a growth of 17%.

India''s foreign exchange reserves stood at USD 424.4 billion at the end of March 2018 as compared to USD 370 billion at the end of the previous year, according to data from the RBI. However, tepid export growth of 0.7 % and higher import growth of 7.1%, primarily attributable to oil-imports, resulted in the current account deficit worsening to 2.0 % from 1.4 % in the previous year. Depending on the oil price movements, this could worsen further.

The annual average WPI inflation for 2017-18 stood at 2.9% as against 1.7% in the previous year, while the headline inflation based on Consumer Price Index for 2017-18 averaged 3.6%, as compared to 4.5 % in 2016-17. The IIP increased by 4.3% during the period Apr to Feb 2018, as against 4.7% in the corresponding period of the previous year. The production of eight core industries registered a growth of 5.3% during the year as against 0.6 % in the corresponding period of previous year.

According to the World Bank''s Doing Business Report, India has improved its ranking by 30 spots over its 2017 ranking and is now ranked 100 among 190 countries in the latest edition of the report.

AUTOMOTIVE SECTOR

The Commercial vehicle industry faced significant turbulence in 2017-18. The BS IV emission norms that went into effect from April 1, 2017, meant that prices of commercial vehicles increased sharply. In addition, the competing engine technologies EGR and SCR, with vehicle manufacturer’s proclaiming the superiority of one over the other, only added to the confusion for the average transport operator. Shortly thereafter, India entered the GST era which affected the movement of goods in the first few months and also increased the working capital requirements of transport operators. Against this backdrop it is hardly surprising that sales of Medium and Heavy commercial vehicles (M&HCV) registered a fall during the first half of the financial year compared to the previous year. Considering the fact that industrial activity remained muted, M&HCV demand in several states, especially in Southern and Western India were markedly lower than the previous year. However, a turnaround in the second half of the year, driven predominantly by the continuing focus of the government on infrastructure, robust demand in Northern India and the substantial discounts that were on offer, ensured that M&HCV sales registered a growth of 12.5%, for the year. The reduced turnaround times on account of inter-state check posts being dismantled, stricter implementation of overloading norms in several states and vastly improved highways, resulted in a significant shift towards higher tonnage vehicles, owing to better operating economics for transport operators.

The relatively good monsoons of the last two years have led to increased prosperity in the rural and semi urban areas of the country which has had a salutary effect on their purchasing power and a corresponding increase in demand for various goods and services.

Agrarian prosperity, coupled with the creation of large, new warehousing capacity across the country, the strengthening of the hub and spoke model, thanks to GST and the continuing boom in E commerce, provided a shot in the arm for Light and Small commercial vehicles which grew by over 13%. Sales of Passenger Cars and Utility vehicles grew 8% aided by the latter. However, with the emergence of taxi aggregators such as Uber and Ola and the rapid development of Metro rail in several major cities, some early signs of changes in buyer behavior appear to be emerging. As per the Society of Indian Automobile Manufacturers (SIAM), the contribution of the top 20 cities that generate about 50% of passenger vehicle sales has shown slower growth in the last four to five years, while there is greater demand from smaller towns and semi-urban areas. This could have major implications both for manufacturers and financiers, in the longer term.

The tractor industry witnessed another year of strong growth. Multiple factors ranging from subsidy support for tractor purchase by several States, a bountiful harvest on account of a good monsoon and the availability of retail finance saw the industry register a robust growth of 22% during the year.

OPERATING & FINANCIAL PERFORMANCE

Your Company’s disbursements at ''15632 cr. (PY ''13196 cr.) registered a healthy growth of 18% over the previous year, notwithstanding the various disruptions faced by the automotive sector in the first half of the financial year. While sales of M&HCVs revived only towards the later part of the year, your Company increased its presence in the rapidly growing construction equipment and tractor segments while also deepening its presence in newer geographical areas and market segments. Pricing pressures continued unabated, with several new players, mostly private sector banks, seeking to gain a foothold in the fiercely competitive vehicle finance segment. Your Company was largely able to counter this on account of the strong customer relationships that it has built and nurtured over the decades, its ability to raise resources at or near the best rates in the debt markets and the deft management of its liabilities portfolio, thereby enabling it to maintain its strong market position. The gross receivables managed by the Company stood at Rs,28648 cr., as against Rs,24036 cr., a growth of 19% over the previous year. As always, your Company’s sustained focus on maintaining superior asset quality ensured that its portfolio continued to be best in class, with Gross and Net NPAs which stood at 1.54% and 0.55% respectively in the previous year, coming down to 1.29% and 0.50%, respectively, as at 31st March, 2018. The net profit for the year after considering the effects of demerger was Rs,532.95 cr., as against Rs,460.57 cr. (adjusted net profit on demerger) in the previous year, registering a growth of 15.95% on a like to like basis. The company’s net-worth stood at Rs,3970.85 cr., as on 31.3.2018. Capital adequacy (CRAR) at 17.64% was comfortably higher than the statutory requirement of 15%.

RESOURCE MOBILISATION a) Deposits

During the year, your Company mobilized fresh deposits aggregating to Rs,450.53 cr. Renewal of deposits during the year amounted to Rs,943.44 cr, representing 79% of the matured deposits of Rs,1170.48 cr. Deposits outstanding at the year-end were at Rs,2499.33 cr. as against Rs,2411.08 cr in the previous year. The Net accretion for the financial year was Rs,88.25 cr.

As at 31st March 2018, 4615 deposits amounting to Rs,32.67 cr. had matured for payment and were due to be claimed or renewed. After close follow-up, the figures are currently down to 2899 and Rs,16.17 cr. respectively. Continuous efforts are being made to arrange for repayment or renewal of these deposits. There has been no default in repayment of deposits or payment of interest thereon during the year. Investor Relation Services - Deposits currently enjoy the ISO 9001:2008 Certification from Bureau Veritas (India) Private Limited. The certification process to the revised standard ISO 9001:2015 is in progress and will be concluded in the second quarter.

b) Term Funding

During the year, your Company raised term funding from Banks, Mutual funds, Insurance companies and others in the form of non-convertible debentures and term loans to the tune of Rs,5545 cr., across various tenors.

c) Bank Finance

As part of the overall funding plan, your Company’s working capital limits with Consortium banks were increased to Rs,2750 cr. from Rs,2250 cr. During the year, your Company also issued several tranches of commercial paper aggregating to Rs,14405 cr. The maximum amount outstanding at any time was Rs,4905 cr. and the amount outstanding at the end of the year was Rs,2025 cr.

d) Assets Securitised / Assigned

During the year, your Company raised resources to the extent of Rs,3879 cr. through securitization and assignment of receivables.

CREDIT RATINGS

During the year, your Company’s long term credit ratings have been upgraded from AA to AAA, by both ICRA & CRISIL. The short term borrowings (including commercial paper) are rated “A1 ”/P1 (very strong degree of safety). Fixed

Deposits are rated “AAA” (Highest Credit Quality) by ICRA and CRISIL. The long term borrowings are rated “AAA” (Highest Degree of Safety), with a “Stable outlook” by ICRA and CRISIL and AA (High Degree of Safety), with a “Stable outlook” by India Ratings.

OUTLOOK

The main thrust of the Union Budget for 2018-19 is on uplifting the rural economy and strengthening of the agriculture sector, healthcare for the economically less privileged, infrastructure creation and improvement in the quality of education. A total of Rs,14.34 lakh crores along with specific allocation for North-East Industrial Development Scheme is meant to improve livelihoods and infrastructure in rural areas; besides this, an increased budgetary allocation for infrastructure has been made at Rs,5.97 lakh crore for 2018-19. These increased allocations are expected to have an overall salutary impact on the Indian economy as a whole and the rural economy in particular.

SIAM expects the growth momentum of Commercial vehicle sales to continue at 10-12% (M&HCVs at 9-11% and LCVs at 10-12%) in 2018-19. The government’s continuing emphasis on infrastructure and a recovery in the mining sector bodes well for sales of tippers. Sales of passenger vehicles are expected to grow at 8-10% (utility vehicles at 14-15% and cars at 8-9%). As per a report by CRISIL, tractor sales are projected to increase by 11-13% in 2018-19, assuming a normal monsoon and increased government support. Demand in semi-urban towns and rural areas is expected to look up as the impact of demonetization has abated, and a normal monsoon for a third year should bolster sales of passenger cars, LCVs and especially tractors.

However, rising diesel prices and higher interest rates could prove a dampener from the point of view of the transport operator’s viability and consequently on commercial vehicle off take. With inflation numbers trending upwards and liquidity tightening, interest rates have already shown an upward bias in the first few weeks of the current financial year. Pressure on inflation, retail as well as wholesale, is mounting. While the widely-tracked consumer price index(CPI) based inflation rate rose to a three month high of 4.58%, its wholesale price index (WPI) counterpart increased to a four-month high of 3.18% in April. This might justify the hawkish stance of the monetary policy committee (MPC). The general expectation is that RBI will start raising policy rates in the third quarter of 2018-19. However, recent events, notably the sharp increases in oil and commodity prices, could prompt them to raise rates even earlier. Although not an immediate concern, the specter of BS VI emission norms and the vehicle scrap page policy, both slated for implementation in April 2020, looms on the horizon.

Your Company has taken these factors into account in drawing up its plans for the year. While concentrating on its core markets and product segments, your company sees significant opportunities in the rapidly growing construction equipment segment, as also the LCV and tractor segments. Rising interest rates and intensifying competition are likely to exert pressure on margins. Your company expects to manage this through financing an appropriate mix of higher and lower yielding assets, while ensuring that asset quality continues to remain best in class.

INTERNAL FINANCIAL CONTROLS

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

RISK MANAGEMENT

Your Company has built a robust risk management framework over the years. Engaged, as it is, in retail financing, the Company has to manage various risks, including credit risk, liquidity risk, interest rate risk and operational risk. The Risk Management Committee and the Asset Liability Management Committee review and monitor these risks on a regular basis. The Company manages credit risk through stringent credit norms established through several decades of experience in retail lending and continues to follow the time tested practice of personally assessing every borrower, before committing to a credit exposure. The Company monitors ALM on an ongoing basis to mitigate liquidity risk, while interest rate risks arising out of maturity mismatch of assets and liabilities are managed through regular monitoring of the maturity profiles. The Company also measures the interest rate risk by the duration gap method.

Operational risks arising from inadequate or failed internal processes, people and systems or from external events are adequately addressed by the internal control systems. These systems are continuously reviewed, monitored and modified, as necessary. A stable and experienced management team provides much needed continuity and expertise in managing the dynamic changes in the market environment. Process improvements and quality control are on-going activities and are built into the employees'' training modules, as well. The Company has well documented Standard Operating Procedures for all processes to ensure better control over transaction processing and regulatory compliance.

INTERNAL AUDIT

As part of the efforts to evaluate the effectiveness of the internal control systems, your Company’s internal audit department independently evaluates the adequacy of control measures on a periodic basis and recommends improvements, wherever appropriate. The Internal Audit team plays a vital role in continuously monitoring the effectiveness of the Standard Operating Procedures and makes extensive use of software and analytical tools which enables effective offsite monitoring.

The internal audit department is manned by highly qualified and experienced personnel and reports directly to the Audit Committee of the Board. The Audit Committee regularly reviews the audit findings as well as the adequacy and effectiveness of the internal control measures.

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

HUMAN RESOURCES

In an environment that is rapidly becoming technology and digital oriented, your Company continues to invest in long term people development, for organizational excellence. Part of the enduring Sundaram Finance tradition, over the decades, has been our adherence to the ‘Sundaram Way’- the value system that has formed the bedrock of the Company and the percolation of these values to successive generations of employees. For talent development, we have a healthy mix of learning programmes addressing both domain knowledge and soft skills. During the year, 48% of programmes were for domain knowledge and 52% in the area of soft skills, involving 4600 man hours of learning. Your Company launched the Sundaram Finance Centre of Excellence (CoE) in 2016-17, with a view to effectively leverage technology to accelerate the pace of institutional knowledge transfer across the Sundaram Finance landscape, while still retaining the spirit of our Gurukulam system. The response has been very enthusiastic and over 1600 employees took the exams under various modules of the CoE during the year. The ‘Educator Orientation Programmes’ for the senior managers who act as guides and facilitators to those who take the CoE examinations every month has been institutionalized.

INFORMATION TECHNOLOGY

During the year, the Board of Directors formed the IT Strategy Committee, as required by RBI. The Committee has since framed the policies and procedures relating to Cyber Security, Business Continuity, Outsourcing and Information Security / Technology, in line with its terms of reference.

Your Company has a State of the Art Data Centre catering not only to its own needs but also those of its subsidiaries and associates, with a capacity of over 300 servers, managed by professionals providing 24/7 support, with over 99.99% uptime. The Data Centre is accredited for ISO/IEC 27001:2013 by TUV Rheinland for Information Security Management System. The Disaster Recovery Site for all critical applications is hosted at a separate facility located in a different seismic zone, with near real-time data replication. Your company has implemented various protocols for managing Information and Cyber security across the organization.

The internal IT Team has mastered a complex landscape of current technologies, marketing approaches, and operational capabilities to cater to the various business applications within the Company. Digital services and operations are raising the competitive bar in every sector. Your Company’s digital strategy is driven by the twin objectives of making life easier for our employees and enhancing the customer experience. Our digital initiatives address these very objectives, by providing a host of digital options for our customers to interact and transact with us and a number of productivity enhancements through process automation which free up our people to deliver the unique ‘Sundaram Experience’ to our customers. We are a relationship centric business and have consciously adopted digital, to augment these relationships and be digitally available for our customers, as and when they need us to be.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of Section 129(3) of the Companies Act, 2013, the Consolidated Financial Statements, drawn up in accordance with the applicable Accounting Standards, form part of the Annual Report. A separate statement containing the salient features of the financial statements of Subsidiaries and Associates in Form AOC-1 forms part of the Annual Report.

The annual accounts of all the Subsidiary Companies have been posted on your Company’s website - www.sundaramfinance.in. Detailed information, including the annual accounts of the Subsidiary Companies will be available for inspection by the members, at the registered office of the Company and will also be made available to the members upon request.

SUBSIDIARIES

- Sundaram BNP Paribas Home Finance Limited

The company approved loans aggregating to ''2996 cr. (Previous year Rs,2077 cr.). Disbursements during the year were higher by 43%, at Rs,2626 cr. (PY Rs, 1831 cr.). The company earned a gross income of Rs,898 cr. (PY Rs, 923 cr.) and reported a profit after tax at Rs,136 cr. (PY Rs,154 cr.). The loan portfolio under management as at 31st March 2018 stood at Rs,8336 cr. as against Rs,7639 cr. in the previous year. The gross and net NPA stood at 3.27% and 1.09% respectively as of 31.03.2018. The company proposed a dividend of Rs,3.50 per share for the year (PY 35%).

- Royal Sundaram General Insurance Co. Ltd (Royal Sundaram)

Royal Sundaram reported a robust increase of 19.9% in Gross Written Premium (GWP) at Rs,2643 cr. as compared to Rs,2205 cr. in the previous year. Profit after tax for the year was Rs,83.00 cr., as against Rs,43.05 cr. in the previous year.

- Sundaram Asset Management Company Limited

Sundaram Asset Management Company Limited reported a gross income of Rs,308.04 cr. as against Rs,260.52 cr. in the previous year. Profit after tax was significantly higher at Rs,38.24 cr. as compared to Rs,30.73 cr. during the previous year. The Average Assets under Management amounted to Rs,34,306 cr. for the year 2017-18 as compared to Rs,28,260 cr. in the previous year. The company recommended a dividend of Rs,4/- per share for the year, on the paid-up capital of Rs,35 cr.

- Sundaram Trustee Company Limited

Sundaram Trustee Company Limited earned a gross income of Rs,1.50 cr., as against Rs,1.23 cr., in the previous year and reported a profit after tax of Rs,0.80 cr. for the year, as against Rs,0.58 cr. in the previous year. The company recommended a dividend of Rs,100/- per share for the year.

- LGF Services Limited

During the year, LGF Services Limited reported a gross income of Rs,1.90 cr. as against Rs,4.39 cr. in the previous year. The profit after tax for the year was Rs,0.34 cr. as against Rs,0.83 cr. in the previous year. The company proposed a dividend of Rs,25/- per share for the year, same as during the previous year.

- Sundaram BNP Paribas Fund Services Limited

Sundaram BNP Paribas Fund Services Limited earned an income of Rs,40.96 cr. during the year, an increase of 25.03% over the previous year. The company’s reported loss was lower at Rs,0.22 cr. during the year as against Rs,4.62 cr. in the previous year.

BOARD & AUDIT COMMITTEE

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

DIRECTORS

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

DECLARATION BY INDEPENDENT DIRECTORS

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

ANNUAL EVALUATION BY THE BOARD

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

DIRECTORS'' RESPONSIBILITY STATEMENT

Your directors confirm that:

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

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

3. Proper and sufficient care has been exercised for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

5. Adequate internal financial controls have been put in place and they are operating effectively; and

6. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS

M/s Sundaram & Srinivasan, Chartered Accountants, Chennai, were appointed as Statutory Auditors of your Company, to hold office for a term of five (5) consecutive years from the conclusion of the 64th Annual General Meeting until the conclusion of the 69th Annual General Meeting. Their appointment for periods subsequent to the conclusion of the 65th Annual General Meeting shall be subject to one time ratification by the members at the ensuing Annual General Meeting, at such remuneration as may be mutually agreed between the Board of Directors of the Company and the Statutory Auditors.

A certificate from the Auditors that they satisfy the conditions prescribed under the Companies Act, 2013 and the Rules made there under (including satisfaction of criteria under Section 141 of the Companies Act, 2013) has been received from them.

AWARDS AND RECOGNITION

Your Company was chosen for Mahindra Transport Excellence Award instituted by Mahindra & Mahindra Limited, in the category, ‘Enablers of Social Change’, in recognition of the outstanding contribution made by your Company, in fostering and developing the transport ecosystem, especially single truck owners and small fleet owners, over several decades.

ACKNOWLEDGEMENT

Your directors gratefully acknowledge the support and cooperation extended to your Company by all its customers, depositors, shareholders and bankers, as also the various mutual funds, insurance companies, automotive manufacturers and dealers.

Your directors also place on record their special appreciation of Team Sundaram for their dedication and commitment in delivering the highest quality of service to every one of our valued customers.

For and on behalf of the Board

Chennai 600 002 S VIJI

25.05.2018 Chairman


Mar 31, 2018

Board’s Report

The directors have pleasure in presenting the 24th Annual Report together with audited accounts for the year ended 31st March 2018. The summarised financial results of the Company are presented hereunder:

FINANCIAL RESULTS:

(Rs, in cr.)

Particulars

Year ended March 31, 2018

Revenue from Portfolio Companies

57.00

Operating Revenue

13.50

Other Income

3.88

Total Revenue

74.38

Less: Total Expenses

14.53

Profit before Tax

59.85

Profit after Tax

54.43

Consolidated PAT

124.44

Finance Limited (SFL), viz., identified shared services undertaken by SFL including shared services vested from Sundaram BPO India Limited, training services rendered by SFL, non-financial services investments of SFL, together with related assets, into your Company, as envisaged in the Scheme with effect from the ‘Appointed Date’, i.e., 1st April 2016, has become operative.

As provided in the Scheme, on 12th February 2018, all the shareholders of SFL were allotted 1 (One) equity share of '' 5/- each credited as fully paid-up in the capital of SFHL for every 1 (One) fully paid-up equity share of ''10/- held by them in SFL as on the record date, i.e., 2nd February 2018. The equity shares of the Company were listed on the National Stock Exchange of India Limited with effect from 26th March 2018.

The accounts for the financial year ended 31st March 2018 have been prepared after giving effect to the Scheme and, therefore, the figures given herein and elsewhere in the Annual Report are not strictly comparable with those of the previous year.

Pursuant to the transfer of the non-financial services investments of SFL into your Company, the Company has been categorised as an exempted ‘Core Investment Company’ under the Core Investment Companies (Reserve Bank) Directions, 2016, issued by the Reserve Bank of India.

MANAGEMENT DISCUSSION AND ANALYSIS

GLOBAL ECONOMY

According to the IMF’s World Economic Outlook, the Global economic growth strengthened in 2017 to 3.8%, with GDP continuing to accelerate over much of the world and is expected to rise up to 3.9% in the current year. An important indication of the acceleration in growth was the strong employment growth in some of the countries that had high unemployment for some time. Some of the larger emerging market economies, such as Argentina, Brazil and Russia, came out of their recessions. Equity valuations continued to climb and are near record highs, as central banks have maintained accommodative monetary policies due to weak inflation.

DIVIDEND

Your directors are pleased to recommend a dividend of ''1.50 per share on the paid-up share capital of ''75.55 cr. (30% on the face value of '' 5/-), representing a dividend pay-out of 50.20% of profits (including dividend distribution tax).

The Dividend Distribution Policy, formulated in accordance with the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is attached as part of this report, vide Annexure I.

COMPOSITE SCHEME OF ARRANGEMENT AND AMALGAMATION

Pursuant to the sanctioning of the Composite Scheme of Arrangement and Amalgamation (Scheme) by the Hon’ble National Company Law Tribunal (NCLT), Division Bench, Chennai, vide Order dated 12th January 2018, received by the Company on 18th January 2018, the de-merger of the ‘SFL Demerged Undertaking’, i.e., non-core business activities of INDIAN ECONOMY

India has emerged as one of the fastest growing maj or economies in the world as per the IMF. India’s GDP is estimated to have grown by 6.6% in 2017-18 and is expected to grow at 7.3% in 2018-19.

The growth in India’s GDP has to be viewed as satisfactory in the aftermath of two major events - demonetisation and GST. Gross tax collections for the period April 2017- February 2018 showed an increase of 15.8% year-on-year while net retention to the Centre in tax collections recorded a growth of 17%.

India''s foreign exchange reserves stood at USD 424.4 billion at the end of March 2018. However, tepid export growth of 0.7% and higher import growth of 7.1% resulted in the current account deficit worsening to 2.0% from 1.4% in the previous year. Due to the oil price movements, this could worsen further.

The annual average CPI declined from 4.5% in 2016-17 to 3.6% in 2017-18. The IIP increased by 4.3% during the period April to February 2018, as against 4.7% in the corresponding period of the previous year.

However, according to the World Bank''s Doing Business Report India is still ranked only 100 among 190 countries in the 2018 edition of the report.

AUTOMOTIVE SECTOR

A majority of your Company’s investments are in the automotive sector. Growth in the automotive sector was muted during early 2017-18, primarily due to three major developments, viz., demonetisation in the previous year, changeover to the BS IV emission norms and implementation of GST. The industry settled down during the second quarter of the financial year and normal monsoon, coupled with focus of the Government on infrastructure, festive demand and rural sentiment led to an overall strong comeback for the automotive sector.

Society of Indian Automobile Manufacturers (SIAM) expects the growth momentum of Commercial vehicle sales to continue at 10-12% (M&HCVs at 9-11% and LCVs at 10-12%) in 2018-19. The government’s continuing emphasis on infrastructure and a recovery in the mining sector bodes well for sales of tippers.

• Shared Services Business

The shared services business of the Company encompasses services provided to Sundaram Finance Limited and its group/ associate companies on an arm’s length basis. Such services include transaction processing, accounts payable processing, tele-calling, training, learning and development. The revenue

Sales of passenger vehicles are expected to grow at 8-10% (utility vehicles at 14-15% and cars at 8-9%). As per a report by CRISIL, tractor sales are projected to improve by 11-13% in 2018-19, assuming a normal monsoon and increased government support. Demand in semi-urban towns and rural areas is expected to look up as the impact of demonetisation has abated, and a normal monsoon for a third year should bolster sales of passenger cars, LCVs and especially tractors.

OPERATING AND FINANCIAL PERFORMANCE

The revenue earned by your Company during the financial year 2017-18, after considering the effects of the demerger, was Rs,74.38 cr., as against Rs,4.84 cr. in the previous year. The profit after tax for the year was Rs,54.43 cr., as against Rs,0.48 cr. in the previous year. The company’s net-worth stood at Rs,325.83 cr. as on 31.03.2018.

The consolidated profit after tax and net worth for the year stood at Rs,124.44 cr.and Rs,833.59 cr. respectively.

BPO BUSINESS

The BPO business of the Company comprises the following:

Type of Business

Turnover (Rs, in cr.)

Shared services business managed by the Company

13.50

Sundaram Business Services Limited - for managing outsourced business of overseas clients (Wholly-owned Subsidiary)

30.05

Sundaram BPO India Limited - for managing outsourced business of domestic clients (Wholly-owned Subsidiary)

8.65

Total

52.20

effects of demerger, as against Rs,17.10 cr. during the previous year. The loss after tax for the year was at Rs,1.60 cr. as against Rs,0.42 cr. in the previous year. The company had 397 employees as on 31st March 2018.

The Board of Directors of your Company has decided, in principle, to amalgamate SBIL with SBSL, in order to create greater scale and more focus on the BPO business going forward.

INVESTMENT PORTFOLIO

Pursuant to the sanctioning of the Composite Scheme of Arrangement and Amalgamation by the Hon’ble NCLT, the investments of Sundaram Finance Limited in several automotive and manufacturing businesses have been demerged into your Company. Pursuant to the demerger, the Company holds investments in 17 portfolio companies as at 31.03.2018. The total carrying cost of these investments is ''118.89 cr. The performance of the key portfolio companies during 2017-18 was as follows:

earned
from the shared services business during the year was ''13.50 cr. The business had 501 employees as on 31st March 2018.

- Sundaram Business Services Limited

Sundaram Business Services Limited (SBSL) is a global outsourcing company catering to over 35 clients in Australia and the UK. SBSL offers best in class outsourcing, helping Accounting firms, CFOs and CMOs through its innovative service offerings. During the year, SBSL earned a revenue of ''30.05 cr., as compared to ''26.81 cr. in the previous year. The company reported a profit after tax of ''6.56 cr. during the year as against ''1.22 cr. in the previous year. The company had 345 employees as on 31st March 2018.

- Sundaram BPO India Limited

Sundaram BPO India Limited (SBIL) is a domestic BPO with over 15 clients across both voice and non-voice services. SBIL earned a total revenue of ''8.65 cr. during the year, after considering the

Sl.

No.

Portfolio Company

Holding

Cost

Holding

(%)

Net worth

Share of Net worth

PAT

Share of PAT

1

Turbo Energy Private Limited

1.89

32.00

1,171.81

374.98

172.37

55.16

2

Brakes India Private Limited

0.15

6.67

1,706.51

113.82

375.94

25.08

3

Dunes Oman LLC (FZC)

26.95

43.69

230.37

100.65

63.62

27.80

4

Sundaram Clayton Limited

14.28

11.24

664.00

74.63

54.92

6.17

5

Flometallic India Private Limited

32.50

40.63

139.23

56.57

34.09

13.85

6

Wheels India Limited

8.38

11.08

460.35

51.01

52.30

5.79

7

India Motor Parts and Accessories Limited

5.77

18.52

253.85

47.01

20.79

3.85

8

Axles India Limited

10.16

38.81

109.69

42.57

22.61

8.77

9

Lucas-TVS Limited

0.27

5.32

751.71

39.99

47.61

2.53

10

Delphi-TVS Diesel Systems Limited

0.18

3.19

287.00

9.15

6.19

0.20

11

Others

18.36

NA

126.99

22.23

3.71

2.77

Total

118.89

932.61

151.97

Note: The figures relating to the companies mentioned under Sl. Nos. 2, 9 and 10 are based on the audited financial results for the year ended 31st March 2017. The figures relating to the companies mentioned under Sl. Nos. 6 and 7 are based on the unaudited financial results for the nine months ended 31st December 2017, which were subjected to Limited Review. The figures relating to the companies mentioned under Sl. Nos. 1, 3, 4, 5 and 8 are based on the audited financial results for the year ended 31st March 2018.

Turbo Energy Private Limited

Turbo Energy Private Limited is the leading manufacturer of turbo chargers and turbo charger parts in the country. Pursuant to the demerger, your Company holds 32% stake in Turbo Energy Private Limited and has been categorised as one of the promoters of that company. Borg warner Turbo Systems (Germany) and Brakes India Private Limited are the other promoters of the company. During the year the revenue earned by the company grew by 19.79% from ''1031.96 cr. to ''1236.23 cr. The profit after tax for the year was ''172.37 cr. as against ''139.10 cr. in the previous year, registering a growth of 23.92%. Your Company received a total dividend of ''7.17 cr. from Turbo Energy Private Limited during the financial year 2017-18.

Brakes India Private Limited

Brakes India Private Limited is the market leader in the manufacture of braking systems for cars and commercial vehicles in the country. Pursuant to the demerger, your Company holds 6.67% stake in Brakes India Private Limited and has been categorised as one of the promoters of that company. TRW Automotive (since acquired by and now part of ZF Group) and the TVS Group are the other promoters of the company. The revenue earned by the company for the year ended 31st March 2017 grew by 5.90% from ''3906.02 cr. to ''4136.48cr. The profit after tax for the year ended 31st March 2017 was ''375.94 cr. as against ''307.19 cr. in the previous year, registering a growth of 22.38%. Your Company received a total dividend of ''8.77 cr. from Brakes India Private Limited during the financial year 2017-18.

Dunes Oman LLC (FZC)

Dunes Oman LLC (FZC), operating in Salalah, Sultanate of Oman, is engaged in the manufacture of iron castings for the automotive industry. Pursuant to the demerger, your Company holds 43.69% stake in Dunes Oman LLC (FZC) and has been categorised as one of the promoters of that company. Dunes Oman was copromoted with Brakes India Private Limited. During the year the revenue earned by the company grew by 1.97% from Rs,325.13 cr. to Rs,331.55 cr. The profit after tax for the year was Rs,63.62 cr. as against Rs,70.36 cr. in the previous year. Your Company received a total dividend of ''26.08 cr. from Dunes Oman LLC (FZC) during the financial year 2017-18.

Sundaram Clayton Limited

Sundaram Clayton Limited is engaged in the manufacture of precision aluminium cast products for both automotive and non-automotive applications. Pursuant to the demerger, your Company holds 11.24% stake in Sundaram Clayton Limited and has been categorised as one of the promoters of that company. The TVS Group is the other promoter of the company. During the year the revenue earned by the company grew by 11.14% from Rs,1589.67 cr. to Rs,1766.74 cr. The profit after tax for the year was Rs,54.92 cr. as against Rs,105.59 cr. in the previous year. The market capitalisation of the company as on 31st March 2018 was Rs,9745.29 cr. The value of your Company’s holding on that basis, was Rs,1094.89 cr., as on 31st March 2018. Your Company received a total dividend of Rs,3.41 cr. from Sundaram Clayton Limited during the financial year 2017-18.

Flometallic India Private Limited

Flometallic India Private Limited is engaged in the manufacture of iron castings for the automotive industry. Pursuant to the demerger, your Company holds 40.63% stake in Flometallic India Private Limited. During the year the revenue earned by the company grew by 14.15% from Rs,265.42 cr. to Rs,302.98 cr. The profit after tax for the year was Rs,34.09 cr. as against Rs,25.37 cr. in the previous year, registering a growth of 34.37%. Your Company received a total dividend of Rs,4.06 cr. from Flometallic India Private Limited during the financial year 2017-18.

Wheels India Limited

Wheels India Limited is the leading manufacturer of wheels and air suspension components for cars and commercial vehicles in the country. Pursuant to the demerger, your Company holds 11.08% stake in Wheels India Limited and has been categorised as one of the promoters of that company. Titan Limited and the TVS Group are the other promoters of the company. For the period ended 31st December 2017, the revenue earned by the company grew by 3.94% to Rs,1812.24 cr., as against Rs,1743.49 cr. for the corresponding period in the previous year. The profit after tax for the nine months ended 31st December 2017 was Rs,52.30 cr. as against Rs,41.11 cr. for the corresponding period in the previous year, registering a growth of 27.22%. The market capitalisation of the company as on 31st March 2018 was Rs,2707.68 cr. The value of your Company’s holding on that basis, was Rs,300.14 cr., as on 31st March 2018. Your Company received a total dividend of Rs,1.87 cr. from Wheels India Limited during the financial year 2017-18.

India Motor Parts and Accessories Limited

India Motor Parts and Accessories Limited is the largest distributor of automotive spare parts and equipment in the country. Pursuant to the demerger, your Company holds 18.52% stake in India Motor Parts and Accessories Limited. For the period ended 31st December 2017, the revenue earned by the company stood at Rs,357.00 cr., as against Rs,397.23 cr. for the corresponding period in the previous year. The profit after tax for the nine months ended 31st December 2017 stood at Rs,20.79 cr. as against Rs,22.96 cr., for the corresponding period in the previous year. The market capitalisation of the company as on 31st March 2018 was Rs,852.55 cr. The value of your Company’s holding on that basis, was Rs,157.89 cr., as on 31st March 2018. Your Company received a total dividend of Rs,0.92 cr. from India Motor Parts and Accessories Limited during the financial year 2017-18.

Axles India Limited

Axles India Limited is a leading manufacturer of axle housings for medium and heavy commercial vehicles in the country. Pursuant to the demerger, your Company holds 38.81% stake in Axles India Limited and has been categorised as one of the promoters of that company. Dana Corporation (USA) and Wheels India Limited are the other promoters of the company. During the year the revenue earned by the company grew by 15.40% from Rs,413.59 cr. to Rs,477.28 cr. The profit after tax for the year was Rs,22.61 cr. as against Rs,15.01 cr. in the previous year, registering a growth of 50.63%. Your Company received a total dividend of Rs,1.78 cr. from Axles India Limited during the financial year 2017-18.

Lucas-TVS Limited

Lucas-TVS Limited is engaged in the manufacture of auto electrical equipment. Pursuant to the demerger, your Company holds 5.32% stake in Lucas-TVS Limited and has been categorised as one of the promoters of that company. The TVS Group is the other promoter of the company. The revenue earned by the company for the year ended 31st March 2017 grew by 8.25% from Rs,1908.57 cr. to Rs,2065.96 cr. The profit after tax for the year ended 31st March 2017 was Rs,47.61 cr. as against Rs,43.32 cr. in the previous year, registering a growth of 9.90%. Your Company received a total dividend of Rs,1.07 cr. from Lucas-TVS Limited during the financial year 2017-18.

Delphi-TVS Diesel Systems Limited

Delphi TVS Diesel Systems Limited is engaged in the manufacture of diesel fuel injection equipment for passenger vehicles, commercial vehicles and tractors. Pursuant to the demerger, your Company holds 3.19% stake in Delphi TVS Diesel Systems Limited and has been categorised as one of the promoters of that company. Delphi Automotive Systems and the TVS Group are the other promoters of the company. The revenue earned by the company for the year ended 31st March 2017 grew by 3.37% from Rs,856.24 cr. to Rs,885.08 cr. The profit after tax for the year ended 31st March 2017 was Rs,6.19 cr. as against a loss of Rs,1.73 cr. in the previous year. Your Company received a total dividend of Rs,0.35 cr. from Delphi TVS Diesel Systems Limited during the financial year 2017-18.

CORPORATE GOVERNANCE

A detailed report on corporate governance, together with a certificate from the Secretarial Auditor, in compliance with the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, is attached as part of this report, vide Annexure II.

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

RELATED PARTY TRANSACTIONS

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

Transactions is attached as part of this report, vide Annexure III (ii), as required under Reg. 23(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has contributed towards preventive and general health care, in consonance with the CSR policy. Steps have been taken to put in place necessary infrastructure to identify worthy causes which can be supported on an on going basis.

The Annual Report on CSR Activities undertaken by the Company for the Financial Year 2017-18, is annexed with this report, vide Annexure IV.

BUSINESS RESPONSIBILITY REPORT

A Business Responsibility Report as required under Regulation 34(2) (f) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, is enclosed as part of this report, vide Annexure V.

DISCLOSURE UNDER THE PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE POLICY

The Company has in place a Policy for prevention of Sexual Harassment, in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints were received during the year 2017-18.

SECRETARIAL AUDIT

In terms of Section 204 of the Companies Act, 2013 and the rules thereunder, the Company has appointed Mr. A. Kalyana Subramaniam, Practising Company Secretary, as the Secretarial Auditor of the Company. The Secretarial Audit Report as provided by him is annexed to this Report, vide Annexure VI.

REMUNERATION TO DIRECTORS / KEY MANAGEMENT PERSONNEL

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

EXTRACT OF ANNUAL RETURN

As required under Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in Form No. MGT-9 is annexed as part of this report, vide Annexure VIII.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, no significant and material orders were passed by the regulators, courts or tribunals against the Company, impacting its going concern status or its future operations.

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

Your Company has no activity relating to conservation of energy or technology absorption. During 2017-18, foreign currency earnings amounted to Rs,26.08 cr. There was no expenditure in foreign currency.

INTERNAL FINANCIAL CONTROLS

The Company has a well-established internal financial control and risk management framework, with appropriate policies and procedures, to ensure the highest standards of integrity and transparency in its operations and a strong corporate governance structure, while maintaining excellence in services to all its stakeholders. Appropriate controls are in place to ensure:

(a) the orderly and efficient conduct of business, including adherence to policies (b) safeguarding of assets (c) prevention and detection of frauds / errors (d) accuracy and completeness of the accounting records and (e) timely preparation of reliable financial information.

RISK MANAGEMENT

Your Company has taken effective steps to build a robust risk management framework. Engaged, as it is, in the busines

of making investments and business process outsourcing services, the Company has to manage various risks, including investment related risk, business and market risk, operational risk and technology related risk. The Company has established

systems and procedures to ensure that these risks are identified, measured and managed effectively. The Audit Committee reviews these risks on a regular basis.

Operational risks arising from inadequate or failed internal processes, people and systems or from external events are adequately addressed by the internal control systems. These systems are continuously reviewed, monitored and modified, as necessary. A stable and experienced management team provides much needed continuity and expertise in managing the dynamic changes in the market environment. Process improvements and quality control are on-going activities and are built into the employees'' training modules, as well. The Company has well documented Standard Operating Procedures for all processes to ensure better control over transaction processing and regulatory compliance.

INTERNAL AUDIT

As part of the efforts to evaluate the effectiveness of the internal control systems, your Company has employed the services of the Internal Audit Department (IAD) of Sundaram Finance Limited (SFL) to independently evaluate the adequacy of control measures on a periodic basis and recommend improvements, wherever appropriate. The Internal Audit team plays a vital role in continuously monitoring the effectiveness of the Standard Operating Procedures, as a part of risk mitigation.

The IAD of SFL is manned by highly qualified and experienced personnel and reports directly to the Audit Committee of the Board. The Audit Committee regularly reviews the audit findings as well as the adequacy and effectiveness of the internal control measures.

HUMAN RESOURCES

Pursuant to the demerger, nearly 500 employees have been transferred from Sundaram Finance Limited and Sundaram BPO India Limited into your Company on and from the ‘Effective Date’. In an environment that is rapidly becoming technology and digital oriented, your Company believes in investing in long term people development, for organisational excellence. Part of the enduring tradition of the Sundaram Finance Group, over the decades, has been the handing down of wisdom to successive generations of employees, using the conventional methods of listening, observing and on the job training. Your Company proposes to continue the tradition along with appropriate technological support to meet the challenges of growth and scale.

INFORMATION TECHNOLOGY

Your Company’s operations are supported by a full-fledged Data Centre catering not only to its own needs, but also those of its subsidiaries, with over 99.5% uptime. Your company has a well-planned Business Continuity Plan for all critical applications with near real-time data replication.

The delivery centres meet the Information Security Management System and CIA (Confidentiality, Integrity and Availability) Standards. To cater to the ever changing customer needs, the IT infrastructure is being constantly upgraded with new / enhanced features to facilitate smooth functioning of operations and deliver customer satisfaction.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Consolidated Financial Statements, drawn up in accordance with the applicable Accounting Standards, form part of the Annual Report. A separate statement containing the salient features of the financial statements of Subsidiaries and Associates in Form AOC-1 forms part of the Annual Report.

The annual accounts of all the Subsidiary Companies have been posted on your Company’s website - www.sundaramholdings.in. Detailed information, including the annual accounts of the Subsidiary Companies will be available for inspection by the members, at the registered office of the Company and will also be made available to the members upon request.

BOARD AND AUDIT COMMITTEE

The details regarding number of Board Meetings held during the financial year and composition of Audit Committee are furnished in the Corporate Governance Report.

DIRECTORS

Sri Harsha Viji retires by rotation and being eligible, offers himself for re-election.

KEY MANAGERIAL PERSONNEL

The following key managerial personnel were appointed during the year:

3. Proper and sufficient care has been exercised for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

5. Adequate internal financial controls have been put in place and they are operating effectively; and

6. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS

M/s R.G.N. Price & Co., Chartered Accountants, Chennai, were appointed as Statutory Auditors of your Company, to hold office for a term of five (5) consecutive years from the conclusion of the 23rd Annual General Meeting until the conclusion of the 28th Annual General Meeting. Their appointment for periods subsequent to the conclusion of the 24th Annual General Meeting shall be subject to one time ratification by the members at the ensuing Annual General Meeting at such remuneration as may be mutually agreed between the Board of Directors of the Company and the Statutory Auditors.

ACKNOWLEDGEMENT

Your directors gratefully acknowledge the support and co-operation extended to your Company by all its clients, shareholders and bankers.

Your directors also place on record their special appreciation of the employees of the Company for their dedication and commitment in delivering the highest quality of service to every one of our valued customers.

For and on behalf of the Board

Chennai 600 002 S VIJI

24.05.2018 Chairman


Mar 31, 2018

Board’s Report

The directors have pleasure in presenting the 24th Annual Report together with audited accounts for the year ended 31st March 2018. The summarised financial results of the Company are presented hereunder:

FINANCIAL RESULTS:

(Rs, in cr.)

Particulars

Year ended March 31, 2018

Revenue from Portfolio Companies

57.00

Operating Revenue

13.50

Other Income

3.88

Total Revenue

74.38

Less: Total Expenses

14.53

Profit before Tax

59.85

Profit after Tax

54.43

Consolidated PAT

124.44

Finance Limited (SFL), viz., identified shared services undertaken by SFL including shared services vested from Sundaram BPO India Limited, training services rendered by SFL, non-financial services investments of SFL, together with related assets, into your Company, as envisaged in the Scheme with effect from the ‘Appointed Date’, i.e., 1st April 2016, has become operative.

As provided in the Scheme, on 12th February 2018, all the shareholders of SFL were allotted 1 (One) equity share of '' 5/- each credited as fully paid-up in the capital of SFHL for every 1 (One) fully paid-up equity share of ''10/- held by them in SFL as on the record date, i.e., 2nd February 2018. The equity shares of the Company were listed on the National Stock Exchange of India Limited with effect from 26th March 2018.

The accounts for the financial year ended 31st March 2018 have been prepared after giving effect to the Scheme and, therefore, the figures given herein and elsewhere in the Annual Report are not strictly comparable with those of the previous year.

Pursuant to the transfer of the non-financial services investments of SFL into your Company, the Company has been categorised as an exempted ‘Core Investment Company’ under the Core Investment Companies (Reserve Bank) Directions, 2016, issued by the Reserve Bank of India.

MANAGEMENT DISCUSSION AND ANALYSIS

GLOBAL ECONOMY

According to the IMF’s World Economic Outlook, the Global economic growth strengthened in 2017 to 3.8%, with GDP continuing to accelerate over much of the world and is expected to rise up to 3.9% in the current year. An important indication of the acceleration in growth was the strong employment growth in some of the countries that had high unemployment for some time. Some of the larger emerging market economies, such as Argentina, Brazil and Russia, came out of their recessions. Equity valuations continued to climb and are near record highs, as central banks have maintained accommodative monetary policies due to weak inflation.

DIVIDEND

Your directors are pleased to recommend a dividend of ''1.50 per share on the paid-up share capital of ''75.55 cr. (30% on the face value of '' 5/-), representing a dividend pay-out of 50.20% of profits (including dividend distribution tax).

The Dividend Distribution Policy, formulated in accordance with the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is attached as part of this report, vide Annexure I.

COMPOSITE SCHEME OF ARRANGEMENT AND AMALGAMATION

Pursuant to the sanctioning of the Composite Scheme of Arrangement and Amalgamation (Scheme) by the Hon’ble National Company Law Tribunal (NCLT), Division Bench, Chennai, vide Order dated 12th January 2018, received by the Company on 18th January 2018, the de-merger of the ‘SFL Demerged Undertaking’, i.e., non-core business activities of INDIAN ECONOMY

India has emerged as one of the fastest growing maj or economies in the world as per the IMF. India’s GDP is estimated to have grown by 6.6% in 2017-18 and is expected to grow at 7.3% in 2018-19.

The growth in India’s GDP has to be viewed as satisfactory in the aftermath of two major events - demonetisation and GST. Gross tax collections for the period April 2017- February 2018 showed an increase of 15.8% year-on-year while net retention to the Centre in tax collections recorded a growth of 17%.

India''s foreign exchange reserves stood at USD 424.4 billion at the end of March 2018. However, tepid export growth of 0.7% and higher import growth of 7.1% resulted in the current account deficit worsening to 2.0% from 1.4% in the previous year. Due to the oil price movements, this could worsen further.

The annual average CPI declined from 4.5% in 2016-17 to 3.6% in 2017-18. The IIP increased by 4.3% during the period April to February 2018, as against 4.7% in the corresponding period of the previous year.

However, according to the World Bank''s Doing Business Report India is still ranked only 100 among 190 countries in the 2018 edition of the report.

AUTOMOTIVE SECTOR

A majority of your Company’s investments are in the automotive sector. Growth in the automotive sector was muted during early 2017-18, primarily due to three major developments, viz., demonetisation in the previous year, changeover to the BS IV emission norms and implementation of GST. The industry settled down during the second quarter of the financial year and normal monsoon, coupled with focus of the Government on infrastructure, festive demand and rural sentiment led to an overall strong comeback for the automotive sector.

Society of Indian Automobile Manufacturers (SIAM) expects the growth momentum of Commercial vehicle sales to continue at 10-12% (M&HCVs at 9-11% and LCVs at 10-12%) in 2018-19. The government’s continuing emphasis on infrastructure and a recovery in the mining sector bodes well for sales of tippers.

• Shared Services Business

The shared services business of the Company encompasses services provided to Sundaram Finance Limited and its group/ associate companies on an arm’s length basis. Such services include transaction processing, accounts payable processing, tele-calling, training, learning and development. The revenue

Sales of passenger vehicles are expected to grow at 8-10% (utility vehicles at 14-15% and cars at 8-9%). As per a report by CRISIL, tractor sales are projected to improve by 11-13% in 2018-19, assuming a normal monsoon and increased government support. Demand in semi-urban towns and rural areas is expected to look up as the impact of demonetisation has abated, and a normal monsoon for a third year should bolster sales of passenger cars, LCVs and especially tractors.

OPERATING AND FINANCIAL PERFORMANCE

The revenue earned by your Company during the financial year 2017-18, after considering the effects of the demerger, was Rs,74.38 cr., as against Rs,4.84 cr. in the previous year. The profit after tax for the year was Rs,54.43 cr., as against Rs,0.48 cr. in the previous year. The company’s net-worth stood at Rs,325.83 cr. as on 31.03.2018.

The consolidated profit after tax and net worth for the year stood at Rs,124.44 cr.and Rs,833.59 cr. respectively.

BPO BUSINESS

The BPO business of the Company comprises the following:

Type of Business

Turnover (Rs, in cr.)

Shared services business managed by the Company

13.50

Sundaram Business Services Limited - for managing outsourced business of overseas clients (Wholly-owned Subsidiary)

30.05

Sundaram BPO India Limited - for managing outsourced business of domestic clients (Wholly-owned Subsidiary)

8.65

Total

52.20

effects of demerger, as against Rs,17.10 cr. during the previous year. The loss after tax for the year was at Rs,1.60 cr. as against Rs,0.42 cr. in the previous year. The company had 397 employees as on 31st March 2018.

The Board of Directors of your Company has decided, in principle, to amalgamate SBIL with SBSL, in order to create greater scale and more focus on the BPO business going forward.

INVESTMENT PORTFOLIO

Pursuant to the sanctioning of the Composite Scheme of Arrangement and Amalgamation by the Hon’ble NCLT, the investments of Sundaram Finance Limited in several automotive and manufacturing businesses have been demerged into your Company. Pursuant to the demerger, the Company holds investments in 17 portfolio companies as at 31.03.2018. The total carrying cost of these investments is ''118.89 cr. The performance of the key portfolio companies during 2017-18 was as follows:

earned
from the shared services business during the year was ''13.50 cr. The business had 501 employees as on 31st March 2018.

- Sundaram Business Services Limited

Sundaram Business Services Limited (SBSL) is a global outsourcing company catering to over 35 clients in Australia and the UK. SBSL offers best in class outsourcing, helping Accounting firms, CFOs and CMOs through its innovative service offerings. During the year, SBSL earned a revenue of ''30.05 cr., as compared to ''26.81 cr. in the previous year. The company reported a profit after tax of ''6.56 cr. during the year as against ''1.22 cr. in the previous year. The company had 345 employees as on 31st March 2018.

- Sundaram BPO India Limited

Sundaram BPO India Limited (SBIL) is a domestic BPO with over 15 clients across both voice and non-voice services. SBIL earned a total revenue of ''8.65 cr. during the year, after considering the

Sl.

No.

Portfolio Company

Holding

Cost

Holding

(%)

Net worth

Share of Net worth

PAT

Share of PAT

1

Turbo Energy Private Limited

1.89

32.00

1,171.81

374.98

172.37

55.16

2

Brakes India Private Limited

0.15

6.67

1,706.51

113.82

375.94

25.08

3

Dunes Oman LLC (FZC)

26.95

43.69

230.37

100.65

63.62

27.80

4

Sundaram Clayton Limited

14.28

11.24

664.00

74.63

54.92

6.17

5

Flometallic India Private Limited

32.50

40.63

139.23

56.57

34.09

13.85

6

Wheels India Limited

8.38

11.08

460.35

51.01

52.30

5.79

7

India Motor Parts and Accessories Limited

5.77

18.52

253.85

47.01

20.79

3.85

8

Axles India Limited

10.16

38.81

109.69

42.57

22.61

8.77

9

Lucas-TVS Limited

0.27

5.32

751.71

39.99

47.61

2.53

10

Delphi-TVS Diesel Systems Limited

0.18

3.19

287.00

9.15

6.19

0.20

11

Others

18.36

NA

126.99

22.23

3.71

2.77

Total

118.89

932.61

151.97

Note: The figures relating to the companies mentioned under Sl. Nos. 2, 9 and 10 are based on the audited financial results for the year ended 31st March 2017. The figures relating to the companies mentioned under Sl. Nos. 6 and 7 are based on the unaudited financial results for the nine months ended 31st December 2017, which were subjected to Limited Review. The figures relating to the companies mentioned under Sl. Nos. 1, 3, 4, 5 and 8 are based on the audited financial results for the year ended 31st March 2018.

Turbo Energy Private Limited

Turbo Energy Private Limited is the leading manufacturer of turbo chargers and turbo charger parts in the country. Pursuant to the demerger, your Company holds 32% stake in Turbo Energy Private Limited and has been categorised as one of the promoters of that company. Borg warner Turbo Systems (Germany) and Brakes India Private Limited are the other promoters of the company. During the year the revenue earned by the company grew by 19.79% from ''1031.96 cr. to ''1236.23 cr. The profit after tax for the year was ''172.37 cr. as against ''139.10 cr. in the previous year, registering a growth of 23.92%. Your Company received a total dividend of ''7.17 cr. from Turbo Energy Private Limited during the financial year 2017-18.

Brakes India Private Limited

Brakes India Private Limited is the market leader in the manufacture of braking systems for cars and commercial vehicles in the country. Pursuant to the demerger, your Company holds 6.67% stake in Brakes India Private Limited and has been categorised as one of the promoters of that company. TRW Automotive (since acquired by and now part of ZF Group) and the TVS Group are the other promoters of the company. The revenue earned by the company for the year ended 31st March 2017 grew by 5.90% from ''3906.02 cr. to ''4136.48cr. The profit after tax for the year ended 31st March 2017 was ''375.94 cr. as against ''307.19 cr. in the previous year, registering a growth of 22.38%. Your Company received a total dividend of ''8.77 cr. from Brakes India Private Limited during the financial year 2017-18.

Dunes Oman LLC (FZC)

Dunes Oman LLC (FZC), operating in Salalah, Sultanate of Oman, is engaged in the manufacture of iron castings for the automotive industry. Pursuant to the demerger, your Company holds 43.69% stake in Dunes Oman LLC (FZC) and has been categorised as one of the promoters of that company. Dunes Oman was copromoted with Brakes India Private Limited. During the year the revenue earned by the company grew by 1.97% from Rs,325.13 cr. to Rs,331.55 cr. The profit after tax for the year was Rs,63.62 cr. as against Rs,70.36 cr. in the previous year. Your Company received a total dividend of ''26.08 cr. from Dunes Oman LLC (FZC) during the financial year 2017-18.

Sundaram Clayton Limited

Sundaram Clayton Limited is engaged in the manufacture of precision aluminium cast products for both automotive and non-automotive applications. Pursuant to the demerger, your Company holds 11.24% stake in Sundaram Clayton Limited and has been categorised as one of the promoters of that company. The TVS Group is the other promoter of the company. During the year the revenue earned by the company grew by 11.14% from Rs,1589.67 cr. to Rs,1766.74 cr. The profit after tax for the year was Rs,54.92 cr. as against Rs,105.59 cr. in the previous year. The market capitalisation of the company as on 31st March 2018 was Rs,9745.29 cr. The value of your Company’s holding on that basis, was Rs,1094.89 cr., as on 31st March 2018. Your Company received a total dividend of Rs,3.41 cr. from Sundaram Clayton Limited during the financial year 2017-18.

Flometallic India Private Limited

Flometallic India Private Limited is engaged in the manufacture of iron castings for the automotive industry. Pursuant to the demerger, your Company holds 40.63% stake in Flometallic India Private Limited. During the year the revenue earned by the company grew by 14.15% from Rs,265.42 cr. to Rs,302.98 cr. The profit after tax for the year was Rs,34.09 cr. as against Rs,25.37 cr. in the previous year, registering a growth of 34.37%. Your Company received a total dividend of Rs,4.06 cr. from Flometallic India Private Limited during the financial year 2017-18.

Wheels India Limited

Wheels India Limited is the leading manufacturer of wheels and air suspension components for cars and commercial vehicles in the country. Pursuant to the demerger, your Company holds 11.08% stake in Wheels India Limited and has been categorised as one of the promoters of that company. Titan Limited and the TVS Group are the other promoters of the company. For the period ended 31st December 2017, the revenue earned by the company grew by 3.94% to Rs,1812.24 cr., as against Rs,1743.49 cr. for the corresponding period in the previous year. The profit after tax for the nine months ended 31st December 2017 was Rs,52.30 cr. as against Rs,41.11 cr. for the corresponding period in the previous year, registering a growth of 27.22%. The market capitalisation of the company as on 31st March 2018 was Rs,2707.68 cr. The value of your Company’s holding on that basis, was Rs,300.14 cr., as on 31st March 2018. Your Company received a total dividend of Rs,1.87 cr. from Wheels India Limited during the financial year 2017-18.

India Motor Parts and Accessories Limited

India Motor Parts and Accessories Limited is the largest distributor of automotive spare parts and equipment in the country. Pursuant to the demerger, your Company holds 18.52% stake in India Motor Parts and Accessories Limited. For the period ended 31st December 2017, the revenue earned by the company stood at Rs,357.00 cr., as against Rs,397.23 cr. for the corresponding period in the previous year. The profit after tax for the nine months ended 31st December 2017 stood at Rs,20.79 cr. as against Rs,22.96 cr., for the corresponding period in the previous year. The market capitalisation of the company as on 31st March 2018 was Rs,852.55 cr. The value of your Company’s holding on that basis, was Rs,157.89 cr., as on 31st March 2018. Your Company received a total dividend of Rs,0.92 cr. from India Motor Parts and Accessories Limited during the financial year 2017-18.

Axles India Limited

Axles India Limited is a leading manufacturer of axle housings for medium and heavy commercial vehicles in the country. Pursuant to the demerger, your Company holds 38.81% stake in Axles India Limited and has been categorised as one of the promoters of that company. Dana Corporation (USA) and Wheels India Limited are the other promoters of the company. During the year the revenue earned by the company grew by 15.40% from Rs,413.59 cr. to Rs,477.28 cr. The profit after tax for the year was Rs,22.61 cr. as against Rs,15.01 cr. in the previous year, registering a growth of 50.63%. Your Company received a total dividend of Rs,1.78 cr. from Axles India Limited during the financial year 2017-18.

Lucas-TVS Limited

Lucas-TVS Limited is engaged in the manufacture of auto electrical equipment. Pursuant to the demerger, your Company holds 5.32% stake in Lucas-TVS Limited and has been categorised as one of the promoters of that company. The TVS Group is the other promoter of the company. The revenue earned by the company for the year ended 31st March 2017 grew by 8.25% from Rs,1908.57 cr. to Rs,2065.96 cr. The profit after tax for the year ended 31st March 2017 was Rs,47.61 cr. as against Rs,43.32 cr. in the previous year, registering a growth of 9.90%. Your Company received a total dividend of Rs,1.07 cr. from Lucas-TVS Limited during the financial year 2017-18.

Delphi-TVS Diesel Systems Limited

Delphi TVS Diesel Systems Limited is engaged in the manufacture of diesel fuel injection equipment for passenger vehicles, commercial vehicles and tractors. Pursuant to the demerger, your Company holds 3.19% stake in Delphi TVS Diesel Systems Limited and has been categorised as one of the promoters of that company. Delphi Automotive Systems and the TVS Group are the other promoters of the company. The revenue earned by the company for the year ended 31st March 2017 grew by 3.37% from Rs,856.24 cr. to Rs,885.08 cr. The profit after tax for the year ended 31st March 2017 was Rs,6.19 cr. as against a loss of Rs,1.73 cr. in the previous year. Your Company received a total dividend of Rs,0.35 cr. from Delphi TVS Diesel Systems Limited during the financial year 2017-18.

CORPORATE GOVERNANCE

A detailed report on corporate governance, together with a certificate from the Secretarial Auditor, in compliance with the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, is attached as part of this report, vide Annexure II.

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

RELATED PARTY TRANSACTIONS

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

Transactions is attached as part of this report, vide Annexure III (ii), as required under Reg. 23(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has contributed towards preventive and general health care, in consonance with the CSR policy. Steps have been taken to put in place necessary infrastructure to identify worthy causes which can be supported on an on going basis.

The Annual Report on CSR Activities undertaken by the Company for the Financial Year 2017-18, is annexed with this report, vide Annexure IV.

BUSINESS RESPONSIBILITY REPORT

A Business Responsibility Report as required under Regulation 34(2) (f) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, is enclosed as part of this report, vide Annexure V.

DISCLOSURE UNDER THE PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE POLICY

The Company has in place a Policy for prevention of Sexual Harassment, in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints were received during the year 2017-18.

SECRETARIAL AUDIT

In terms of Section 204 of the Companies Act, 2013 and the rules thereunder, the Company has appointed Mr. A. Kalyana Subramaniam, Practising Company Secretary, as the Secretarial Auditor of the Company. The Secretarial Audit Report as provided by him is annexed to this Report, vide Annexure VI.

REMUNERATION TO DIRECTORS / KEY MANAGEMENT PERSONNEL

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

EXTRACT OF ANNUAL RETURN

As required under Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in Form No. MGT-9 is annexed as part of this report, vide Annexure VIII.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, no significant and material orders were passed by the regulators, courts or tribunals against the Company, impacting its going concern status or its future operations.

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

Your Company has no activity relating to conservation of energy or technology absorption. During 2017-18, foreign currency earnings amounted to Rs,26.08 cr. There was no expenditure in foreign currency.

INTERNAL FINANCIAL CONTROLS

The Company has a well-established internal financial control and risk management framework, with appropriate policies and procedures, to ensure the highest standards of integrity and transparency in its operations and a strong corporate governance structure, while maintaining excellence in services to all its stakeholders. Appropriate controls are in place to ensure:

(a) the orderly and efficient conduct of business, including adherence to policies (b) safeguarding of assets (c) prevention and detection of frauds / errors (d) accuracy and completeness of the accounting records and (e) timely preparation of reliable financial information.

RISK MANAGEMENT

Your Company has taken effective steps to build a robust risk management framework. Engaged, as it is, in the busines

of making investments and business process outsourcing services, the Company has to manage various risks, including investment related risk, business and market risk, operational risk and technology related risk. The Company has established

systems and procedures to ensure that these risks are identified, measured and managed effectively. The Audit Committee reviews these risks on a regular basis.

Operational risks arising from inadequate or failed internal processes, people and systems or from external events are adequately addressed by the internal control systems. These systems are continuously reviewed, monitored and modified, as necessary. A stable and experienced management team provides much needed continuity and expertise in managing the dynamic changes in the market environment. Process improvements and quality control are on-going activities and are built into the employees'' training modules, as well. The Company has well documented Standard Operating Procedures for all processes to ensure better control over transaction processing and regulatory compliance.

INTERNAL AUDIT

As part of the efforts to evaluate the effectiveness of the internal control systems, your Company has employed the services of the Internal Audit Department (IAD) of Sundaram Finance Limited (SFL) to independently evaluate the adequacy of control measures on a periodic basis and recommend improvements, wherever appropriate. The Internal Audit team plays a vital role in continuously monitoring the effectiveness of the Standard Operating Procedures, as a part of risk mitigation.

The IAD of SFL is manned by highly qualified and experienced personnel and reports directly to the Audit Committee of the Board. The Audit Committee regularly reviews the audit findings as well as the adequacy and effectiveness of the internal control measures.

HUMAN RESOURCES

Pursuant to the demerger, nearly 500 employees have been transferred from Sundaram Finance Limited and Sundaram BPO India Limited into your Company on and from the ‘Effective Date’. In an environment that is rapidly becoming technology and digital oriented, your Company believes in investing in long term people development, for organisational excellence. Part of the enduring tradition of the Sundaram Finance Group, over the decades, has been the handing down of wisdom to successive generations of employees, using the conventional methods of listening, observing and on the job training. Your Company proposes to continue the tradition along with appropriate technological support to meet the challenges of growth and scale.

INFORMATION TECHNOLOGY

Your Company’s operations are supported by a full-fledged Data Centre catering not only to its own needs, but also those of its subsidiaries, with over 99.5% uptime. Your company has a well-planned Business Continuity Plan for all critical applications with near real-time data replication.

The delivery centres meet the Information Security Management System and CIA (Confidentiality, Integrity and Availability) Standards. To cater to the ever changing customer needs, the IT infrastructure is being constantly upgraded with new / enhanced features to facilitate smooth functioning of operations and deliver customer satisfaction.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Consolidated Financial Statements, drawn up in accordance with the applicable Accounting Standards, form part of the Annual Report. A separate statement containing the salient features of the financial statements of Subsidiaries and Associates in Form AOC-1 forms part of the Annual Report.

The annual accounts of all the Subsidiary Companies have been posted on your Company’s website - www.sundaramholdings.in. Detailed information, including the annual accounts of the Subsidiary Companies will be available for inspection by the members, at the registered office of the Company and will also be made available to the members upon request.

BOARD AND AUDIT COMMITTEE

The details regarding number of Board Meetings held during the financial year and composition of Audit Committee are furnished in the Corporate Governance Report.

DIRECTORS

Sri Harsha Viji retires by rotation and being eligible, offers himself for re-election.

KEY MANAGERIAL PERSONNEL

The following key managerial personnel were appointed during the year:

3. Proper and sufficient care has been exercised for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

5. Adequate internal financial controls have been put in place and they are operating effectively; and

6. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS

M/s R.G.N. Price & Co., Chartered Accountants, Chennai, were appointed as Statutory Auditors of your Company, to hold office for a term of five (5) consecutive years from the conclusion of the 23rd Annual General Meeting until the conclusion of the 28th Annual General Meeting. Their appointment for periods subsequent to the conclusion of the 24th Annual General Meeting shall be subject to one time ratification by the members at the ensuing Annual General Meeting at such remuneration as may be mutually agreed between the Board of Directors of the Company and the Statutory Auditors.

ACKNOWLEDGEMENT

Your directors gratefully acknowledge the support and co-operation extended to your Company by all its clients, shareholders and bankers.

Your directors also place on record their special appreciation of the employees of the Company for their dedication and commitment in delivering the highest quality of service to every one of our valued customers.

For and on behalf of the Board

Chennai 600 002 S VIJI

24.05.2018 Chairman


Mar 31, 2017

The directors have pleasure in presenting the 64th Annual Report together with audited accounts for the year ended 31st March 2017. The summarised financial results of the Company are presented here under:

FINANCIAL RESULTS:

(Rs. in cr.)

Particulars

Year ended March 31, 2017

Year ended March 31, 2016

Revenue from Operations

2356.79

2312.39

Other Income

101.49

162.63

Total Revenue

2458.28

2475.02

Less: Total Expenses

1738.08

1791.79

Profit before tax

720.20

683.23

Profit after Tax

495.35

477.28

Surplus brought forward

176.47

162.11

Amount available for appropriation

671.82

639.39

Appropriations to:

- Statutory Reserve

99.07

95.46

- General Reserve

222.90

222.63

Dividend - Interim

55.55

111.10

Final (Proposed)*

-

11.11

Dividend Tax

8.77

22.62

Surplus carried to balance sheet

285.53

176.47

* Will be recognised as a liability on approval by the shareholders at the Annual General Meeting.

DIVIDEND

Your Company paid an interim dividend of Rs.5/- per share in March 2017. Your directors are pleased to recommend a final dividend of Rs.6.50 per share, which, together with the interim dividend, would aggregate to a total dividend of Rs.11.50 per share (115% on the face value of Rs.10/-).

The Dividend Distribution Policy, formulated in accordance with the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is attached as part of this report, vide Annexure I.

COMPOSITE SCHEME OF ARRANGEMENT AND AMALGAMATION

Over the decades, your Company has invested in various non-financial services businesses, including several investments in automotive and manufacturing businesses, as a co-promoter along with TVS group companies, many of them leaders in their respective markets. Your Company intends to demerge its non-financial services investments, which would result in ring-fencing the regulated financial services assets of the group. Consequent to the demerger, Sundaram Finance Holdings Limited (SFHL) would be the holding company for all non-financial services investments of your Company.

As per the proposal, all shareholders of your Company would receive one share of SFHL free of cost for every share held in your Company as on the record date. The Appointed Date for the scheme is 1st April, 2016. As a promoter, your Company would hold 26.47% stake in SFHL and the balance 73.53% will be issued to all shareholders of your Company. SFHL will be listed on the stock exchange, thereby providing a platform for shareholders to participate in the growth prospects of the investee companies.

The demerger process has been initiated through a Composite Scheme of Arrangement as per the requirements of the Companies Act, 2013. The Board of Directors of your Company, at the meeting held on 17th February 2017, approved the draft Composite Scheme of Arrangement and Amalgamation (Scheme), with effect from the Appointed Date, i.e. 1st April 2016. The Scheme, inter alia, envisages the following:

1. Amalgamation of Sundaram Insurance Broking Services Limited (SIBSL) and Infreight Logistics Solutions Limited (Infreight), wholly-owned subsidiaries, with your Company;

2. De-merger of the shared services business of Sundaram BPO India Limited (Sundaram BPO), subsidiary, into your Company; and

3. De-merger of the non-core business of the Company, viz. training services, identified shared services including shared services vested from Sundaram BPO, apart from the non-financial services investments mentioned above, together with related assets, into Sundaram Finance Holdings Limited (SFHL).

Your Company has obtained a ‘no-objection’ letter from The National Stock Exchange of India Limited, in accordance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as well as the approval of the Competition Commission of India for the proposed combination under Section 6(2) of the Competition Act, 2002. Necessary steps are being taken to file an application with the National Company Law Tribunal for approval.

CORPORATE GOVERNANCE

A detailed report on corporate governance, together with a certificate from the Statutory Auditors, in compliance with the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, is attached as part of this report, vide Annexure II.

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

RELATED PARTY TRANSACTIONS

All transactions entered into by the Company with related parties were in the ordinary course of business and on an arm’s length basis. The Company did not enter into any material transaction with related parties, under Section 188 of the Companies Act, 2013, during the year. Form AOC-2, as required under Section 134 (3) (h) of the Act, read with Rule 8 (2) of the Companies (Accounts) Rules 2014, is attached as part of this report, vide Annexure III (i). Further, the Company’s policy on Related Party Transactions is attached as part of this report, vide Annexure III (ii), as required under the Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company, along with its subsidiaries and associates, has always responded in a responsible manner to the growing needs of the communities in which it operates. During the year, your Company has, in consonance with the CSR policy of the Company, undertaken a number of initiatives that contribute to society at large, in the areas of health, education, environment and preservation of the country’s rich culture and heritage.

The Annual Report on CSR Activities undertaken by the Company for the Financial Year 2016-17, is annexed with this report, vide Annexure IV.

BUSINESS RESPONSIBILITY REPORT

A Business Responsibility Report as required under Regulation 34(2) (f) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, is enclosed as part of this report, vide Annexure V.

DISCLOSURE UNDER THE PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE POLICY’

The Company has in place a Policy for prevention of Sexual Harassment, in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints were received during the year 2016-17.

SECRETARIAL AUDIT

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

REMUNERATION TO DIRECTORS / KEY MANAGEMENT PERSONNEL

Disclosure pursuant to Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, together with the statement prescribed under Rule 5 (2) of the said Rules, is annexed, vide Annexure VII.

SUNDARAM FINANCE EMPLOYEE STOCK OPTION SCHEME

Based on the recommendations of the Nomination, Compensation and Remuneration Committee, your Board of Directors has granted, subject to regulatory approvals where necessary, 18,550 stock options to select eligible employees, on 29.05.2017. The disclosure required under SEBI (Share Based Employee Benefits) Regulations, 2014, is furnished, vide Annexure VIII.

EXTRACT OF ANNUAL RETURN

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

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, no significant and material orders were passed by the regulators, courts or tribunals against the Company, impacting its going concern status or its future operations.

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

Your Company has no activity relating to conservation of energy or technology absorption. During 2016-17, expenditure in foreign currencies amounted to Rs.45.75 cr. Foreign Currency earnings amounted to Rs.23.27 cr.

INFORMATION TECHNOLOGY

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

The Company both develops & maintains robust Business Applications on the Oracle Technology platform, catering to various business verticals such as Hire Purchase, Loans, Leasing, Deposits and Treasury Management and continues to work with Oracle Financials and Hyperion for Financial Accounting and Reporting.

To cater to the ever changing Marketing & Operational needs, the Business Applications are being constantly upgraded with new / enhanced features to facilitate improved Turn-Around Time & Customer Satisfaction. As part of the digital initiatives, your Company has implemented applications in the functional areas of Lending, Deposits, Compliance, Human Resources and Training.

CONSOLIDATED FINANCIAL STATEMENTS

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

The consolidated net profit for the year was Rs.683.48 cr. as against Rs.583.17 cr. in the previous year, a growth of 17.20%. The Company’s consolidated networth stood at Rs.4816.02 cr. as on 31st March 2017.

The annual accounts of all the Subsidiary Companies have been posted on your Company’s website - www.sundaramfinance.in. Detailed information, including the annual accounts of the Subsidiary Companies will be available for inspection by the members, at the registered office of the Company and will also be made available to the members upon request.

SUBSIDIARIES

- Sundaram BNP Paribas Home Finance Limited

The company approved loans aggregating to Rs.2077 cr. (Previous year - Rs.1857 cr.). Disbursements during the year were higher by 5%, at Rs.1831 cr. (PY Rs.1743 cr.).

The company earned a gross income of Rs.923 cr. (PY Rs.927 cr.) and reported a profit after tax at Rs.154 cr. (PY Rs.153 cr.). The loan portfolio under management as at 31st March 2017 stood at Rs.7663 cr. as against Rs.7510 cr. in the previous year. The gross and net NPA stood at 2.94% and 0.98% respectively as of 31.03.2017. The company proposed a dividend of 35% for the year (PY 35%).

- Royal Sundaram General Insurance Co. Ltd (Royal Sundaram)

Royal Sundaram reported a robust increase of 29.4% in Gross Written Premium (GWP) at Rs.2205 cr. as compared to Rs.1703 cr. in the previous year. Profit after tax for the year was Rs.43.05 cr., as against Rs.26.70 cr. in the previous year.

- Sundaram Asset Management Company Limited

Sundaram Asset Management Company Limited reported a gross income of Rs.260.54 cr. as against Rs.229.88 cr. in the previous year. Profit after tax was significantly higher at Rs.30.73 cr. as compared to Rs.4.42 cr. during the previous year.

The Average Assets under Management amounted to Rs.28312 cr. for the year 2016-17 as compared to Rs.23346 cr. in the previous year. The company recommended a dividend of 35% for the year, on the paid-up capital of Rs.20 cr.

- Sundaram Trustee Company Limited

Sundaram Trustee Company Limited earned a gross income of Rs.1.23 cr., as against Rs.1.00 cr., in the previous year and reported a profit after tax of Rs.0.58 cr. for the year, as against Rs.0.46 cr. in the previous year. The company recommended a dividend of 800% for the year as against 700% during the previous year.

- Sundaram Finance Holdings Limited (formerly Sundaram Finance Distribution Limited)

Sundaram Finance Holdings Limited reported a gross income of Rs.4.84 cr. as against Rs.8.14 cr. in the previous year. During the year, the main objects clause in the Memorandum of Association of the company was amended,with a view to engage in the business of investments and the name of the Company was changed from ‘Sundaram Finance Distribution Limited’ to ‘Sundaram Finance Investments Limited’ and subsequently, to ‘Sundaram Finance Holdings Limited’. The profit after tax for the year was Rs.0.48 cr. as against Rs.1.00 cr. in the previous year. During February 2017, the paid-up share capital of the company was increased from Rs.50.00 lakhs to Rs.20.00 cr. by way of a rights issue of 1,95,00,000 equity shares of Rs.10/- each. The company proposed a dividend of 10% for the year on the enhanced capital, payable on pro-rata basis, as against 200% during the previous year.

- LGF Services Limited

During the year, LGF Services Limited reported a gross income of Rs.4.39 cr. as against Rs.6.45 cr. in the previous year. The profit after tax for the year was Rs.0.83 cr. as against Rs.0.82 cr. in the previous year. The company proposed a dividend of 250% for the year, as against 350% during the previous year.

- Sundaram Infotech Solutions Limited (SISL)

The company earned total revenue of Rs.15.17 cr. as against Rs.16.19 cr. in the previous year. The loss after tax for the year was at Rs.1.60 cr. as against Rs.0.82 cr. in the previous year.

The Board of Directors, at the meeting held on 25th November 2016, approved a draft Scheme of Amalgamation of SISL with your Company with effect from the Appointed Date, i.e. 1st April 2016. Your Company has received the ‘no-objection’ letter from National Stock Exchange of India Limited for the draft Scheme and steps have been taken to file the application with the National Company Law Tribunal in accordance with the provisions of Section 232 read with Section 230 and other applicable provisions of the Companies Act, 2013.

- Sundaram BNP Paribas Fund Services Limited

Sundaram BNP Paribas Fund Services Limited earned an income of Rs.32.85 cr. during the year, an increase of 17.70% over the previous year. The company’s reported loss was lower at Rs.4.62 cr. during the year as against Rs.7.93 cr. in the previous year.

- Sundaram BPO India Limited

Sundaram BPO India Limited earned a total revenue of Rs.17.10 cr. during the year as against Rs.16.21 cr. during the previous year. The company reported a loss after tax of Rs.0.42 cr. during the year, as against a profit after tax of Rs.0.06 cr. in the previous year.

- Sundaram Business Services Limited

During the year, Sundaram Business Services Limited earned a revenue of Rs.26.81 cr., as compared to Rs.24.41 cr. in the previous year. The company reported a profit of Rs.1.22 cr. during the year as against Rs.0.01 cr. in the previous year.

BOARD & AUDIT COMMITTEE

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

DIRECTORS

Your Board of Directors has re-appointed Sri T.T. Srinivasaraghavan as Managing Director for a further period of 3 years with effect from 1st April 2018.

Sri Harsha Viji and Sri A.N. Raju retire by rotation and being eligible, offer themselves for re-election.

Sri Aroon Raman, Independent Director of your Company since 2009, resigned his directorship effective 31st October 2016. Your directors place on record the significant contribution made by him to the deliberations of the Board for over seven years.

Sri Rajiv C. Lochan was co-opted as Independent Director on 25th November 2016 and holds office as Additional Director up to the date of the ensuing Annual General Meeting. The Company has received due notice from a member proposing the appointment of Sri Rajiv C. Lochan as Independent Director of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

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

ANNUAL EVALUATION BY THE BOARD

The Board has made a formal evaluation of its own performance and that of its committees and individual directors as required under Section 134(3) (p) of the Companies Act, 2013, based on the Criteria for Evaluation laid down by the Nomination, Compensation and Remuneration Committee and the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your directors confirm that:

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

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

3. Proper and sufficient care has been exercised for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

5. Adequate internal financial controls have been put in place and they are operating effectively; and

6. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS

M/s Brahmayya & Co., Chartered Accountants, Chennai, Statutory Auditors of your Company hold office upto the conclusion of the 64th Annual General Meeting. Section 139(2) of the Companies Act, 2013 read with Rule 6 of the Companies (Audit and Auditors) Rules, 2014 stipulates that no listed company shall re-appoint an audit firm as statutory auditor for more than two terms of five consecutive years. M/s Brahmayya & Co. have been the statutory auditors of your Company since inception and are therefore not eligible for re-appointment.

Your directors recommend the appointment of M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, as Statutory Auditors of the Company, in accordance with the provisions of Sections 139, 141 and other applicable provisions of the Companies Act, 2013, to hold office from the conclusion of 64th Annual General Meeting until the conclusion of 69th Annual General Meeting, subject to the approval of the shareholders at the 64th Annual General Meeting and ratification at every Annual General Meeting thereafter.

Your Directors place on record their grateful appreciation of the contribution made and services rendered by M/s Brahmayya & Co. as Statutory Auditors since the inception of the Company.

ACKNOWLEDGEMENT

Your directors gratefully acknowledge the support and co-operation extended to your Company by all its customers, depositors, shareholders and bankers, as also the various mutual funds, insurance companies, automotive manufacturers and dealers.

Your directors also place on record their special appreciation of Team Sundaram for their dedication and commitment in delivering the highest quality of service to every one of our valued customers.

For and on behalf of the Board

Chennai 600 002 S VIJI

29.05.2017 Chairman


Mar 31, 2015

Dear Members,

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

FINANCIAL RESULTS:

(Rs. in cr.)

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

Revenue from Operations 2254.66 2215.48

Other Income 114.41 98.43

Total Revenue 2369.07 2313.91

Less: Total Expenses 1717.87 1667.28

Profit before tax 651.20 646.63

Profit after Tax 454.14 442.51

Surplus brought forward 137.70 107.95

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

Appropriations to:

- Statutory Reserve 90.83 88.50

- General Reserve 200.00 199.00

Dividend - Interim 50.00 -

Final (Proposed) 66.66 111.10

Dividend Tax 18.22 14.16

Surplus carried to balance sheet 162.11 137.70

CAPITAL RESERVE

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

DIVIDEND

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

CORPORATE GOVERNANCE

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

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

RELATED PARTY TRANSACTIONS

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

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

CORPORATE SOCIAL RESPONSIBILITY

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

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

BUSINESS RESPONSIBILITY REPORT

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

SECRETARIAL AUDIT

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

REMUNERATION TO DIRECTORS & KMP

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

SUNDARAM FINANCE EMPLOYEE STOCK OPTION SCHEME

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

EXTRACT OF ANNUAL RETURN

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

RESOURCE MOBILISATION

a) Deposits

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

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

b) Term Funding

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

c) Bank Finance

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

d) Assets Securitised / Assigned

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

CREDIT RATINGS

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

OUTLOOK

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

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

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

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

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

INTERNAL AUDIT

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

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

RISK MANAGEMENT

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

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

HUMAN RESOURCES

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

INFORMATION TECHNOLOGY

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

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

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

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

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

CONSOLIDATED FINANCIAL STATEMENTS

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

Further,

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

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

SUBSIDIARIES

* Sundaram BNP Paribas Home Finance Limited

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

* Sundaram Asset Management Company Limited

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

* Sundaram Trustee Company Limited

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

* Sundaram Finance Distribution Limited (SFDL)

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

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

* LGF Services Limited

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

* Sundaram Infotech Solutions Limited

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

* Sundaram BNP Paribas Fund Services Limited

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

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

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

* Sundaram BPO India Limited

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

* Sundaram Business Services Limited (SBSL)

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

JOINT VENTURES

* Royal Sundaram Alliance Insurance Company Ltd (Royal Sundaram)

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

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

* BNP Paribas Sundaram Global Securities Operations Private Limited

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

BOARD & AUDIT COMMITTEE

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

DIRECTORS

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

DECLARATION BY INDEPENDENT DIRECTORS

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

ANNUAL EVALUATION BY THE BOARD

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

AUDITORS

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

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

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

PERSONNEL

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

AWARDS AND RECOGNITION

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

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

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

INTERNAL FINANCIAL CONTROLS

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

DIRECTORS'' RESPONSIBILITY STATEMENT

Your directors confirm that:

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

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

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

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

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

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

ACKNOWLEDGEMENT

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

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

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


Mar 31, 2013

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

FINANCIAL RESULTS:

(Rs. in cr.)

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

Revenue from Operations 2063.02 1698.71

Other Income 68.76 60.39

Total Revenue 2131.78 1759.10

Less: Total Expenses 1539.17 1246.95

Profit before Tax 592.61 512.15

Profit after Tax 410.11 355.45

Surplus brought forward 67.56 60.14

Amount available for appropriation 477.67 415.59

Appropriations have been made as under:

Transfers to:

- Statutory Reserve 82.02 71.10

- General Reserve 174.88 179.45

Dividend - Interim 50.00 41.67

Final (Proposed) 50.00 44.44

Dividend Tax 12.82 11.37

Surplus carried to balance sheet 107.95 67.56

477.67 415.59

DIVIDEND

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

CORPORATE GOVERNANCE

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

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

CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

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

SUBSIDIARIES

- Sundaram BNP Paribas Home Finance Limited

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

- Sundaram Asset Management Company Limited

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

- Sundaram Trustee Company Limited

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

- Sundaram Finance Distribution Limited (SFDL)

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

- LGF Services Limited

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

- Sundaram Infotech Solutions Limited (SISL)

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

- Sundaram BNP Paribas Fund Services Limited

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

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

- Infreight Logistics Solutions Limited (Infreight)

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

- Sundaram BPO India Limited

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

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

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

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

- Sundaram Business Services Limited (SBSL)

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

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

- Professional Management Consultants Limited (PMC)

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

- Caltec Servicez Private Limited (Caltec)

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

- Other Subsidiaries

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

JOINT VENTURES

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

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

- BNP Paribas Sundaram Global Securities Operations Private Limited

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

DIRECTORS

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

AUDITORS

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

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

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

PERSONNEL

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

SUNDARAM FINANCE EMPLOYEE STOCK OPTION SCHEME

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

BUSINESS RESPONSIBILITY REPORT

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

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

CORPORATE SOCIAL RESPONSIBILITY

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

Healthcare

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

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

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

Education

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

Culture, Heritage and Children''s Development

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

Environment

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

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

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

DIRECTORS'' RESPONSIBILITY STATEMENT

Your directors confirm that:

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

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

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

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

ACKNOWLEDGEMENT

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

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

For and on behalf of the Board

Chennai 600 002 S VIJI

29th May 2013 Chairman


Mar 31, 2012

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

FINANCIAL RESULTS:

(Rs in Cr.)

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

Revenue from Operations 1701.43 1370.17

Other Income 60.45 80.24

Total Revenue 1761.88 1450.41

Less: Total Expenses 1249.73 1020.96

Profit before Tax 512.15 429.45

Profit after Tax 355.45 295.23

Surplus brought forward 60.14 61.02

Amount available for appropriation 415.59 356.25

Appropriations have been made as under:

Transfers to:

- Statutory Reserve 71.10 59.10

- General Reserve 179.45 154.79

Dividend - Interim 41.67 38.89

Final (Proposed) 44.44 38.89

Dividend Tax 11.37 4.45

Surplus carried to balance sheet 67.56 60.13

415.59 356.25

DIVIDEND

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

CORPORATE GOVERNANCE

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

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

CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

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

SUBSIDIARIES

- Sundaram BNP Paribas Home Finance Limited

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

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

- Sundaram Asset Management Company Limited.

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

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

- Sundaram Trustee Company Limited

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

- Sundaram Finance Distribution Limited (SFDL)

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

- LGF Services Limited

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

- Sundaram Infotech Solutions Limited (SISL)

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

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

- Sundaram Business Services Limited (SBSL)

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

- Professional Management Consultants Limited (PMC)

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

- Sundaram BNP Paribas Fund Services Limited

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

- Infreight Logistics Solutions Limited (Infreight)

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

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

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

- Sundaram Parekh Warehousing Services Limited

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

- Sundaram Insurance Broking Services Limited

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

- Caltec Servicez Private Limited (Caltec)

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

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

JOINT VENTURES

- Royal Sundaram Alliance Insurance Company Ltd (Royal Sundaram)

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

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

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

- BNP Paribas Sundaram Global Securities Operations Private Limited

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

DIRECTORS

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

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

AUDITORS

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

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

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

PERSONNEL

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

SUNDARAM FINANCE EMPLOYEE STOCK OPTION SCHEME

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

DIRECTORS' RESPONSIBILITY STATEMENT

Your directors confirm that:

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

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

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

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

CORPORATE SOCIAL RESPONSIBILITY

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

Healthcare

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

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

Education

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

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

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

ACKNOWLEDGEMENT

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

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

For and on behalf of the Board

Chennai 600 002 S VIJI

28th May, 2012 Chairman


Mar 31, 2011

The directors have pleasure in presenting the 58th Annual Report with audited accounts for the year ended 31st March 2011. The summarised financial results of the Company are given hereunder:

FINANCIAL RESULTS:

(Rs. in Cr.)

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

Income from Operations 1370.78 1204.15

Profit on Sale of Shares – 25.39

Other Income 79.63 41.42

Total Income 1450.41 1270.96

Less: Total Expenditure 1020.04 947.49

Profit before Tax 430.37 323.47

Profit after Tax 295.23 226.75

Surplus brought forward 61.02 41.96

Transfer from Special Reserve – 76.00

Amount available for appropriation 356.25 344.71

Appropriations have been made as under: Transfers to:

– Statutory Reserve 59.10 45.40

– General Reserve 154.79 175.00

Dividend – Interim 38.89 33.33

Final (Proposed) 38.89 22.22

Dividend Tax 4.45 7.74

Surplus carried to balance sheet 60.13 61.02

356.25 344.71

DIVIDEND

Your Company paid a tax-free interim dividend of Rs. 7/- per share (70% on the face value of Rs. 10/-). Your directors are now pleased to recommend a final dividend of Rs. 7/- per share (70% on the face value of Rs. 10/-). This, together with the interim dividend, aggregates to a total dividend of Rs. 14/- per share (140% on the face value of Rs. 10/-) for the financial year ended 31st March 2011, on the paid-up capital of Rs. 55.55 cr.

CORPORATE GOVERNANCE

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

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

CONSOLIDATED FINANCIAL STATEMENTS

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

In accordance with the general exemption granted by the Central Government under Section 212(8) of the Companies Act, 1956 in February 2 011, 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 your Company. The financial information relating to all the Subsidiary Companies, in the aggregate, has been disclosed in the consolidated financial statements, as required. Further,

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

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

SUBSIDIARIES

- Sundaram BNP Paribas Home Finance Limited

The company, approved loans aggregating to Rs. 1496 cr. as against Rs. 915 cr. in the Previous Year (PY), while disbursements at Rs. 1211 cr. (PY Rs. 743 cr), grew significantly by 63%. The company earned a gross income of Rs. 308 cr. (PY Rs. 236 cr.) and reported an impressive 72% growth in profit after tax at Rs. 47.68 cr. (PY Rs. 27.72 cr.). The loan portfolio as at 31st March 2011 stood at Rs. 2653 cr. as against Rs. 1981 cr. in the previous year. The gross and net NPA stood at 0.29% and 0.09% respectively as of 31.03.11, clearly one of the best in the industry. The company proposed a higher dividend of 15% for the year as against 10% during the previous year.

- Sundaram Asset Management Company Limited

Sundaram BNP Paribas Asset Management Company Limited and Sundaram BNP Paribas Trustee Company Limited became wholly owned subsidiaries of your company from October 2010, consequent to the acquisition of 49.90% equity shares held by the joint venture partner, BNP Paribas Asset Management, France in these companies. The names of the companies were thereafter changed to Sundaram Asset Management Company Limited and Sundaram Trustee Company Limited respectively.

The Average Assets under Management (AUM) of Sundaram Asset Management Company Ltd. were Rs. 13946 cr. for the year 2010-11 as compared to Rs. 13878 cr. in the previous year. The investor base of Sundaram Asset Management Company Limited stands at 2.22 million.

Sundaram Asset Management Company Limited earned a gross income ofRs. 122.40 cr. as against Rs. 111.83 cr. in the previous year. Reflecting the volatility in the stock market and several regulatory changes, the company reported a profit after tax ofRs. 13.36 cr. as against Rs. 20.84 cr. in the previous year. The company recommended a dividend of 25% for the year as against 40% during the previous year.

- Sundaram Trustee Company Limited

Sundaram Trustee Company Limited earned a gross income of Rs. 129.18 lakhs as against Rs. 124.10 lakhs in the previous year and reported a profit after tax of Rs. 40.90 lakhs for the year, as against Rs. 42.15 lakhs in the previous year. The company recommended a higher dividend of 800% for the year as against 600% during the previous year.

- Sundaram Finance Distribution Limited (SFDL)

SFDLs income from operations at Rs. 7.79 cr. (PY Rs. 5.61 cr) grew by 39% over the previous year. During the year, SFDL divested its holdings in Credit Analysis and Research Limited (CARE), resulting in a profit of Rs. 50.15 cr. (net of tax outgo). Consequently, the profit after tax for the year was higher at Rs. 54.33 cr as against Rs. 1.97 cr. in the previous year.

During February 2011, SFDL paid a Special Interim Dividend of 7770% which was treated as final dividend for the year as against 225% paid during the previous year.

- LGF Services Limited

During the year, LGF Services Limited earned an income from operations of Rs. 4.95 cr. as against Rs. 5.59 cr. in the previous year. The profit after tax for the year was higher at Rs. 1.92 cr. as against Rs. 1.83 cr. in the previous year. The company recommended a dividend of 500% for the year, in line with the previous year.

- Sundaram Infotech Solutions Limited

The company earned a gross income of Rs. 21.22 cr, as against Rs. 18.82 cr. in the previous year. The profit after tax for the year was at Rs. 0.83 cr. as against Rs. 1.31 cr. in the previous year.

- Sundaram Business Services Limited (SBSL)

During the year, SBSL earned a gross income of Rs. 22.82 cr, as against Rs. 19.91 cr. in the previous year. The company reported

a loss of Rs. 1.51 cr. as against Rs. 3.11 cr. in the previous year. The company remains focused on the Banking, Financial Services and Insurance segments and the Accounting and Payroll horizontals. The company has embarked on further business development efforts in Australia and expects to make further progress during 2011-12.

- Professional Management Consultants Limited (PMC)

During the year, PMC earned a gross income of Rs. 4.83 cr. as against Rs. 4.87 cr. in the previous year. The company enforced strict cost control which resulted in profit of Rs. 2.38 lakhs as against loss of Rs. 68.98 lakhs in the previous year. The company has stepped up its business development efforts and expects to make further progress during the year 2011-12.

- Sundaram BNP Paribas Fund Services Limited

Sundaram BNP Paribas Fund Services Limited successfully completed the process of migration in relation to a few schemes of Sundaram Asset Management Company Limited from its existing service provider and the operations in respect of those schemes went live with effect from 6th December 2010. The company handled 24 New Fund Offers aggregating to Rs. 1755.21 cr. from 32,436 investors. The company earned an income of Rs. 3.66 cr. during the year as against Rs. 1.13 cr. for the period ended October 2009 to March 2010. The company is servicing 92 schemes amounting to Rs. 3393 cr. in assets. The company reported a loss of Rs. 17.02 cr. during the year as against Rs. 2.22 cr. for the period ended October 2009 to March 2010.

- Infreight Logistics Solutions Limited (Infreight)

During the year, Infreight earned a gross income of Rs. 19.16 cr. as against Rs. 17.26 cr. in the previous year. The company continued its efforts to streamline its business operations to further increase the productivity and reduce operating loss. The efforts yielded satisfactory results. Loss for the year was at Rs. 1.27 cr. as against Rs. 2.07 cr. in the previous year.

The company has since transitioned contracts relating to select transportation clients for a consideration of Rs. 4.75 cr, which was used for settling a major portion of their borrowings which

would reduce the interest burden and strengthen the financials of the company.

- Sundaram Parekh Warehousing Services Limited Sundaram Parekh Warehousing Services Limited was incorporated in August 2010 by Infreight Logistics Solutions Limited as its subsidiary with 51% shareholding and Parekh Integrated Services Pvt. Ltd., holding the balance with the objective of providing full fledged high-end warehousing services across the country. Parekh Integrated Services Pvt. Ltd. is one of the largest distribution and logistics company catering to specialised industry like pharmaceuticals, which will make available its expertise in operating warehousing facilities across the country. The company proposes to take on lease warehousing facilities at different locations and is expected to become operational during the financial year 2011-12.

- Sundaram Insurance Broking Services Limited

Sundaram Insurance Broking Services Limited was incorporated as a subsidiary of your Company on 15th November 2010 to provide insurance broking services. The company is yet to commence its operations.

JOINT VENTURES

- Royal Sundaram Alliance Insurance Company Ltd (Royal Sundaram)

Royal Sundaram posted a top-line growth of 25 percent with a Gross Written Premium (GWP) of Rs. 1143.99 cr, during the year, as compared to the GWP of Rs. 913.11 cr, in the previous year. The Company has also recorded a healthy Profit before Tax (before motor pool loss) of Rs. 60.93 cr, registering a growth of 18 percent over the last year.

However, in March 2011 IRDA announced a steep increase in loss ratios for the third party motor pool, requiring the company to make a higher provision of Rs. 75.81 cr. for the year, as against Rs. 17.67 cr, in the previous year. Hence, after making provision for tax and motor pool losses, the company reported a loss of Rs. 20.14 cr. for the year as against profit of Rs. 30.97 cr. in the previous year.

Your Company has been receiving enquiries regarding its continuance in the general insurance business and its investment in Royal Sundaram Insurance Company. Your Company wishes to clarify that while preliminary discussions had taken place in connection with a potential divestment, no further progress has been made, in view of the lack of clarity on the regulatory front, regarding mergers and acquisitions.

- BNP Paribas Sundaram Global Securities Operations Private Limited

BNP Paribas Sundaram Global Securities Operations Private Limited earned gross income of Rs. 54.38 cr. during the year as against Rs. 24.75 cr. for the six months ended March 2010. The company reported a profit after tax of Rs. 6.42 cr. during the year as against Rs. 4.31 cr. for the six months ended March 2010. The company recommended a dividend of 67% for the year ended 31st March 2011 as against 44% for the six months ended 31st March 2010.

DIRECTORS

Sri S Narayanan, a Director of your Company, retired from the Board on 24th September 2010. Your directors place on record the sterling contribution made by him to the growth and development of your Company through his wealth of knowledge and experience during his long tenure of over 24 years as a Director of your Company.

Sri N Venkataramani and Sri P N Venkatachalam were co-opted as independent directors during the year. Sri Harsha Viji was co-opted as additional director and appointed as Director (Strategy & Planning) with effect from 24th September 2010.

Sri Srinivas Acharya and Sri S Ravindran retire by rotation and, being eligible, offer themselves for re-election. Sri T R Seshadri, Director, who retires by rotation has not offered himself for re-election. Your directors place on record the immense contribution made by him to the growth and development of your Company through his rich experience and expertise in financial sector during his tenure of 16 years as a Director of your Company. The Board recommends that the vacancy caused by his retirement not be filled.

Sri N Venkataramani, Sri P N Venkatachalam and Sri Harsha Viji hold office as Additional Directors up to the date of the ensuing Annual General Meeting. The Company has received due notices from some members, proposing their appointment as directors of the Company.

AUDITORS

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

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

Your Company has no activity relating to conservation of energy or technology absorption. During 2010-11, expenditure in foreign currencies amounted to Rs. 16.94 lakhs on account of other charges. Foreign Currency earnings amounted to Rs. 68.41 lakhs.

PERSONNEL

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

SUNDARAM FINANCE EMPLOYEE STOCK OPTION SCHEME

Your Board of Directors, based on the recommendations of the Compensation Committee, granted 16,500 stock options to its eligible employees, on 30.05.2011. The disclosure required under SEBI Guidelines, in this regard, is furnished in the Annexure.

DIRECTORS RESPONSIBILITY STATEMENT

Your directors confirm that:

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

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

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

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

CORPORATE SOCIAL RESPONSIBILITY

The Sundaram Finance Group is involved in a number of community focused activities that exemplify its strong commitment to society at large. Some of the major initiatives that the Group is involved in, are in the areas of health, education and promotion of the countrys rich culture and heritage.

Healthcare

Your Company has been deeply involved with the Sundaram Medical Foundation, a non-profit Trust that runs the Dr. Rangarajan Memorial Hospital, since its inception. The hospital occupies an eminent position in the healthcare sector of India as a model of cost-conscious, affordable, healthcare delivery and corporate involvement in social projects. For the past 14 years, the Group has also been associated with the Hindu Mission Hospital in Tambaram, Chennai that caters to the medical needs of under served rural communities. Cancer, schizophrenia, kidney and ophthalmic care are some of the other health care causes that the Group supports through organisations such as the Cancer Institute, Cancer Relief Society, Schizophrenia Research Foundation, Tanker Foundation and Sankara Nethralaya.

Education

Foremost among the many causes that the Group is involved with, in the field of education, is Laxmi Charities, established 37 years ago. A charitable educational institution, it assists meritorious students from the lower income groups to pursue higher education. Over the nearly four decades of its existence, this institution has assisted over 34000 deserving and needy scholars in pursuing their careers. The Group has also been actively supporting several schools, colleges, Universities and NGOs involved in primary education.

Environment, Heritage, Culture and Sports

The Group is also involved in a wide spectrum of activities ranging from the upkeep and maintenance of a public park in the heart of Chennai, ecology awareness campaigns, to a host of activities aimed at encouraging childrens participation in art and craft, music and personality development, through year round programmes. The Group is also closely involved with a popular annual festival that showcases folk art, music and dance, again with emphasis on children and an All-India Veterans Tennis tournament.

ACKNOWLEDGEMENT

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

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

For and on behalf of the Board

S VIJI Chairman

Chennai 600 002 30th May 2011


Mar 31, 2010

The directors have pleasure in presenting the 57th Annual Report with audited accounts for the year ended 31st March 2010. The summarised financial results of the Company are given hereunder:

FINANCIAL RESULTS:

(Rs. in Cr.)

Particulars Year ended Year ended March 31, 2010 March 31, 2009

Income from Operations 1181.89 1082.78

profit on Sale of Shares in WABCO-TVS (INDIA) Limited 25.39 --

Other Income 41.43 31.99

Total Income 1248.71 1114.77

Less: Total Expenditure 925.23 895.06

profit before Tax 323.48 219.71

profit after Tax 226.75 150.73

Surplus brought forward 41.96 47.14

Transfer from Special Reserve 76.00 --

Amount available for appropriation 344.71 197.87

Appropriations have been made as under: Transfers to:

– Statutory Reserve 45.40 30.20

– Special Reserve -- 2.00

– General Reserve 175.00 82.72

Dividend – Interim 33.33 22.22

Final (Proposed) 22.22 13.89

Dividend Tax 7.74 4.87

Surplus carried to balance sheet 61.02 41.97

344.71 197.87

DIVIDEND

Your Company paid a tax-free interim dividend of Rs.6/- per share (60% on the face value of Rs.10/-). Your directors are now pleased to recommend a fnal dividend of Rs.4/- per share (40% on the face value of Rs.10/-). This, together with the interim dividend, aggregates to a total dividend of Rs.10/- per share (100% on the face value of Rs.10/-) for the financial year ended 31st March 2010, on the paid-up capital of Rs.55.55 cr.

CORPORATE GOVERNANCE

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

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

The term of offce of Sri Srinivas Acharya as Deputy Managing Director expired on 31 st March 2010. Your Directors wish to place on record the valuable contribution made by him for the growth and development of your Company during his tenure as Deputy Managing Director. Sri Acharya continues as a Director on the Board.

Sri A. Rangaswami, a Director of your Company since 1995, resigned his directorship effective 1 st April 2 010. He was the Chairman of the Audit Committee and Share Transfer & Investor Relations Committee. Your directors place on record the significant contribution made by him to the deliberations of the Board and Audit Committee for over a decade. His association with the Sundaram Finance group spanned over fve decades and his invaluable wisdom and guidance will be missed.

Consequent to the resignation of Sri A. Rangaswami, Sri S Prasad, an independent director of your Company, was appointed as Chairman of the Audit Committee and Share Transfer & Investor Relations

Committee and Sri Srinivas Acharya was appointed as a member of the Share Transfer & Investor Relations Committee effective 1st April 2010.

Sri S. Viji, Sri S. Ram and Sri T. T. Srinivasaraghavan retire by rotation and, being eligible, offer themselves for re-election. Necessary resolutions are submitted for your approval.

AUDITORS

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

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

Your Company has no activity relating to conservation of energy or technology absorption. During 2009-10, expenditure in foreign currencies amounted to Rs.145.04 lakhs, on account of interest and other charges. Foreign Currency earnings amounted to Rs. 94.78 lakhs.

PERSONNEL

In accordance with the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors’ Report is being sent to all the shareholders of the Company excluding the annexure prescribed under Section 217(2A) of the Companies Act. The said annexure, setting out the names and other particulars of employees, is available for inspection by the Members at the Registered Offce of the Company during offce hours till the date of the Annual General Meeting.

SUNDARAM FINANCE EMPLOYEE STOCK OPTION SCHEME

Your Board of Directors, based on the recommendations of the Compensation Committee, granted 17,250 stock options to its eligible employees, on 28.05.2010. The disclosure required under SEBI Guidelines, in this regard, is furnished in the Annexure.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your directors confrm that:

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

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

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

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

ACKNOWLEDGEMENT

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

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

For and on behalf of the Board

Chennai 600 002 S VIJI

28th May 2010 Chairman


Mar 31, 2010

The Directors present the Sixteenth Annual Report and Audited Accounts for the year ended 31st March, 2010.

Financial Results (Rs. in Lakhs)

Particulars Year ended Year ended 31.03.2010 31.03.2009

Profit after tax 196.60 137.08

Add: Surplus of Previous Year 119.46 124.38

Amount available for

appropriation 316.06 261.46

Transfer to General Reserve 20.00 25.00

Interim Dividend - 50.00

Final Dividend 112.50 50.00

Dividend Tax 18.68 17.00

Surplus carried to Balance Sheet 164.87 119.46

Business Review

In spite of signifcant changes in the regulatory guidelines and decline in the number of New Fund Offers by mutual funds, the income from mutual fund distribution has gone up to Rs.158.40 lakhs during 2009-10 from Rs.104.46 lakhs during 2008-09. Despite reduction in insurance premium levels consequent to de-tariffng, your Company has earned a higher commission of Rs.401.22 lakhs through stepped-up efforts in distribution of insurance products during the year as against Rs.228.27 lakhs in the previous year. The Profit after tax for the year amounted to Rs.196.60 lakhs as against Rs.137.08 lakhs in the previous year.

Dividend

Your directors are happy to recommend a higher dividend of Rs. 22.50 per share for the fnancial year 2009-10 on the paid-up capital of Rs.50.00 lakhs comprising 5,00,000 equity shares of Rs.10/- each. The dividend together with dividend tax of Rs.18.68 lakhs absorbs a sum of Rs.131.18 lakhs.

Directors

Sri Sankara Kumar, Director, retires by rotation and being eligible offers himself for re-election. Necessary resolution is submitted for your approval.

Directors Responsibility Statement

Your directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

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

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

iv) they have prepared the annual accounts on a going-concern basis.

Secretarial Compliance Certificate

In accordance with Section 383A of the Companies Act, 1956, the Secretarial Compliance Certifcate is attached with this report.

Information as per section 217(1)(e) of the Companies act, 1956

Your Company has no activity relating to conservation of energy or technology absorption. Your Company did not have any foreign exchange earnings or outgo during the year.

Personnel

None of the employees of the Company is in receipt of remuneration in excess of limits prescribed under Section 217(2A) of the Companies Act, 1956.

Deposits

Your Company has not accepted any public deposit during the period under review.

Auditors

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

Acknowledgement

Your Directors thank the holding company, Sundaram Finance Ltd for its support. Your Directors also wish to place on record their appreciation of the contribution made by the management team and the employees at all levels.

S Venkatesan

A N Raju

Chennai 600 002 K Sankarakumar

Date : 13th May 2010 Directors


Mar 31, 2010

The Directors present the Sixteenth Annual Report and Audited Accounts for the year ended 31st March, 2010.

Financial Results (Rs. in Lakhs)

Particulars Year ended Year ended 31.03.2010 31.03.2009

Profit after tax 196.60 137.08

Add: Surplus of Previous Year 119.46 124.38

Amount available for

appropriation 316.06 261.46

Transfer to General Reserve 20.00 25.00

Interim Dividend - 50.00

Final Dividend 112.50 50.00

Dividend Tax 18.68 17.00

Surplus carried to Balance Sheet 164.87 119.46

Business Review

In spite of signifcant changes in the regulatory guidelines and decline in the number of New Fund Offers by mutual funds, the income from mutual fund distribution has gone up to Rs.158.40 lakhs during 2009-10 from Rs.104.46 lakhs during 2008-09. Despite reduction in insurance premium levels consequent to de-tariffng, your Company has earned a higher commission of Rs.401.22 lakhs through stepped-up efforts in distribution of insurance products during the year as against Rs.228.27 lakhs in the previous year. The Profit after tax for the year amounted to Rs.196.60 lakhs as against Rs.137.08 lakhs in the previous year.

Dividend

Your directors are happy to recommend a higher dividend of Rs. 22.50 per share for the fnancial year 2009-10 on the paid-up capital of Rs.50.00 lakhs comprising 5,00,000 equity shares of Rs.10/- each. The dividend together with dividend tax of Rs.18.68 lakhs absorbs a sum of Rs.131.18 lakhs.

Directors

Sri Sankara Kumar, Director, retires by rotation and being eligible offers himself for re-election. Necessary resolution is submitted for your approval.

Directors Responsibility Statement

Your directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

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

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

iv) they have prepared the annual accounts on a going-concern basis.

Secretarial Compliance Certificate

In accordance with Section 383A of the Companies Act, 1956, the Secretarial Compliance Certifcate is attached with this report.

Information as per section 217(1)(e) of the Companies act, 1956

Your Company has no activity relating to conservation of energy or technology absorption. Your Company did not have any foreign exchange earnings or outgo during the year.

Personnel

None of the employees of the Company is in receipt of remuneration in excess of limits prescribed under Section 217(2A) of the Companies Act, 1956.

Deposits

Your Company has not accepted any public deposit during the period under review.

Auditors

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

Acknowledgement

Your Directors thank the holding company, Sundaram Finance Ltd for its support. Your Directors also wish to place on record their appreciation of the contribution made by the management team and the employees at all levels.

S Venkatesan

A N Raju

Chennai 600 002 K Sankarakumar

Date : 13th May 2010 Directors


Mar 31, 2009

The Directors present the Fifteenth Annual Report and Audited Accounts for the year ended 31st March, 2009.

FinAnCiAl Results

(Rs. in Lakhs)

Particulars Year ended Year ended 31.03.2009 31.03.2008

Proft after tax 137.08 167.82

Add: Surplus of Previous Year 124.38 90.55

Amount available for 261.46 258.37

appropriation

Transfer to General Reserve 25.00 17.00

Interim Dividend 50.00 -

Final Dividend 50.00 100.00

Dividend Tax 17.00 17.00

Surplus carried to Balance Sheet 119.46 124.37

Business Review

Due to decline in New Fund Offers (NFOs) by mutual funds consequent to tightening liquidity and slowdown in stock markets, your company’s income through distribution of various mutual fund and fnancial products was lower at Rs.104.46 lakhs as against Rs.281.58 lakhs in the previous year. However, despite reduction in insurance premium levels consequent to detariffng, your Company earned a higher commission of Rs.228.27 lakhs through stepped- up efforts in distribution of insurance products during the year as against Rs. 82.38 lakhs in the previous year. The proft after tax for the year amounted to Rs.137.08 lakhs as against Rs.167.82 lakhs in the previous year.

DIVIDEND

Your Company paid a interim dividend of Rs.10/- per share on 3rd March 2009. Your directors are now pleased to recommend a fnal dividend of Rs.10/- per share. This, together with the interim dividend, aggregates to a total dividend of Rs.20/- per share for the financial year ended 31st March 2009, on the paid-up capital of Rs.50 lakhs comprising 5,00,000 equity shares of Rs.10/- each.

DIRECTORS

Sri A. N. Raju, Director, retires by rotation and being eligible offers himself for re-election. Necessary resolution is submitted for your approval.

DIRECTORS RESPONSIBILITY STATEMENTYour directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

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

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

iv) they have prepared the annual accounts on a going-concern basis.

SECRETARIAL COMPLIANCE CERTIFICATE

In accordance with Section 383A of the Companies Act, 1956, the Secretarial Compliance Certificate is attached with this report.

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

Your Company has no activity relating to conservation of energy or technology absorption. Your Company did not have any foreign exchange earnings or outgo during the year.

PERSONNEL

Your Company has no employees on its payroll. The provisions of Section 217(2A) of the Companies Act, 1956 are not applicable.

DEPOSITS

Your Company has not accepted any public deposit during the period under review.

AUDITORS

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

ACKNOWLEDGEMENT

Your Directors thank the holding company, Sundaram Finance Ltd for its support.

S Venkatesan A N Raju

Chennai 600 002 K Sankarakumar

Date : 15th May 2009 Directors


Mar 31, 2009

The Directors present the Fifteenth Annual Report and Audited Accounts for the year ended 31st March, 2009.

FinAnCiAl Results

(Rs. in Lakhs)

Particulars Year ended Year ended 31.03.2009 31.03.2008

Proft after tax 137.08 167.82

Add: Surplus of Previous Year 124.38 90.55

Amount available for 261.46 258.37

appropriation

Transfer to General Reserve 25.00 17.00

Interim Dividend 50.00 -

Final Dividend 50.00 100.00

Dividend Tax 17.00 17.00

Surplus carried to Balance Sheet 119.46 124.37

Business Review

Due to decline in New Fund Offers (NFOs) by mutual funds consequent to tightening liquidity and slowdown in stock markets, your company’s income through distribution of various mutual fund and fnancial products was lower at Rs.104.46 lakhs as against Rs.281.58 lakhs in the previous year. However, despite reduction in insurance premium levels consequent to detariffng, your Company earned a higher commission of Rs.228.27 lakhs through stepped- up efforts in distribution of insurance products during the year as against Rs. 82.38 lakhs in the previous year. The proft after tax for the year amounted to Rs.137.08 lakhs as against Rs.167.82 lakhs in the previous year.

DIVIDEND

Your Company paid a interim dividend of Rs.10/- per share on 3rd March 2009. Your directors are now pleased to recommend a fnal dividend of Rs.10/- per share. This, together with the interim dividend, aggregates to a total dividend of Rs.20/- per share for the financial year ended 31st March 2009, on the paid-up capital of Rs.50 lakhs comprising 5,00,000 equity shares of Rs.10/- each.

DIRECTORS

Sri A. N. Raju, Director, retires by rotation and being eligible offers himself for re-election. Necessary resolution is submitted for your approval.

DIRECTORS RESPONSIBILITY STATEMENTYour directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

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

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

iv) they have prepared the annual accounts on a going-concern basis.

SECRETARIAL COMPLIANCE CERTIFICATE

In accordance with Section 383A of the Companies Act, 1956, the Secretarial Compliance Certificate is attached with this report.

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

Your Company has no activity relating to conservation of energy or technology absorption. Your Company did not have any foreign exchange earnings or outgo during the year.

PERSONNEL

Your Company has no employees on its payroll. The provisions of Section 217(2A) of the Companies Act, 1956 are not applicable.

DEPOSITS

Your Company has not accepted any public deposit during the period under review.

AUDITORS

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

ACKNOWLEDGEMENT

Your Directors thank the holding company, Sundaram Finance Ltd for its support.

S Venkatesan A N Raju

Chennai 600 002 K Sankarakumar

Date : 15th May 2009 Directors


Mar 31, 1998

The Directors have pleasure in presenting their Fourth Annual Report of the Company along with the audited accounts for the year ended 31st March 1998.

Financial Results

Year ended

(Rs. in lakhs)

31.03.1988 31.03.1977

Profit before Depreciation and Tax 8.93 3.05

Less : Depreciation 4.39 0.83

Profit before Tax 4.54 2.22

Less : Provision for Tax 3.50 0.90

Profit after Tax 1.04 1.32

Add : Surplus of previous year 0.67 0.35

Surplus available for appropriation 1.71 1.67

Appropriation :

Transfer to General Reserve 1.00 1.00

Surplus carried forward to Balance Sheet 0.71 0.67

Business Review

The year under review, on the whole, witnessed a fair degree of growth in secondary market operations, despite a few prolonged spells of sluggishness in between. The Company was able to take advantage of this, thanks largely to vigorous marketing efforts this stands reflected in the increase from Rs. 8.57 lakhs to Rs. 21.16 lakhs in brokerage income from a largely retail client base; and this despite the Company's own NSE terminals becoming available only late in January '98, (i.e. for barely 2 months in the year). Good progress was also made during the year in buying / selling PSU / Bank bonds and in rendering advisory / placement services. Consequently, we are glad to report that the Company's operating profit almost trebled to Rs. 8.93 lakhs. Net profit (PAT), however, is marginally lower because of the substantially higher tax outgo.

With the NSE terminal now fully operational, the current year should continue to witness a healthy growth in business volume, provided secondary market conditions remain reasonably steady.

Deposits

`The Company has not accepted any public deposit during the period under review.

Directors

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

Information as per Section 217(1) (e) of The Companies Act, 1956.

The Company has no activity relating to conservation of energy or technology absorption. Neither does the Company have any foreign exchange earnings or outgo.

Personnel

None of the employees of the Company is in receipt of remuneration in excess of limits prescribed under Section 217 (2A) of the Companies Act, 1956.

Auditors

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


Mar 31, 1998

The Directors have pleasure in presenting their Fourth Annual Report of the Company along with the audited accounts for the year ended 31st March 1998.

Financial Results

Year ended

(Rs. in lakhs)

31.03.1988 31.03.1977

Profit before Depreciation and Tax 8.93 3.05

Less : Depreciation 4.39 0.83

Profit before Tax 4.54 2.22

Less : Provision for Tax 3.50 0.90

Profit after Tax 1.04 1.32

Add : Surplus of previous year 0.67 0.35

Surplus available for appropriation 1.71 1.67

Appropriation :

Transfer to General Reserve 1.00 1.00

Surplus carried forward to Balance Sheet 0.71 0.67

Business Review

The year under review, on the whole, witnessed a fair degree of growth in secondary market operations, despite a few prolonged spells of sluggishness in between. The Company was able to take advantage of this, thanks largely to vigorous marketing efforts this stands reflected in the increase from Rs. 8.57 lakhs to Rs. 21.16 lakhs in brokerage income from a largely retail client base; and this despite the Company's own NSE terminals becoming available only late in January '98, (i.e. for barely 2 months in the year). Good progress was also made during the year in buying / selling PSU / Bank bonds and in rendering advisory / placement services. Consequently, we are glad to report that the Company's operating profit almost trebled to Rs. 8.93 lakhs. Net profit (PAT), however, is marginally lower because of the substantially higher tax outgo.

With the NSE terminal now fully operational, the current year should continue to witness a healthy growth in business volume, provided secondary market conditions remain reasonably steady.

Deposits

`The Company has not accepted any public deposit during the period under review.

Directors

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

Information as per Section 217(1) (e) of The Companies Act, 1956.

The Company has no activity relating to conservation of energy or technology absorption. Neither does the Company have any foreign exchange earnings or outgo.

Personnel

None of the employees of the Company is in receipt of remuneration in excess of limits prescribed under Section 217 (2A) of the Companies Act, 1956.

Auditors

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


Mar 31, 1996

SUNDARAM FINANCE SECURITIES LIMITED

TO THE MEMBERS

The Directors present their Second Annual Report of your Company along with the audited accounts for the 15 months period from 1st January '95 to 31st March '96.

It was considered desirable to adopt a 15 month accounting period in order to synchronise its accounting year end with that of the parent company. On the last occasion, your Company's books had to be closed as at 31st December, 1994 because of the need to comply with the provisions of Section 166 of the Companies Act, 1956.

BUSINESS

Your Company's business volume and, consequently, profits during the period under review were affected by highly adverse business conditions both in the primary and secondary markets for the most part of 1995.

With some improvement in the business climate since the beginning of 1996, your Directors feel reasonably confident that the working results for the current year would show improvement aided also by the transfer of membership in OTCEI from the holding company and the acquiring of membership in NSE, currently at an advanced stage.

INFORMATION AS PER SECTION 217 (I)(e) OF THE COMPANIES ACT

The Company has no activity relating to conservation of energy or technology absorption. Neither does your Company have any foreign exchange earnings or outgo.

PERSONNEL

Details as per Sec 217 (2A) is annexed.

AUDITORS

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

ACKNOWLEDGMENT

Your Directors wish to thank the Company's bankers and clients for their co-operation. They also wish to sincerely thank all the employees of the Company for their sincere and dedicated service.


Mar 31, 1996

SUNDARAM FINANCE SECURITIES LIMITED

TO THE MEMBERS

The Directors present their Second Annual Report of your Company along with the audited accounts for the 15 months period from 1st January '95 to 31st March '96.

It was considered desirable to adopt a 15 month accounting period in order to synchronise its accounting year end with that of the parent company. On the last occasion, your Company's books had to be closed as at 31st December, 1994 because of the need to comply with the provisions of Section 166 of the Companies Act, 1956.

BUSINESS

Your Company's business volume and, consequently, profits during the period under review were affected by highly adverse business conditions both in the primary and secondary markets for the most part of 1995.

With some improvement in the business climate since the beginning of 1996, your Directors feel reasonably confident that the working results for the current year would show improvement aided also by the transfer of membership in OTCEI from the holding company and the acquiring of membership in NSE, currently at an advanced stage.

INFORMATION AS PER SECTION 217 (I)(e) OF THE COMPANIES ACT

The Company has no activity relating to conservation of energy or technology absorption. Neither does your Company have any foreign exchange earnings or outgo.

PERSONNEL

Details as per Sec 217 (2A) is annexed.

AUDITORS

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

ACKNOWLEDGMENT

Your Directors wish to thank the Company's bankers and clients for their co-operation. They also wish to sincerely thank all the employees of the Company for their sincere and dedicated service.


Dec 31, 1994

To the Members,

The Directors hereby present their First Annual Report of the Company along with the audited Accounts for the period from 13th October, 1993 being the date of incorporation of the Company, to 31st December 1994.

The Company was incorporated as a private company and has been converted into a public company with effect from 22nd November 1993 by virtue of Section 43A of the Companies Act, 1956.

The paid-up capital of the Company was increased from Rs. 3000 to 50,00,000 during the period.

Dividend

To strengthen the networth of the Company, your Directors recommend the ploughback of the entire profits available for appropriation to the reserves.

Reserves

Your Directors propose to transfer Rs. 5.00 Lakhs to General Reserves and carry forward a surplus of Rs. 0.21 Lakhs.

Business

Your Company has been admitted as a Corporate Member of the Madras Stock Exchange Ltd. on conversion and after obtaining the approval of the Securities Exchange Board of India, commenced trading on the floor of the Exchange from May 1994.

Your Company under Stock Broking wrote business of Rs. 1326.79 Lakhs and earned an income of Rs. 16.41 Lakhs during the period.

Deposits

Your Company has not accepted any deposit during the period from the public.

Directors

Shri P.S.V. Chari and Shri M.A. Sathyavasu have relinquished the Directorship during the period. The Directors wish to place on record their appreciation for the services rendered during their tenure.

Shri S. Viji, Shri. T. Ramabhadran, Shri. C. R. Vijayaraghavan and Ms. Chitra Parthasarthy were co-opted as additional Directors of the Company during the period and appointed as Directors in the Extraordinary General Meeting held during the year.

Shri S. Venkatesan, was appointed as Additional Director on 8th April, 1995. He shall hold office up to the date of the ensuing Annual General Meeting. The Company has received due notice from a member proposing his appointment as a Director of the Company.

Shri R. Natarajan one of the first Directors of the Company was appointed as whole-time Director under the designation Director (Operations) with effect from 11th March, 1994.

Shri T. Ramabhadran and Shri C.R. Vijayaraghavan retire by rotation and being eligible, offer themselves for re-election.

Information as per Section 217 (1) (e) of the Companies Act, 1956

The Company has no activity relating to conservation of energy or technology absorption. The Company does not have any foreign exchange earnings or outgo.

Personnel

None of the employees of the Company except the Director (Operations) is in receipt of remuneration in excess of the limits prescribed under Section 217 (2A) of the Companies Act, 1956.

Auditors

M/s Brahmayya & Co., Chartered Accountants, Madras, were appointed as the first Auditors of the Company, whose term of office expires at the ensuing Annual General Meeting. They being eligible, offer themselves for re-appointment. A certificate under Section 224 (1 -B) of the Companies Act, 1956 has been obtained from them.

Acknowledgement

Your Directors wish to thank the Company's bankers for their co-operation. Your Directors also wish to thank the clients and place on record the appreciation of the good work done by all the employees of the Company.


Dec 31, 1994

To the Members,

The Directors hereby present their First Annual Report of the Company along with the audited Accounts for the period from 13th October, 1993 being the date of incorporation of the Company, to 31st December 1994.

The Company was incorporated as a private company and has been converted into a public company with effect from 22nd November 1993 by virtue of Section 43A of the Companies Act, 1956.

The paid-up capital of the Company was increased from Rs. 3000 to 50,00,000 during the period.

Dividend

To strengthen the networth of the Company, your Directors recommend the ploughback of the entire profits available for appropriation to the reserves.

Reserves

Your Directors propose to transfer Rs. 5.00 Lakhs to General Reserves and carry forward a surplus of Rs. 0.21 Lakhs.

Business

Your Company has been admitted as a Corporate Member of the Madras Stock Exchange Ltd. on conversion and after obtaining the approval of the Securities Exchange Board of India, commenced trading on the floor of the Exchange from May 1994.

Your Company under Stock Broking wrote business of Rs. 1326.79 Lakhs and earned an income of Rs. 16.41 Lakhs during the period.

Deposits

Your Company has not accepted any deposit during the period from the public.

Directors

Shri P.S.V. Chari and Shri M.A. Sathyavasu have relinquished the Directorship during the period. The Directors wish to place on record their appreciation for the services rendered during their tenure.

Shri S. Viji, Shri. T. Ramabhadran, Shri. C. R. Vijayaraghavan and Ms. Chitra Parthasarthy were co-opted as additional Directors of the Company during the period and appointed as Directors in the Extraordinary General Meeting held during the year.

Shri S. Venkatesan, was appointed as Additional Director on 8th April, 1995. He shall hold office up to the date of the ensuing Annual General Meeting. The Company has received due notice from a member proposing his appointment as a Director of the Company.

Shri R. Natarajan one of the first Directors of the Company was appointed as whole-time Director under the designation Director (Operations) with effect from 11th March, 1994.

Shri T. Ramabhadran and Shri C.R. Vijayaraghavan retire by rotation and being eligible, offer themselves for re-election.

Information as per Section 217 (1) (e) of the Companies Act, 1956

The Company has no activity relating to conservation of energy or technology absorption. The Company does not have any foreign exchange earnings or outgo.

Personnel

None of the employees of the Company except the Director (Operations) is in receipt of remuneration in excess of the limits prescribed under Section 217 (2A) of the Companies Act, 1956.

Auditors

M/s Brahmayya & Co., Chartered Accountants, Madras, were appointed as the first Auditors of the Company, whose term of office expires at the ensuing Annual General Meeting. They being eligible, offer themselves for re-appointment. A certificate under Section 224 (1 -B) of the Companies Act, 1956 has been obtained from them.

Acknowledgement

Your Directors wish to thank the Company's bankers for their co-operation. Your Directors also wish to thank the clients and place on record the appreciation of the good work done by all the employees of the Company.

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