Directors Report of TVS Holdings Ltd.

Mar 31, 2025

The Directors have the pleasure in presenting the 63^rd annual report and the audited accounts of the Company for the financial year ended 31^st March 2025 (''financial year under review'' or ''review period'').

1. COMPANY OVERVIEW

TVS Holdings Limited (''TVSHL'' or ''the Company'') is registered as a Core Investment Company ("CIC") pursuant to the Certificate of Registration No N-07-00904 dated 14^th March, 2024 issued by the Reserve Bank of India (''RBI'') under Section 45-IA of the Reserve Bank of India Act, 1934 and Master Direction - Core Investment Companies (Reserve Bank) Directions 2016 as amended ("RBI Master Directions") to carry on the business of NBFC-CIC without accepting public deposits.

The RBI vide its notification dated October 22, 2021, had introduced an integrated regulatory framework for NBFCs under "Scale Based Regulation (''SBR''), a Revised Regulatory Framework for NBFCs". The SBR framework encompasses different facets of regulation of NBFCs covering capital requirements, governance standards, prudential regulation, etc. Under the SBR framework, NBFCs are divided into four layers viz., top layer, upper layer, middle layer and base layer based on the size, activity and perceived riskiness. The Company being CIC falls under the category of Middle Layer NBFC (''NBFC-ML'').

The key updates during the period under review from the regulatory compliance perspective are provided below:

(a) Amendments to the Memorandum of Association (MoA) of the Company

RBI had stipulated certain conditions upon grant of registration to the Company as a CIC which inter-alia included, winding up trading in automotive spare parts by April 2025. Accordingly, during the financial year 2024-25, the Company had discontinued the aforementioned activity.

Further, Clause III - Object clause of the MoA of the Company contained primarily the description of objects carried out by the Company prior to the Demerger of its manufacturing division. During the financial year under review, Clause III -Object clause of the MoA has been substituted and replaced as Clause 3 (a) with new objects reflecting only the activities of a Core Investment Company and removed all clauses in relation to its erstwhile manufacturing and related businesses.

(b) Adoption of Memorandum of Association and Articles of Association as per the provisions of Companies Act, 2013.

The erstwhile Memorandum of Association (MoA) and Articles of Association (AoA) of the Company were initially adopted in accordance with the Companies Act, 1956 and amended as necessary from time to time. The Companies Act, 2013 introduced a new format for the MoA and AoA for companies limited by shares, as outlined in Table A and Table F, respectively of Schedule I. To comply with the Companies Act, 2013, the Company has substituted and replaced its MoA and AoA during the financial year under review.

(c) Change in Corporate Identification Number (CIN) of the Company issued by Ministry of Corporate Affairs (MCA)

Post the amendments to the Memorandum of Association (MoA) of the Company on October 15, 2024, which included changes to the main objects to reflect the activities of CIC, the Company filed the necessary forms with the Ministry of Corporate Affairs (MCA) to register the change in the object clause of the MoA and received necessary approval for the changes.

Subsequent to the change in the main object, the Corporate Identification Number (CIN) of the Company has been updated to L64200TN1962PLC004792 to reflect the updated business activity code related to its operations as a CIC.

(d) Promoter reclassification

During the period under review, the Company had submitted an application to BSE Limited and the National Stock Exchange of India Limited (collectively, the "Stock Exchanges") for the reclassification of T.V. Sundram Iyengar & Sons Private Limited ("Outgoing Promoter") from the "Promoter" category to the "Public" category under Regulation 31A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations'').

On November 29, 2024, approvals from the Stock Exchanges were received by the Company for this reclassification. Consequently, T.V. Sundram Iyengar & Sons Private Limited has been reclassified from the "Promoter" category to the "Public" category based on the approval received from the Stock Exchanges.

2. FINANCIAL SUMMARY AND HIGHLIGHTS		($ in Cr)
	Standalone	Consolidated
Particulars	Year ended 31.03.2025	Year ended 31.03.2025
Revenue from Operations	637.30	44,993.16
Other Income Profit / (loss) before Depreciation	6.75 412.53	39.69 4,682.97
Less: Depreciation / Amortization / Impairment	2.44	1,066.85
Profit / (loss) before Exceptional items and Tax Expense	410.09	3,616.12
Add / (less): Exceptional items	-	-
Profit / (loss) before Tax Expense	410.09	3,616.12
Less: Tax Expense (Current & Deferred)	57.93	1,206.87
Profit for the year	352.16	2,409.25
Other Comprehensive Income / (loss)	(2.43)	49.05
Total Comprehensive Income	349.73	2,458.30

Note:

• 2023-24 financials included income from Trading business for the

whole year and Die casting business upto 10^th August, 2023 pursuant to demerger and giving effect to Composite Scheme of Arrangement amongst the Company and TVS Holdings Private Limited and VS Investments Private Limited and Sundaram-Clayton Limited (Formerly known as Sundaram-Clayton DCD Limited) and their respective shareholders and creditors as approved by the Hon''ble National Company Law Tribunal, Chennai Bench vide its Order dated 6^th March, 2023 and hence not comparable with the current year.

3. COMPANY PERFORMANCE

The Company has been essentially a holding and investment company and does not have any other operations of its own. The Company''s revenue primarily comprises of dividend income from investments held in group companies. RBI had stipulated certain conditions upon grant of registration to the Company as a CIC which included, inter-alia, winding up of trading in automotive spare parts business by April 2025. The Company has wound up its business of trading in automotive spare parts in compliance with the aforesaid condition stipulated by the RBI effective 10^th October, 2024.

More details about the Company and its investments are dealt in the subsequent sections of the report.

4. DIVIDEND

The Board of Directors of the Company (the Board) declared an interim dividend of $ 93/- per share (1,860%) on 2,02,32,104 equity shares of $5/- each for the year FY25 absorbing a sum of $188 Cr on 24^th March, 2025. The same was paid on 17^th April, 2025.

The Board does not recommend any further dividend for the year 2024-25 under consideration. The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy approved by the Board and in accordance with the Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016 (as amended from time to time).

5. TRANSFER TO RESERVES

For the financial year ended 31^st March, 2025 an amount of $ 70.43 Cr was transferred to Statutory Reserve in terms of Section 45-IC of the Reserve Bank of India Act, 1934.

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT ECONOMY OVERVIEW

India''s economy to expand 6.5% in fiscal 2025, outpacing global peers

A resurgence in rural demand, fuelled by improved agricultural prospects, is expected to have driven private consumption and boosted India''s economic growth in fiscal 2025. Services activity is likely to have remained stable.

The National Statistical Office (NSO) and the International Monetary Fund (IMF) have projected a 6.5% growth in India''s gross domestic product (GDP) in fiscal 2025, with the latter forecasting India to remain one of the fastest-growing economies.

According to NSO, India''s real gross value added (GVA) grew 6.4% in fiscal 2025, compared with 8.6% in fiscal 2024. The financial, real estate and professional services sector maintained a dominant share in terms of sectoral composition of nominal GVA, growing 7.2% in fiscal 2025.

One of the key drivers of growth in fiscal 2025 was softer headline consumer price inflation, which is estimated to have declined to 4.7% from 5.4% in fiscal 2024, owing to lower food inflation. However, edible oils became a concern in the latter part of the fiscal, impacted by high global prices, import duties and a weaker currency.

In fiscal 2026, it is forecasted that India''s GDP would hold steady at 6.5%, assuming normal monsoon and stable commodity prices. Private consumption is expected to continue its recovery, while investment growth will depend on private sector capital expenditure (capex). However, the growth pickup is expected to be moderate due to a lower fiscal stimulus.

Note: *Data is presented on a fiscal year basis (April 2024 - March 2025). Source: IMF World Economic Outlook January 2025, Crisil Intelligence

GDP growth to normalize 6.5% in fiscal 2026

Private consumption is expected to improve further on expectation of healthy agricultural production and cooling food inflation. Softer food inflation should allow discretionary spending.

Additionally, some easing in the Reserve Bank of India''s (RBI) monetary policy is expected to support discretionary consumption. In February 2025, the RBI cut its policy rates by 25 basis points (bps)-its first since May 2020-prompted by easing inflation and slowing economic growth. This was followed by a further 25 bps cut in April 2025, bringing the repo rate down to 6.00%. The Monetary Policy Committee (MPC) shifted its stance from neutral to accommodative, citing benign inflation prospects and moderate demand growth. However, it remains cautious about the challenging global economic landscape, emphasizing the need for continuous monitoring and assessment, as well as proactive use of liquidity management tools to mitigate the impact of global market volatility.

Tariff hikes have also increased the uncertainty of the US Federal Reserve''s monetary policy path, which could keep financial

conditions volatile. Tariffs have added upside risks to inflation and downside risks to growth in the US. On domestic front, in line with the accommodative stance by the MPC, two more rate cuts of 25 bps each are expected in fiscal 2026.

The Central Bank''s recent measures to improve liquidity and relax regulations for non-banking financial companies or NBFCs (reversal of the 25% increase in risk weight on banks'' exposure to NBFCs) are expected to facilitate the transmission of the benefits of easier monetary policy to the broader economy.

India''s growth rate is normalising towards its medium-term trend. Growth in fiscal 2026 will be supported by the following factors:

• The Government''s capex is budgeted at 3.1% of GDP at $ 11.2 lakh crore, up 10% from $ 10.2 lakh crore in fiscal 2025

• Healthy domestic consumption, particularly in fast-moving consumer goods, consumer durables and two-wheelers

• The Government has reduced the income tax rates under the new tax regime, potentially increasing disposable income in the hands of the middle class. Tax slabs have also been revised, potentially reducing the tax burden across income levels

• The policy rate cuts by the RBI are expected to mildly support consumption, as these will gradually get transmitted to other interest rates in the economy, thus lowering borrowing costs

• Along with measures to spur consumption in the short term, the Union Budget 2025-26 also looks to improve employment and skilling, which will help boost permanent incomes and consumption in the medium-to-long term.

Overview of the Two-wheeler industry

The two-wheeler industry, comprising motorcycles, scooters, mopeds, and electric vehicles (EVs), recorded an estimated 7-9% growth in sales in Fiscal 2025, reaching approximately 20 million units, which is 94% of the pre-COVID-19 levels of Fiscal 2019. The growth in sales was largely driven by the rural market, which benefited from a boost in consumer sentiment due to an aboveaverage monsoon season, coupled with increased Minimum Support Prices (MSPs) across crops. The introduction of new models, particularly in the EV segment, also played a significant role in driving growth. However, sales began to slow down from December 2024 onwards, as dealers faced pressure from high inventory levels and concerns over financing. The two-wheeler segment is yet to reach pre-COVID-19 levels, unlike other automobile sectors, due to the sharp jump in costs between Fiscals 2019 and 2023, resulting from regulatory and safety norms that particularly impacted the entry-level motorcycle segment. Looking ahead, sales are expected to continue growing in Fiscal 2026, driven by the launch of new models, increasing demand for EVs, and potential improvements in rural and corporate incomes, aided by a cut in interest rates and the new tax slabs announced in the Union Budget, which are likely to leave more disposable income

in the hands of potential two-wheeler buyers, providing an additional catalyst for growth.

Two-wheeler sales only set to surpass pre-covid levels in fiscal 2026

Note: Figures in millions

Source: Company Reports, Society of Indian Automobile Manufacturers (SIAM), Crisil Intelligence

Three-wheeler industry

In Fiscal 2025, three-wheeler sales in India are estimated to reach 7.3 lakh units, reflecting a decline of 1-3% over a high base of Fiscal 2024, which grew by 52%. Despite healthy replacement demand from sales of Fiscal 2018-2019, the general slowdown in sales of commercial vehicles due to slower government spending, along with weaker consumer sentiments, affected three-wheeler sales as well. Additionally, tightened credit norms and higher borrowing costs, which have made financing more challenging for buyers, impacted sales. Three-wheeler sales are projected to pick up in Fiscal 2026 by 3-5%, owing to better economic performance, powered by higher government spending, improved consumer sentiments, and better financing conditions due to repo rate cuts and an improvement in the supply of electric three-wheelers.

Three-wheeler sales to continue building on heathy sales

Source: Company Reports, Society of Indian Automobile Manufacturers (SIAM), Crisil Intelligence Systemic credit to witness steady growth in fiscal 2026.

In fiscal 2025, India''s systemic credit, comprising banks and non-banks, expanded about 15%. Retail segments continued to drive credit growth, although the unsecured lending segment normalised from an elevated base. The RBI''s vigilant oversight and risk-weights circular on consumer loans tempered growth in unsecured portfolios, ensuring a more measured pace of expansion.

Systemic credit is expected to accelerate at a CAGR of 14-15% between fiscals 2025 and 2027. The wholesale and secured retail segments, such as housing and vehicle loans, are poised to be the primary drivers of overall credit expansion in the near term. However, unsecured retail loans, including personal loans and microfinance, pose a downside risk, due to the prevailing asset quality concerns, which will require close monitoring.

Secured segments to propel NBFCs'' credit growth, albeit at a moderate pace

NBFCs have been a crucial part of India''s financial ecosystem, bridging the credit gap in underserved areas. Their significance is underscored by their share in systemic credit (comprising banks and NBFCs) increasing by over 150 bps since fiscal 2020 to reach an estimated 23.2% as of March 2025.

Driven by their targeted focus on retail segments, NBFCs continue to outpace the overall systemic credit, clocking a CAGR of 14% between fiscals 2020 and 2025. In fiscal 2025, the retail segment saw strong expansion in secured asset classes, while the unsecured lending segments normalised from an elevated base. As a result, NBFCs expanded their outstanding credit by 16-18% on-year in fiscal 2025 and are expected to grow at a similar pace in fiscal 2026.

Credit growth momentum was sustained in fiscal 2024, driven by robust demand from key retail segments, building on the recovery in fiscal 2023 to pre-pandemic levels. The share of retail credit increased to 48% in fiscal 2024 from 42% in fiscal 2020. However, the credit market witnessed a shift from unsecured to secured asset classes in fiscal 2025, owing to concerns over asset quality in the former. As a result, the retail segment''s share in the lending mix fell slightly to 47%, while the wholesale segment''s share increased to 53%.

vehicles segment, partially offset by growth in tractor and two-wheeler sales, led by improved rural sentiment. NBFCs'' vehicle finance portfolio is expected to experience a modest uptick in fiscal 2026, aided by improving market sentiment and supported by the easing of domestic interest rates, following the RBI''s 50 bps repo rate cut between February and April 2025, with further rate cuts anticipated in fiscal 2026.

The housing credit growth remained steady at 13-14% on-year in fiscal 2025, reflecting broader economic moderation and elevated interest rates. Nevertheless, the sector remained resilient, buoyed by rising disposable incomes, robust demand and stable property prices.

NBFCs'' credit growth in the personal loan segment moderated to 22-24% on-year in fiscal 2025 from 39% in fiscal 2024 due to heightened concerns over asset quality, mainly on account of overleveraging, marked by a decline in unique borrowers in the past two years. The segment''s small-ticket loans were particularly vulnerable to delinquencies and overleveraging. In response, the RBI took proactive measures, including increasing risk weights, which, in turn, led lenders to exercise caution and slow down disbursements to the segment.

NBFCs'' consumer durable financing portfolio grew 23-25% in fiscal 2025, fueled by strong mobile phone sales, higher credit penetration and the rise of fintech players. The tax relief announced in the budget for fiscal 2026 is expected to boost retail consumption and demand, driving credit growth in the consumer durable financing segment in fiscal 2026.

Note:

1) Retail includes housing, vehicle, gold, microfinance, personal, consumer durables and education loans

2) Wholesale includes micro, small and medium enterprises, real estate and large corporate, infrastructure and construction equipment loans

Source: Industry, company reports, RBI, Crisil Intelligence Within retail credit, the growth of NBFCs'' vehicle finance portfolio moderated to 16-17% on-year in fiscal 2025 from 25% in fiscal 2024. The moderation was driven by a decline in the commercial

Opportunities and threats

As a CIC, the Company holds investments in equity shares of TVS Motor Company Ltd (TVSM) and has a presence in the financial services sector through its step-down subsidiary, TVS Credit Services Ltd, classified as a middle-layer NBFC. In fiscal 2025, the Company expanded its financial services footprint by acquiring an 80.74% equity stake in Home Credit India Finance Private Ltd, classified as a middle-layer NBFC, making it a subsidiary. The strategic acquisition has further bolstered the Company''s position in the financial services sector.

India''s retail credit market presents a significant opportunity, as reflected in its relatively low household credit-to-GDP ratio of 43%

as of the first half of calendar year 2024, compared with 62% in China, 71% in the United States and 78% in the United Kingdom (Source: Bank for International Settlements).

Amid financial awareness and inclusion growth, driven by government initiatives and increasing access to credit for underserved populations, credit penetration in India is poised to expand. The expansion is expected to be aided by the retail credit segment. Furthermore, as disposable incomes rise and financial health improves, consumers are increasingly seeking to upgrade their lifestyle, driving demand for credit to finance discretionary purchases such as vehicles and consumer durables.

Risks and concerns

Inflation is expected to be more subdued in fiscal 2026 compared to the previous year. Favorable weather forecasts from Skymet, which predict a normal monsoon, are likely to help contain food inflation. Additionally, softer international crude oil and commodity prices are anticipated to ease non-food inflationary pressures. The recent surge in US tariffs poses a risk of dumping in the Indian market, which could impact domestic prices. Moreover, the threat of extreme weather events, exacerbated by climate change, remains a concern. Overall, the easing inflationary pressures have created space for the RBI to consider supporting economic growth through monetary policy easing.

Meanwhile, the considerable outflow of foreign portfolio investments and the rupee''s sharp volatility against the US dollar have led to a liquidity drain in the banking system. The rupee moved to $87.40 on February 28, 2025 from $ 83.81 to the dollar on October 1, 2024, before appreciating to $85.65 on April 3, 2025. This is against an annual depreciation of 1-2% seen over the preceding two years through September 2024. Nevertheless, the RBI maintains ample forex reserves to cushion domestic markets from excess volatility and is expected to continue using its liquidity and foreign exchange tools to support financial conditions.

Risk management

We realize the importance of effective risk management in achieving business objectives. To this end, we have developed a comprehensive, customized Risk Management Policy that is approved by our Board of Directors. The policy outlines our risk strategy, approach and mitigation plans, including liquidity risk and asset-liability management to ensure we are well-equipped to identify, assess, monitor and address a wide range of risks.

As a registered core investment company (CIC), our operations are focused on investments within our group companies. The policy is closely aligned with our business operations and designed to foster a risk-intelligent culture that enables informed decisionmaking and enhances our resilience in the face of adverse

developments. Our goal is to create value for all stakeholders by seizing opportunities and managing risks effectively.

To ensure robust risk oversight, we have established a dedicated Risk Management Committee, in compliance with the Securities and Exchange Board of India Listing Regulations and RBI Master Directions. The Committee is responsible for monitoring risks and implementing necessary mitigation measures. It works closely with our Audit Committee to conduct detailed reviews of risks related to internal controls, compliance and systems. Additionally, the Board of Directors conducts regular reviews of all risks, including those related to investments to ensure a proactive and comprehensive approach to risk management.

The policy reflects the Company''s commitment to upholding the highest standards of regulatory compliance, safeguarding the interests of its stakeholders and promoting a culture of risk awareness and prudent decision-making. By navigating challenges effectively and maximising opportunities for sustainable growth, the Company aims to deliver long-term value to its stakeholders and maintain its position as a trusted and responsible business leader.

Human resource

As on March 31,2025, the Company had 56 employees, responsible for managing and administering the business operations.

Internal control systems and adequacy

The Board is responsible for evaluating and approving the effectiveness of the Company''s internal controls, which encompass financial, operational, and compliance aspects. To ensure the integrity of its assets and accuracy of financial transactions, the Company has established a robust internal control system that provides reasonable assurance against loss, unauthorised use or misappropriation.

The internal control system is subject to continuous evaluation and improvement to ensure its effectiveness in supporting the Company''s financial reporting, operational efficiency and compliance with legal and regulatory requirements. The Company prioritises the reliability of financial reporting and adheres to the highest standards of transparency and accountability.

The Audit Committee plays a critical role in overseeing the effectiveness of internal controls, leveraging new technologies to inform financial controls and risk management. The Committee''s oversight ensures that the Company''s internal control framework, which includes internal controls over financial reporting and operating controls are regularly reviewed and tested by both an independent audit firm and the internal audit team. The Board is of the opinion that internal financial controls with reference to the

financial statements were tested and reported adequate and operating effectively.

Regulations

In August 2020, the RBI introduced a revised framework for registered CICs to mitigate systemic risks arising from the interconnectedness of CICs and their group companies. The revised framework mandates systemically important CICs to establish a policy for continuously assessing the ''fit and proper'' status of their directors and to submit periodic reports to the RBI, thereby enhancing oversight and promoting good corporate governance.

To boost transparency and disclosure, the RBI''s revised framework requires CICs to prepare consolidated financial statements, in accordance with the Companies Act, 2013, providing a comprehensive view of the group''s financials. Additionally, CICs must maintain a functional website that includes their annual and corporate governance reports, management discussion and analysis, as well as information on the adequacy of internal controls.

In October 2021, the RBI introduced additional classification for NBFCs under the Scale Based Regulation framework into four categories i.e Base Layer (NBFC-BL), Middle Layer (NBFC-ML), Upper Layer (NBFC-UL) and Top Layer (NBFC-TL), based on their size, activity and perceived riskiness. Based on this, NBFC-CICs will be classified as either middle layer (which includes all deposittaking NBFCs, regardless of asset size and non-deposit-taking NBFCs with assets of $ 1,000 crore or more) or upper layer (which comprises NBFCs identified by the RBI as requiring enhanced regulatory oversight based on specific parameters and scoring methodology, as well as the top 10 NBFCs by asset size, which will always feature in the upper layer).

Accordingly, TVS Holdings is classified as a middle-layer NBFC.

The Company has ensured adherence to all the applicable regulatory requirements and guidelines relevant to its business processes.

7. CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Company''s objectives, projections, estimates and expectations may be ''forward looking statements'' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations include, amongst others, economic conditions affecting demand / supply and price conditions in the domestic and overseas market in which the Company operates, changes in the Government Regulations, Tax Laws and Other Statues and incidental factors.

8. KEY FINANCIAL RATIOS

The Company being an investment company does not carry on any business other than holding investments in its group

companies. Dividend receipts from investee companies is the primary source of income. Key ratios of the Company are given in the table below:

Ratio Description	March 31, 2025	March 31,2024
Net Profit Margin (%)*	54.68	20.57
Total debts to Total assets ratio	0.34	0.23
Debt Equity ratio	0.45	0.31
Leverage ratio	0.04	0.04
Capital ratio (%)	1,243.64	1,172.70

* The increase in net profit margin during the year is primarily attributable due to the demerger of manufacturing activities as a part of Composite Scheme of Arrangement in the previous year, resulting in a significantly lower cost structure. However, the Company''s profitability for the period was maintained through income from brand management fees, interest, dividend and profit on sale of investment.

9. DEBENTURES

NON-CONVERTIBLE DEBENTURES (NCDS)

The Company issued and allotted 65,000 Senior, Rated, Unsecured, Listed, Redeemable and Non-Convertible Debentures of the face value of INR 1 Lakh each ("NCDs"), aggregating to INR 650 Crores at 8.65% on private placement basis on 7^th June, 2024. The NCDs were listed with NSE on 11^th June, 2024 and will mature on 7^th June, 2029.

Further, the Company issued and allotted 30,000 Senior, Rated, Unsecured, Listed, Redeemable, Non-Convertible Debentures of the face value of INR 1 Lakh each ("NCDs") aggregating to INR 300 Crores at 8.75% on 22^nd January, 2025. The NCDs were listed with NSE on 27^th January, 2025 and will mature on 22^nd January, 2030.

10. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company recognizes social responsibility as an integral and a critical part of its value system. Srinivasan Services Trust (SST), the CSR arm of TVS Holdings Limited, has been successfully driving positive change in rural communities.

In the last 29 years, SST''s model has matured into one centred on community participation in all its projects. Today, SST works in 2,500 villages in the country. It follows an integrated, holistic and participatory approach to village development, working very closely with the communities and the government.

SST''s focus is to bring about sustainable development in villages through Total Community Involvement (TCI). Society building through the development of women and children, conserving water,

providing holistic health and education by renovating the government infrastructure and preserving the environment are its focus areas. SST nudges communities to embrace practices towards a better quality of life by ensuring a participatory approach right from planning to execution of activities.

More than 60,000 women across the country have been organised into Self-Help Groups (SHGs), which empower the women socially and economically. Today, more than $ 100 Crores of income is being generated annually by the women in Self-Help Groups.

In 2024-25, 9 SHGs facilitated by SST have been honoured with the district level prestigious Manimegalai Award introduced by Government of Tamil Nadu for empowering women and fostering economic growth.

SST has so far renovated more than 2000 government infrastructures, which includes anganwadis, schools, health centers and veterinary centers. Adopting this holistic integrated village development model, SST has partnered with organizations like Gramalaya, Agastya International Foundation, Villmart Education, Navsahyog Foundation, Shreeja Mahila Milk Producer Company, National Bank for Agriculture and Rural Development (NABARD) and Sankara Eye Foundation to create impact in the villages it serves.

SST has ensured that more than 25,000 farmers have been benefitted by its water conservation projects like building and repairing water conservation structures, desilting tanks and channels and creating percolation ponds. Today, across the country, over 400 water conservation projects have been implemented by SST. This has created an additional water storage capacity of 154 crore litres.

SST also ensures last mile connectivity for the government social security, agriculture and livestock schemes to reach the unreached and underserved. Apart from renovating the government health centers and conducting regular medical camps, SST runs 7 medical centers and 2 mobile medical vans in its working areas. Today, due to SST''s interventions, more than 2 lakh patients annually have access to health care facilities.

SST has also afforested barren hillocks of over 14000 acres, in the last 3 decades. SST is working with Tata Institute of Social Sciences (TISS), 4th Wheel Social Impact, Institute of Rural Management Anand (IRMA) and Chrysalis services to carry out social impact studies for the various projects it is undertaking in its working areas.

SST has won the following awards in FY25:

• 1^st place for its ''Learning & development'' best practice at the

27^th NHRD National conference & 13^th HR Showcase at Bengaluru on Feb 7-8, 2025.

• The CSR Universe Social Impact Awards 2024 under the ''Health'' category for impactful health services to rural communities through SST Health Centres, Mobile Medical Vans, Health camps.

• The Gold award for ''Excellence in HR Digital transformation'' at the Economic Times Human Capital Awards MENA 2024.

• The CSR & Sustainability Award 2023 under the category of Excellence in Providing Healthcare Services by ASSOCHAM (The Associated Chambers of Commerce and Industry of India).

As required under Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the annual Report on CSR, containing the particulars of the projects / programmes approved and recommended by the CSR Committee and approved by the Board for the financial year 2024-25 are given by way of Annexure III attached to this Report. It may also be noted that the CSR Committee has approved the projects or programmes to be undertaken by the SST and other eligible trusts for the year 2025-26, preferably in local areas including the manner of execution, modalities of utilisation of funds and implementation schedules and also monitoring and reporting mechanism for the projects or programmes, as required under the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014.

11. RESOURCE MOBILISATION

During the financial year under review, $ 950 Crs have been mobilised by way of issuance of Listed Non-Convertible Debentures (NCD).

12. DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 (the Act, 2013) with respect to Directors'' Responsibility Statement, it is hereby stated -

(i) that in the preparation of annual accounts for the financial year ended 31^st March, 2025, the applicable Accounting Standards had been followed and there were no material departures from the same;

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

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance

with the provisions of the Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors had prepared the annual accounts for the financial year ended 31^st March, 2025 on a "going concern basis";

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

(vi) that 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.

13. FINANCIAL PERFORMANCE OF SUBSIDIARIES & ASSOCIATES

Acquisitions / Disinvestments

During the year under review, the Company had made the following

acquisitions and disinvestments:

• Acquired 80.74% stake in Home Credit Indian Finance Private Limited (HCIFPL) on 3^rd February, 2025 and consequently, HCIFPL became a subsidiary of the Company effective that date. Subsequent to the same, the Company has acquired additional stake of 0.30% in HCIFPL, by way of subscription to 3,63,23,290 equity shares of $ 10/- each thereby aggregating to 81.04 % stake as at 31^st March, 2025.

• Acquired 100% stake in TVS Digital Limited (TVSD), thereby TVSD became a wholly owned subsidiary effective 16^th September, 2024.

• Acquired additionally 10.74% in TVS Emerald Limited (TVSE) (Formerly known as Emerald Haven Realty Limited) on 3^rd May 2024, thereby TVSE became a wholly owned subsidiary effective that day alongwith its subsidiaries which became step-down subsidiaries of the Company until the time of its 100% disinvestment by the Company effective 31^st December, 2024.

As on 31^st March 2025, the following companies and bodies

corporate were the subsidiaries / associates of the Company:

Subsidiaries:

1. TVS Motor Company Limited (TVSM), Chennai

2. TVS Digital Limited, Chennai (from 16^th September 2024)

3. Home Credit India Finance Private Limited, New Delhi (from 3^rd February, 2025)

4. TVS Holdings (Singapore) Pte Limited, Singapore

Subsidiaries of TVSM

1. TVS Credit Services Limited (TVS CS), Chennai

2. Sundaram Auto Components Limited (SACL), Chennai

3. TVS Motor Services Limited, Chennai

4. TVS Electric Mobility Ltd, Chennai

5. PT TVS Motor Company Indonesia, Jakarta.

6. TVS Motor (Singapore) Pte. Limited, Singapore (TVSM Singapore)

7. TVS Motor Company (Europe) B.V., Amsterdam

8. TVS Motor Company DMCC, Dubai [from 27^th June, 2024]

9. DriveX Mobility Private Limited, Coimbatore [from 23^r'' December, 2024]

Subsidiaries of TVS CS

1. Harita ARC Private Limited, Chennai

2. TVS Housing Finance Private Limited, Chennai

3. Harita Two-wheeler Mall Private Limited, Chennai

Subsidiaries of TVS Motor (Singapore) Pte. Limited

1. The Norton Motorcycles Co Limited, UK

2. Swiss E-Mobility Group (Holding) AG, Switzerland (SEMG)

3. The GO Corporation, Switzerland

4. Celerity Motor GmbH, Germany

5. EBCO Limited, UK

6. TVS Digital Pte Ltd, Singapore

Subsidiaries of The GO Corporation

1. EGO Movement, Stuttgart GmbH, Germany

Subsidiaries of SEMG

1. Swiss E-Mobility Group (Schweiz), Switzerland

2. Swiss E-Mobility Group (Osterreich) GmbH, Austria

3. Colag E-Mobility GmbH, Germany

4. Alexand''Ro Edouard''O Passion Velo Sari, Switzerland

Associate Company

1. TVS Training & Services Limited, Chennai

Associates of TVSM

1. Ultraviolette Automotive Private Limited, Bengaluru

Associates of TVS Motor (Singapore) Pte. Limited:

1. Killwatt GmbH, Germany

Associates of TVS Digital Pte Ltd:

1. Predictronics Corp., USA

2. Altizon Inc, USA

14. SUBSIDIARIES PERFORMANCE:

TVS Motor Company Limited (TVSM)

TVSM is engaged in the business of manufacturing two and three-wheelers. During the year 2024-25, TVSM''s total revenue including other income was $ 36,909.33 Cr and earned a profit after tax of $ 2,710.54 Cr. TVSM for the year 2024-25, declared and paid an interim dividend of $ 10 per share (1000%) absorbing a sum of $ 475 Cr on 47,50,87,114 equity shares of $ 1 each.

TVSM has proposed to issue 4 bonus Non-Convertible Redeemable Preference Shares (NCRPS) of face value of INR 10 each fully paid up, for every 1 equity share of INR 1 each fully paid up held by equity shareholder of the Company, which will be listed on both the Stock Exchanges viz., BSE Limited and National Stock Exchange of India Limited through a Scheme of Arrangement.

TVSM has filed the petition along with the approval of the shareholders'' before Hon''ble National Company Law Tribunal for seeking final sanction of the scheme in relation to the issuance of bonus NCRPS and the same is awaited.

Home Credit India Finance Private Limited (HCIFPL)

HCIFPL is engaged in the business of providing unsecured loans and is one of the leading players in the consumer financing market and the personal loans segment. The Company completed the acquisition of HCIFPL on 3^rd February 2025 and HCIFPL''s total revenue during the year was $ 2101 Cr and Loss After Tax was $ 530 Cr. This includes a one-time impact arising from the de-recognition reversal of deferred tax assets created on brought-forward losses and other disallowances.

TVS Digital Limited (TVS Digital)

TVS Digital Limited (Formerly known as TVS Housing Limited) became a wholly owned subsidiary of the Company effective 16^th September 2024.

TVS Digital Limited carry on the business activities relating to Digital / Information Technology and other related services.

TVS Digital generated a total revenue of $ 27.85 Cr during the year and Profit Before Tax was $ 0.67 Cr.

TVS Holdings (Singapore) Pte Limited

The Company was incorporated on 11^th January, 2024 to carry out overseas business acquisitions and investments. The Company has not commenced any business activity as on date.

TVS Credit Services Limited (TVS CS)

TVS CS is the retail finance arm of TVSM for financing of two wheelers, used cars, used and new tractors, used commercial vehicles, consumer durables, digital finance products, emerging and corporate business loans and personal loans. Along with these, it started offering gold loans during this FY. TVS CS primarily caters to self-employed, new to credit borrowers in the semi-urban and rural areas in India.

During FY 2024-25, TVS CS''s overall disbursements registered at $ 26,301 crore as compared to $ 25,108 crore in the previous year registering growth of 5%.

The book size of TVS CS registered a growth of 3% and is presently at around $ 26,647 crore. Total income during the FY 2024-25 grew by 14% at $ 6,630 crore from $ 5,795 crore during FY 2023-24. The PBT grew by 35% at $ 1,025 crore as against $ 762 crore during the previous year.

The following companies are the subsidiaries of TVS CS:

• Harita ARC Private Limited, Chennai

• Harita Two-wheeler Mall Private Limited, Chennai

• TVS Housing Finance Private Limited, Chennai

All the above subsidiaries are yet to commence their operations.

Sundaram Auto Components Limited (SACL)

During the year under review, SACL, a wholly owned subsidiary of the TVSM, completed the sale of its injection moulded plastic component solutions division on 31^st January 2025 and business of manufacturing of seats for two-wheelers on 22^nd March 2025 as a going concern on a slump sale basis.

SACL earned a profit before tax of $ 15.5 crore including gain on sale of the undertakings during FY 2024-25 as against profit of $ 29 crore in the previous year. SACL declared a interim dividend of $ 84/- per share on 1,19,37,422 equity shares of $ 10/- each for the year ended 31^st March 2025 absorbing a sum of $ 100.27 crore.

TVS Motor Services Limited (TVS MS)

TVS MS was initially the investment Special Purpose Vehicle (SPV) of TVSM, for funding TVS Credit Services Limited (TVS CS). TVS MS continues to be a wholly owned subsidiary of the TVSM.

TVS Electric Mobility Ltd, Chennai (TVSEM)

The Company was incorporated to undertake Electric Mobility business.

The entire shares of TVSEM have been subscribed by TVSM and hence, TVSEM is a wholly owned subsidiary of the TVSM. The Company is yet to commence its operations.

DriveX Mobility Private Limited (DriveX)

During the year under review, DriveX has become a subsidiary of TVSM and thereby the Company effective 23^rd December 2024.

DriveX Mobility Private Limited (DriveX'') is engaged in the business of procurement, refurbishment and retailing of the pre-owned multibrand two-wheeler motorcycles and scooters through its own stores (COCO) and through its franchisee dealers (FOFO). DriveX is also engaged in trading of spare parts, accessories and engine oils for two-wheelers. DriveX presently has 8 COCOs and around 50 FOFOs. DriveX has presence across India through its FOFOs but predominantly operates in the Southern part of India spreading Karnataka, Tamil Nadu and Pondicherry. DriveX has 2 refurbishment centres located in Hosur and Coimbatore.

During FY 2024-25, the Company earned revenue of $ 61 crore against revenue of $ 36.6 crore for FY 2023-24.

TVS Motor Company (Europe) B.V.

TVS Motor Company (Europe) B.V. was incorporated with a view to serve as special purpose vehicle for making and protecting the investments made in overseas operations of PT TVS.

TVS Motor (Singapore) Pte. Ltd

TVS Motor (Singapore) Pte Limited, is a wholly owned subsidiary of TVSM. During the year, TVSM has invested a sum of $175.84 million in the ordinary shares.

The Company serves as a special vehicle for investments made in overseas subsidiaries/associates.

TVS Motor Company DMCC, Dubai

TVSM has incorporated a wholly owned subsidiary in Dubai viz., TVS Motor Company DMCC, Dubai (''TVSM DMCC'') on 27^th June 2024. The purpose of this subsidiary is to leverage and grow the international business by efficiently serving the MENA (Middle East and North Africa) region.

TVS Digital Pte Ltd, Singapore

TVS Digital Pte Limited, Singapore is a wholly owned subsidiary of TVS Motor (Singapore) Pte. Ltd. The Digital start-up offers a range of solutions across their Autotech and Fintech platforms.

During FY 2024-25, the Company earned revenue of $ 8.93 crore against revenue of $ 14.28 crore for FY 2023-24. The Company incurred a net loss of $ 69.25 crore during FY 2024-25 as against a net loss of $ 67.68 crore in the previous year.

PT. TVS Motor Company Indonesia (PT TVS)

During the financial year, PT TVS two-wheeler sales grew by 19.3%, standing at 0.14 million units as against 0.12 million units during the previous financial year, and three-wheeler sales is at 4,727 units as against 6,949 units during the previous financial year. During the year PT TVS reported operating EBITDA of $8 million as against $8.3 million during the last year

Swiss E-Mobility Group (Holding) AG (SEMG)

The Swiss E-Mobility Group (Holding) AG (SEMG), a wholly owned subsidiary of TVS Motor (Singapore) Pte Ltd, along with its subsidiaries Swiss E-Mobility Group (Schweiz) AG, Switzerland, Swiss E-Mobility Group (Osterreich) GmbH, Austria, Colag E-Mobility GmbH, Germany and Alexand''Ro Edouard''O Passion Velo Sarl, operates in the DACH (Germany, Austria and Switzerland) region with a focus on e-bikes through its retail chain, m-way, and two e-commerce platforms. SEMG offers a diverse range of e-bike brands, including Cilo, Simpel, and Allegro, and holds about 16% market share in Switzerland.

In CY 2024, SEMG reported revenues of CHF 57.3 million amidst tough market conditions in Europe. For CY2026, the Company aims to enhance operational efficiency and expand its B2C and B2B segments, launching new products for the European and International markets.

SEMG is adapting to trends in personal mobility by promoting various e-bike categories, such as e-city, e-urban, e-trekking, e-mountain, and e-cargo bikes. SEMG''s strategic initiatives position it well to become a profitable player in the sustainable transportation sector.

The GO Corporation, Switzerland (The GO AG)

The GO AG is a Swiss technology company providing innovative mobility solutions through a portfolio of e-bikes, e-cargo bikes and matching accessories.

In CY2024, the GO Corporation group reported a revenue of CHF 3.19 million as against a revenue of CHF 4.9 million in CY2023. In CY2025, GO AG is proposing to launch new products under its EGO MOVEMENT brand for European and International markets.

During the year, the GO AG has become a wholly owned subsidiary of TVS Motor (Singapore) Pte Limited on its acquisition of the remaining stake from the existing shareholder.

EBCO Ltd, UK (EBCO)

EBCO Ltd., a British company providing mobility solutions through e-bikes across the Adventure, Urban and City bikes segments. EBCO offers innovative and high-quality e-bikes in the UK market.

During FY 2024-25, EBCO reported a revenue of GBP 1.14 million as against GBP 0.8 million during FY 2023-24. The business remains affected by the overall market conditions and excess inventory in the industry. With its actions on reducing inventory, the introduction of new products and adding retail partners, EBCO is well placed to capture additional market share in FY 2025-26.

During the year, EBCO has become a wholly owned subsidiary of TVS Motor (Singapore) Pte Limited on its acquisition of the remaining stake from the existing shareholder.

The market for e-bikes represents 30% of all bicycles sold in Europe. CY 2025 is expected to be a transition year with growth returning in CY 2026 as the industry continues to address challenges of excess inventory and excessive discounting. The revenue from sales of E-bikes is expected to reach $23 billion by 2029 growing at a CAGR of approximately 4%. Over the past decade, the personal mobility landscape has evolved significantly with the global sustainability agenda, increasing urbanisation and advancement in battery technology.

The Norton Motorcycle Co Limited, UK (Norton)

Since acquiring Norton in 2020, the Company has established a strong foundation by setting up a state-of-the-art facility and a dedicated engineering and design centre to drive Norton''s growth. In FY 2023-24, Norton celebrated its 125-year legacy with the launch of special edition models.

The premium and super-premium motorcycle markets are expected to see consistent growth, and Norton is positioning itself as a formidable player with a robust product pipeline nearing market readiness.

Over the next eight quarters, the Company will continue to invest strategically, leveraging its engineering, design, development, and supply chain capabilities to deliver high-quality products efficiently and cost effectively.

TVSM has committed investment in new product development, facilities, research and development and world-class quality engineering. The new Norton motorcycles will follow the Company''s philosophy of ''Design, Dynamism, and Detail''. Exciting product launches are being planned, with six new models planned over the next three years. As part of this, Norton is preparing for

international expansion with an initial focus on USA, Germany, France, Italy and India.

ASSOCIATE COMPANY

TVS Training and Services Limited (TVS TS)

TVS TS is engaged in the business of providing technical, vocational training and man power supply to various industries and is participating in the National Skill Development Projects.

During the year, TVS TS earned an income of $ 164 Cr and loss for the year ended 31^st March, 2025 was $ 2.14 Cr.

15. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 along with a separate statement containing the salient features of the financial performance of subsidiaries / associates in the prescribed form. The audited consolidated financial statements together with the Auditors'' Report form part of the Annual Report.

The financial statements of the subsidiary companies will be made available to the Shareholders, on receipt of a request from any Shareholder. The financial statements of the subsidiaries have also been placed on the website of the Company. This will also be available for inspection by the Shareholders during business hours as mentioned in the Notice of AGM.

The consolidated Profit Before Tax of the Company and its subsidiaries & associates amounted to $ 3,616.12 Cr for the financial year 2024-25 as compared to $ 2,786.42 Cr in the previous year.

16. DIRECTORS & KEY MANAGERIAL PERSONNEL

During the year under review, the Directors and Key Managerial Personnel of the Company received the following awards:

• Mr Venu Srinivasan, Chairman of the Company received the ET Lifetime Achievement Award, recognising a remarkable journey of setting new standards in quality and innovation.

• Mr Sudarshan Venu, Managing Director of the Company was honoured with India''s best CEO award in Manufacturing and Retail Excellence Category by Business Today. He also featured in the list of India''s best CEOs by Fortune and Business World magazines.

• Mr C R Dua, Independent Director Honored with Lawyers of India Day Award 2024 for Exemplary Dedication to Upholding the Rule of Law.

Directors'' appointment / re-appointment / cessation

During the financial year, there was no change in the constitution of the Board of Directors of the Company.

In terms of the provisions of sub-section (6) read with explanation to Section 152 of the Act, 2013, two-thirds of the total number of Directors i.e., excluding IDs, are liable to retire by rotation and out of them, one-third is liable to retire by rotation at every AGM. Accordingly, Mr Sudarshan Venu, Managing Director and Mr R Gopalan, Non-Executive Director, are liable to retire by rotation, at the ensuing AGM.

The Directors have recommended their re-appointment for the approval of shareholders. Brief resume of the Directors are furnished in the Notice convening the AGM of the Company.

Independent Directors (IDs)

All IDs hold office for a fixed term and are not liable to retire by rotation.

The appointment of new Directors is recommended by the Nomination and Remuneration Committee (''NRC'') on the basis of requisite qualifications, skills, proficiency, experience, expertise in industry knowledge and competencies as identified and finalized by the Board considering the industry and sector in which the Company operates. The Board, on the recommendation of the NRC, independently evaluates and recommends to the shareholders.

The terms of appointment of Independent Directors (IDs) include the remuneration payable to them by way of fees and profit-related commission, if any.

The terms of IDs cover, inter-alia, duties, rights of access to information, disclosure of their interest / concern, dealing in Company''s shares, remuneration and expenses, insurance and indemnity. The IDs are provided with copies of the Company''s policies and charters of various committees of the Board.

In accordance with Section 149(7) of the Act, 2013, all IDs have declared that they have met the criteria of independence as provided under Section 149(6) of the Act, 2013 and Regulation 25 of the Listing Regulations and the Board confirms that they are independent of the management.

The detailed terms of appointment of IDs is disclosed on the Company''s website in the link as provided in page no. 94 of this Annual Report.

All the IDs are registered with the databank of Independent Directors developed by the Indian Institute of Corporate Affairs in accordance with the provisions of Section 150 of the Companies Act, 2013 and obtained ID registration certificate and renewed the same for five years / life time, as the case may be.

In the opinion of the Board, the Independent Directors appointed are persons of high repute, integrity and possess the relevant expertise, experience and proficiency.

Separate meeting of Independent Directors

During the year under review, a separate meeting of IDs was held on 7^th March 2025.

Based on the set of questionnaires, complete feedback on NonIndependent Directors and details of various activities undertaken by the Company were provided to IDs to facilitate their review / evaluation.

a) Non-Independent Directors (Non-IDs)

Independent Directors (IDs) used various criteria prescribed by the Nomination and Remuneration Committee (NRC) for evaluation of Non-IDs and Executive Directors viz., M/s Sudarshan Venu, K Gopala Desikan and Non-ID NonExecutive Directors viz., M/s Venu Srinivasan and Mr R Gopalan and also of Chairman of the Board and the Board as a whole, for the year 2024-25.

IDs evaluated the performance of all Non-IDs individually, through a set of questionnaires.

IDs reviewed the Company''s performance during the year 2024-25 and the comparative data on financial / market cap for the year 2024-25.

They also reviewed the developing strategic plans aligned with the vision and mission of the Company, displaying leadership qualities for seizing the opportunities and priorities, developing and executing business plans aware of the risks involved, establishing an effective organizational structure, and demonstrating high ethical standards and integrity and commitment to the organization besides participation at the Board / Committee meetings, effective deployment of knowledge and expertise and constructive comments / guidance provided to management by the Non-IDs.

IDs appreciated and recorded that- Company has a high degree of integrity and governance towards all the stakeholders.

- the Company had a strong lineup of competent people and the Board was fortunate to have worthy people to rely upon for managing the Company''s affairs efficiently.

- The management had utilised the authority given by the shareholders to achieve remarkable results and the Company was a professionally managed Company.

The IDs were satisfied fully with the performance of all Non-IDs.

b) Chairman

IDs reviewed the performance of the Chairman of the Board. IDs also placed on record, their appreciation of the Chairman''s exemplary leadership skills, exceptional vision, and unwavering dedication, instrumental in leading the Company through a period of significant transformation, providing both strategic guidance and strong leadership to the Board of Directors and leverages his extensive experience to steer board discussions and decisions that maximize value for the Company and its shareholders.

The IDs endorsed that the Chairman is a very accomplished leader and is exceptionally well informed about the state of the economy.

c) Board

IDs also evaluated the Board''s composition, size, the mix of skills and experience, meeting sequence, the effectiveness of discussion, decision making, and follow up action, so as to improve governance and enhance the personal effectiveness of Directors.

The evaluation process focused on Board Dynamics. The Company has a Board with a wide range of expertise in all aspects of business and outstanding diversity of the Board with the presence of varied personalities with expertise in their respective fields.

The Company''s management is well guided by the NonExecutive Directors and the Board benchmarks well in terms of its overall composition and the value it adds to the business.

As far as shareholders'' interest is concerned, IDs noted that a proper system has been established to ensure that the Company is prompt, relevant and transparent.

They were satisfied with the Company''s performance in all fronts and finally concluded that the Board operates with best practices.

Board composition of the Company was in compliance with the Companies Act, 2013 and SEBI Listing Regulations.

d) Quality, Quantity and Timeliness of flow of information between the Company, Management and the Board

All IDs have expressed their overall satisfaction with the support received from the management and the excellent work done by the management during the financial year under review and also that the relationship between the top management and Board was smooth and seamless.

The Company is in compliance with the statutory requirements under both the Companies Act and the Listing Regulations and all the information provided to the Directors were very wholesome.

The information provided for the meetings were clear, concise and comprehensive to facilitate detailed discussions and periodic external presentations on specific areas well supplemented the management inputs. The emerging e-technology was duly incorporated in the overall review of the board.

Key Managerial Personnel (KMP)

Mr Sudarshan Venu, Managing Director, Mr K Gopala Desikan, Director & Group Chief Financial Officer and Mr R Raja Prakash, Company Secretary are KMPs of the Company in terms of Section 2(51) read with Section 203 of the Act, 2013 as on date of this Report.

There were no changes in the KMPs of the Company during the year.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee of Directors (NRC) reviews the composition of the Board to ensure an appropriate mix of abilities, experience and diversity to serve the interests of all stakeholders of the Company.

The objective of such policy is to attract, retain and motivate executive management and devise remuneration structure to link to Company''s strategic long-term goals, appropriateness, relevance, and risk appetite.

NRC will identify, ascertain the integrity, qualification, appropriate expertise and experience, having regard to the skills that the candidate will bring to the Board / Company, whenever the need arises for appointment of Directors / KMP/ SMP.

Criteria for performance evaluation, disclosures on the remuneration of Directors, criteria of making payments to NonExecutive Directors have been disclosed as part of Corporate Governance Report attached herewith.

Remuneration payable to Independent Directors

The Shareholders have provided approval for renewal of the payment of remuneration, by way of commission not exceeding 1% of the Net profits, in aggregate, payable to the Independent Directors of the Company (IDs) every year.

IDs devote considerable time in deliberating the operational and other issues of the Company and provide valuable advice in regard to the management of the Company from time to time, and the Company also derives substantial benefit through their expertise and advice.

Evaluation of the Independent Directors and Committees of Directors

In terms of Section 134 of the Act, 2013 and the Corporate Governance requirements as prescribed under the Listing

Regulations, the Board reviewed and evaluated Independent Directors and various Committees viz., Audit Committee, Risk Management Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee based on the evaluation criteria laid down by the NRC.

Board has carried out the evaluation of all Directors (excluding the Director being evaluated) and its committees through a set a questionnaire.

Independent Directors

The performance of all IDs was assessed against a range of criteria such as contribution to the development of business strategy and performance of the Company, understanding the major risks affecting the Company, clear direction to the management and contribution to the Board cohesion. The performance evaluation has been done by the entire Board of Directors, except the Director concerned being evaluated.

The IDs were always kept informed of the constitution of robust framework for the Company and group companies against cyber threats and mitigation plans against cyber-attacks for business continuity.

The Board noted that all IDs have understood the opportunities and risks to the Company''s strategy and are supportive of the direction articulated by the management team towards consistent improvement.

On the basis of the report of performance evaluation of directors, the Board noted and recorded that all the directors should extend and continue their term of appointment as Directors / Independent Directors, as the case may be.

Committees

Board delegates specific mandates to its committees, to optimize Directors'' skills and talents besides complying with key regulatory aspects.

a. Audit Committee for overseeing financial Reporting;

b. Risk Management Committee for overseeing the risk management framework;

c. Nomination and Remuneration Committee for selecting and compensating Directors / Employees;

d. Stakeholders'' Relationship Committee for redressing investors'' grievances;

e. Corporate Social Responsibility Committee for overseeing CSR initiatives and inclusive growth;

f. Asset Liability Management Committee for managing liquidity risks, market risks, and other funding / asset related risks for effective risk management in its portfolios; and

g. Administrative Committee for handling administrative matters as delegated by the Board.

The performance of each Committee was evaluated by the Board after seeking inputs from its members on the basis of specific terms of reference, its charter, time spent by the Committees in considering key issues, quality of information received, major recommendations / action plans and work of each Committee.

The Board is satisfied with the overall effectiveness and decision making of all Committees. The Board reviewed each Committee''s terms of reference to ensure that the Company''s existing practices remain appropriate.

Directors continue to devote such time as is necessary for the proper performance and effectively discharge their duties.

Board and its Committees have an appropriate combination of skills, experience and knowledge.

The current committees'' structure was considered effective and all the committees of the Board were considered to be working effectively.

Recommendations from each Committee were considered and accepted by the Board prior to its implementation during the financial year under review.

Details of Committees, its charter and functions are provided in the Corporate Governance Report.

Number of Board meetings held

During the financial year 2024-25, the Board met six times and details of the meetings are provided as part of the Corporate Governance Report prepared in terms of the Listing Regulations.

17. AUDITORS Statutory Auditors

The Company at its 62^nd Annual General Meeting (AGM) appointed M/s. N C Rajagopal & Co., Chartered Accountants, Chennai (ICAI Firm Registration Number: 003398S) as the Statutory Auditors of the Company to hold office, for a term of three years, from the conclusion of the said 62^nd AGM till the conclusion of the 65^th AGM, at such remuneration in addition to applicable taxes, and reimbursement of travelling and other out of pocket expenses as may be mutually agreed between the Board of Directors of the Company on the recommendations of the Audit Committee and the Auditors.

The Auditors'' Report for the financial year 2024-25 does not contain any qualification, reservation, disclaimer or adverse remark and the same is attached with the annual financial statements.

The Company has obtained the necessary certificate under Section 141 of the Act, 2013 confirming their eligibility for continuing as statutory auditors of the Company for the year 2025-26.

Secretarial Auditors

As required under Section 204 of the Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company is required to appoint a Secretarial Auditor for auditing secretarial and related records of the Company.

The Secretarial Audit Report for the financial year 2024-25, given by Mrs B Chandra, Practising Company Secretary, Chennai (COP No. 7859) is attached to this Report.

The Secretarial Audit Report does not contain any qualification, reservation, disclaimer or other remarks.

Pursuant to Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board at its meeting held on 28^th April 2025 has appointed M/s. B Chandra & Associates, Practising Company Secretaries, Chennai, as Secretarial Auditors for a term of five years from the financial year 2025-26 subject to the approval of the shareholders at the ensuing Annual General Meeting. Brief details of the profile of the Secretarial Auditor is enclosed as part of the notice convening the Annual General Meeting.

Cost Auditor

The requirement to maintain cost records and conducting of cost audit are not applicable to the Company.

18. CORPORATE GOVERNANCE

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

A separate section on Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Listing Regulations is given as Annexure VI to this Report.

The Managing Director and the Director & Group Chief Financial Officer of the Company have certified to the Board on financial statements and other matters in accordance with the Regulation 17 (8) of the Listing Regulations pertaining to CEO / CFO certification for the financial year ended 31^st March, 2025.

19. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") read with relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed under "Business Responsibility and Sustainability Report"(''BRSR''). The BRSR seeks disclosure on the performance of the Company against nine principles of the "National Guidelines on Responsible Business Conduct'' (''NGRBCs'').

As per the SEBI Circulars, effective from the financial year 2024-25, filing of BRSR is mandatory for the top 1,000 listed companies by market capitalisation. Accordingly, for the financial year ended 31^st March 2025, Company has published BRSR, in the prescribed format as Annexure V to this Report and is available on the Company''s website in the link as provided in page no. 94 of this Annual Report.

20. POLICY ON VIGIL MECHANISM

The Company has adopted a Policy on Vigil Mechanism in accordance with the provisions of the Act, 2013 and Regulation 22 of the Listing Regulations, which provides a formal mechanism for all Directors, Employees and other Stakeholders of the Company to report to the management, their genuine concerns or grievances about unethical behaviour, actual or suspected fraud and any violation of the Company''s Code of Business Conduct and Ethics.

The Code also provides a direct access to the Chairman of the Audit Committee to make protective disclosures to the management about grievances or violation of the Company''s Code.

The Policy is disclosed on the Company''s website in the link as provided in page no. 94 of this Annual Report.

21. PUBLIC DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Section 76 of the Act, 2013 and the Reserve Bank of India Act, 1934 and the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank of India) Directions, 2016 for the year ended 31^st March, 2025 and there are no such Public Deposits Outstanding as on 31^st March, 2025.

22. STATUTORY STATEMENTS

Information on conservation of energy, technology absorption, foreign exchange etc:

Conservation of energy

The operations of the Company or not energy intensive. However, the Company has taken, inter-alia, following measures to reduce energy consumption:

• optimal use of natural lighting during office hours.

• switching off lights and equipments when not in use.

• encouraging employees to power down systems after working hours.

• use of energy efficient laptops and monitors.

Technology absorption

As the Company is a Core Investment Company investing in Subsidiaries and Associate(s), has no particulars to report regarding technology absorption as required under Section 134 of the Companies Act, 2013 and Rules made thereunder.

Foreign Exchange
Details of Foreign Exchange earned and used during the Financial Year 2024-25 are given below:
Details	$ in Cr
Foreign exchange earned	-
Foreign exchange used	18.91

Material changes and commitments, if any, affecting the financial position of the Company, having occurred since the end of the year and till the date of the Report:

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

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

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

Annual Return:

Copy of the provisional Annual Return (Annexure I) in prescribed form is available on the Company''s website in the link as provided in page no. 94 of this Annual Report, in terms of the requirements of Section 134(3)(a) of the Act, 2013 read with the Companies (Accounts) Rules, 2014.

Employee''s remuneration:

Details of Employees receiving the remuneration in excess of the limits prescribed under Section 197 of the Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as a statement and given in Annexure II. In terms of first proviso to Section 136(1) of the Act, 2013 the Annual Report, excluding the aforesaid annexure is being sent to the Shareholders of the Company. The annexure is available for inspection at the Registered Office of the Company during business hours as mentioned in the Notice of AGM and any Shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

Comparative analysis of remuneration paid:

A comparative analysis of remuneration paid to Directors and Employees with the Company''s performance is given as Annexure IV to this Annual Report.

Details of related party transactions:

There were no material related party transactions under Section 188 of the Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014. Further, all RPTs were undertaken on an arm''s length basis. Therefore, disclosure in form AOC-2 is not required.

Details of loans / guarantees / investments made:

The Company is registered as a Core Investment Company with RBI. Thus, particulars of loans, guarantees and investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, are not applicable to the Company.

Reporting of fraud

The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act, 2013.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards as amended from time to time.

General Disclosures

During the year, there were no transaction requiring disclosure or reporting in respect of matters relating to:

a. issue of equity shares with differential rights as to dividend, voting or otherwise;

b. issue of shares (including sweat equity shares) to employees of the Company under any scheme;

c. pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016 and

d. instance of one-time settlement with any bank or financial institution.

Disclosure in terms of Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act, 2013

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH), as amended, Company has a robust mechanism in place to redress complaints reported under it. The Company has complied with provisions relating to the constitution of the Internal Complaint Committee under POSH. The Internal Committee (IC) comprises of internal members and external member who has an extensive experience in the field.

There were no cases of sexual harassment reported during the year 2024-25.

During the year 2024-25, initiatives were undertaken to demonstrate Company''s zero tolerance policy against discrimination and sexual harassment, which included creation of comprehensive and easy to understand training and communication material. In addition, online workshops were also run for the employees to enhance awareness and knowledge.

Statutory Disclaimer

The Company is having a valid Certificate of Registration dated 14^th March, 2024 issued by RBI under Section 45-IA of the RBI Act. However, RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for repayment of deposits / discharge of liabilities by the Company.

23. ACKNOWLEDGEMENT

The Directors gratefully acknowledge the continued support and co-operation received from the Promoters and also thank the bankers, investing institutions for their valuable support and assistance.

The Directors wish to place on record their appreciation for the contributions by all the employees of the Company during the year under review.

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

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Mar 31, 2024

The Directors have the pleasure in presenting the 62^nd annual report and the audited accounts of the Company for the year ended 31^st March 2024.

1. COMPANY OVERVIEW

UPDATE ON CORPORATE RESTRUCTURING

During the year under review, the Company the following events were completed as part of the Composite Scheme of Arrangement ("Composite Scheme") amongst the Company ("Demerged Company") and TVS Holdings Private Limited and VS Investments Private Limited and Sundaram-Clayton Limited (formerly known as Sundaram-Clayton DCD Limited) and their respective shareholders and creditors sanctioned by the Hon''ble National Company Law Tribunal, Chennai Bench ("NCLT") vide its Order dated 6^th March 2023.

CAPITAL STRUCTURE

Listing of Bonus Preference Shares

The Scheme Implementation Committee of the Company in its meeting held on 25^th March 2023, allotted 234,69,21,860 9% Cumulative Non-Convertible Redeemable Preference Shares ("NCRPS" / "Preference Shares") of the Company by way of Bonus, and NCRPS were listed on both the Stock Exchanges viz., National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE") effective 16^th June 2023.

Amalgamation of TVS Holdings Private Limited

In terms of the Composite Scheme, TVS Holdings Private Limited ("Transferor Company 1") was amalgamated into the Company effective 16^th June 2023 and consequently, 1,30,94,460 Equity shares of $ 5 each and 151,89,57,360 NCRPS of $ 10 each held by the Transferor Company 1 were cancelled.

Further, the Scheme Implementation Committee at their meeting held on 16^th June 2023, as consideration for the said amalgamation, approved the allotment of 1,30,94,460 equity shares of $ 5 each fully paid up and 151,89,57,360 preference shares $ 10 each fully paid up to shareholders of the Transferor Company 1, in the proportion of the number of shares held by the shareholders in the Transferor Company 1. The New Shares were listed with the Stock Exchanges viz., National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE").

Amalgamation of VS Investments Private Limited

VS Investments Private Limited ("Transferor Company 2") was amalgamated into the Company effective 4^th August 2023, and as consideration for the said amalgamation 19 Equity shares of $ 5 each of the Company were allotted to the shareholders of Transferor Company 2. The Equity Shares were listed with the Stock Exchanges viz., NSE and BSE. Further, 147,38,90,346 NCRPS of $ 10 each held by the Transferor Company 2 in the Company, was cancelled.

CHANGE IN NAME OF THE COMPANY

In terms of the Scheme, upon the effectiveness of the amalgamation of TVS Holdings Private Limited, the name of the Company viz., "Sundaram-Clayton Limited" was changed to "TVS Holdings Limited" and the same was approved by the Registrar of Companies on 17^th July 2023.

DEMERGER OF MANUFACTURING BUSINESS

The entire business of manufacturing non-ferrous gravity and pressure die castings i.e., Demerged Undertaking, as defined in the Scheme, of the Company was demerged, transferred and vested into Sundaram-Clayton Limited (formerly known as Sundaram-Clayton DCD Limited) ("Resulting Company") ("Demerger") effective 11^th August 2023 on going concern basis in accordance with the Composite Scheme. By virtue of Composite Scheme of Arrangement the following Companies were ceased to be a Subsidiary / Associate of the Company with effect from 10^th August, 2023:

1. Subsidiaries

- Sundaram-Clayton DCD Limited (now know as Sundaram-Clayton Limited), Chennai

- Sundaram-Clayton (USA) Limited, USA

- Sundaram Holding USA Inc, Delaware, USA

- Sundaram-Clayton GmbH, Germany (SCL GmbH)

2. Subsidiaries of Sundaram Holding USA Inc, Delaware, USA

- Green Hills Land Holding LLC, South Carolina, USA

- Components Equipment Leasing LLC, South Carolina, USA

- Sundaram-Clayton (USA) LLC, South Carolina, USA

- Premier Land Holding LLC, South Carolina, USA

3. Associates

- Sundram Non-Conventional Energy Systems Private Limited, Chennai.

The Company''s financials upto 10^th August 2023 encompass the operations of the Demerged Undertaking. All the assets and liabilities including the profits realised from Demerged Undertaking upto 10^th August 2023 have been transferred by the Company to Resulting Company.

Registration as Core Investment Company (CIC):

Consequent upon Demerger, the Company was left with only investments in Group Companies and trading business in Automative parts. This demerger resulted in TVS Holdings Limited becoming a Core Investment Company ("CIC").

Hence, the Company was registered as a CIC pursuant to the Certificate of Registration No N-07-00904 dated 14^th March, 2024 issued by the Reserve Bank of India (''RBI'') under Section 45-IA of the Reserve Bank of India Act, 1934 and Master Direction - Core Investment Companies (Reserve Bank) Directions 2016 as amended ("RBI Master Directions") to carry on the business of Non-Banking Financial Companies (NBFCs) without accepting public deposits.

The RBI vide its notification dated October 22, 2021 had introduced an integrated regulatory framework for NBFCs under "Scale Based Regulation (''SBR''), a Revised Regulatory Framework for NBFCs". The SBR framework encompasses different facets of regulation of NBFCs covering capital requirements, governance standards, prudential regulation, etc. Under the SBR framework, NBFCs are divided into four layers viz., top layer, upper layer, middle layer and base layer based on the size, activity and perceived riskiness. The Company being a CIC falls under the category of Middle Layer NBFC (''NBFC-ML'').

TVSHL holds equity investments in the following companies:

1. TVS Motor Company Limited ("TVSM"), Subsidiary

2. Emerald Haven Realty Limited ("EHRL"), Subsidiary

3. TVS Training & Services Limited ("TVS TS"), Associate

2. FINANCIAL SUMMARY AND HIGHLIGHTS

($ in Cr)
Particulars	Year ended 31.03.2024	Year ended 31.03.2023
Revenue from Operations	1,607.77	2,197.53
Other Income	38.79	9.19
Profit / (loss) before Depreciation, Exceptional items and Tax Expense	452.81	335.91
Less: Depreciation / Amortization / Impairment	37.62	99.94
Profit / (loss) before Exceptional items and Tax Expense	415.19	235.97
Add / (less): Exceptional items	(5.07)	90.72
Profit / (loss) before Tax Expense	410.12	326.69
Less: Tax Expense (Current & Deferred)	71.38	53.58
Profit / (loss) for the year	338.74	273.11
Other Comprehensive Income / (loss)	(2.66)	3.37
Total Comprehensive Income	336.08	276.48

* 2023-24 financials have been prepared giving effect to Composite Scheme of Arrangement amongst the Company and TVS Holdings Private Limited and VS Investments Private Limited and Sundaram-Clayton Limited (Formerly known as Sundaram-Clayton DCD Limited) and their respective shareholders and creditors as approved by the Honble National Company Law Tribunal, Chennai Bench vide its order dated 6^th March 2023. Further the Company has also obtained CIC registration on 14^th March 24. Hence, the figures of 2023-24 are not comparable with that of the previous year.

The Board does not recommend any further dividend for the year under consideration. The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy.

4. TRANSFER TO RESERVES

For the financial year ended 31^st March 2024 an amount of $ 67.75 Cr was transferred to Statutory Reserve in terms of Section 45-IC of the RBI Act.

5. COMPANY PERFORMANCE

Consequent to Demerger effective 11^th August 2023, the Company has been essentially a holding and investment company and does not have any other operations of its own. The Company''s revenue would primarily comprise of dividend income from investments held in group companies. More details about the Company and its investments are dealt elsewhere in this report.

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT ECONOMY OVERVIEW

India witnesses strong growth in fiscal 2024

India continues to maintain its position as one of the fastest-growing economies globally. The National Statistical Office (NSO) in its second advance estimates of national income estimated the real GDP to grow at a robust 7.6% on-year basis in fiscal 2024. This can be attributed to various factors such as demographic advantage, robust domestic demand, economic reforms, government''s capex push for manufacturing and infrastructure development, technological advancements, and digital push.

The Monetary Policy Committee (MPC) held rates steady throughout fiscal 2024. It also held on to its stance of withdrawal of accommodation as it steadfastly pursues two goals - complete transmission of its 250 basis points (bps) rate hike in this cycle; and durably aligning head line inflation with its target of 4%. Inflation based on the Consumer Price Index (CPI) and core inflation eased by the end of this fiscal.

IMF, in its January 2024 economic outlook update, revised its India economic growth estimate upwards in real terms for the calendar year 2023 to 6.7% from previous 6.3% estimate in October 2023, citing momentum from resilient domestic demand. Further, the growth forecast for fiscal 2025 also witnessed an increase at 6.8% from the previous 6.3% forecast in October 2023.

3. DIVIDEND

The Board of Directors of the Company (the Board) at their meeting held on 21^st March 2024, declared an interim dividend of $ 94/- per share (1,880%) on 2,02,32,104 equity shares of $ 5/- each for the year FY24 absorbing a sum of $ 190 Cr. The same was paid on 15^th April 2024.

India to continue as one of the fastest growing economies in the world After a strong 7.6% growth this fiscal, India will continue to be the fastest growing economy in the world with real GDP growth estimated

at 6.8% in fiscal 2025. Budgetary support from the government, strengthening of domestic economic activities, improvement in household consumption, improved business sentiments, rising consumer confidence, expected uptick in private capex healthy balance sheet of banks and corporates and rising integration in global supply chain will lead economic growth next fiscal.

The transmission of rate hikes effected by the Monetary Policy Committee (MPC) of the RBI from 4.0% in April 2022 to 6.5% in February 2023 continues and is likely to weigh in next fiscal. A lower fiscal deficit will mean the fiscal impulse to growth will be curtailed. However, the nature of spending will provide some support to the investment cycle and rural incomes. A normalization of the net tax impact on GDP is also expected next fiscal. Moreover, continued disinflation will support the purchasing power of the consumers. Government spending in rural development, healthy rabi sowing and good kharif output while assuming normal spell of monsoon next fiscal will improve agricultural incomes. With healthy agricultural output, food inflation is also expected to tone down from an estimated 7.4% in fiscal

2024. Moreover, gradual pick-up in private sector capex will make investment growth more broad-based.

As per the RBI Monetary Policy Committee report, the real GDP growth in fiscal 2025 is expected to be 7.0%, led by recovery in rabi sowing, sustained profitability in manufacturing and underlying resilience of services. Whereas IMF projects India''s growth at 6.5% in 2024 and

2025, reflecting resilience in domestic demand.

• With a focus on fiscal consolidation, the government aims to reduce the fiscal deficit to 5.1% of GDP next fiscal from 5.8% in the current fiscal through reduced revenue expenditure thrust and marginally better tax collections. Further, the government is aiming at bringing down the fiscal deficit to below 4.5% of GDP by fiscal 2026.

• Focus on investments rather than consumption push enhancing the productive capacity of the economy.

• Policies aimed towards greater formalisation of the economy, which are bound to lead to an acceleration in per capita income growth.

INDUSTRY OVERVIEW

Two-wheeler industry

Two-wheelers comprising of motorcycle, scooter, mopeds, and EVs witnessed estimated 9-11% growth in sales in fiscal 2024. Improvement in sales was driven by the recovery of motorcycle sales as rural and semi urban markets improve supported by healthy crop prices, with incomes finally catching up with hike in vehicle prices and pent-up replacement demand. Going forward, volumes are expected to be driven by recovery in scooter sales as urban income sentiments improve and EV penetration increases. Elections in fiscal 2025 is anticipated to raise financial activities, particularly in rural areas, which is projected to boost the demand for two-wheelers. Moreover, above normal monsoon prediction is expected to support demand for motorcycles segment positively.

Note: E = Estimated, P = Projected; GDP growth is based on constant prices, GDP growth till FY23 is actuals. GDP Estimates for fiscals 2023-2024is based on NSO Estimates and 2024-2025 is projected based on CRISIL MI&A estimates; and that for fiscals 2026-2029 based on IMF estimates; Source: NSO, CRISIL MI&A, IMF (World Economic Outlook - October 2023 update)

Growth in real GDP is expected to be also supported by the following factors largely on account of the impact of the 2024-25 Interim Budget:

• Increase in total capital expenditure by 17.7% year-on-year from revised estimate of $12.7 lakh crores in fiscal 2024 to budgeted estimate of $ 15.0 lakh crores in fiscal 2025 would support growth in the economy, especially in a year where the Indian economy is expected to see a cyclical slowdown.

• The government continues its endeavour to revive rural demand as it increased the budget allocation to Ministry of Rural Development by 13% in interim budget 2024-25 to $ 1.78 lakh crores.

Healthy economic growth, and offices continuing with hybrid working model kept the demand for residential real estate steady in fiscal 2024, especially for bigger and premium residences. The volume is estimated to have increased at 4-6% despite rise in interest rates and capital values. This demand is amid inventory at comfortable levels of more than three years of sales on an average as against 4.5 years before the pandemic. Developers, therefore, are on a stronger footing with greater confidence on new launches getting absorbed in line with incremental demand. Healthy demand emanating from smaller cities, attractive interest rates, government impetus on housing and financiers'' focus on developer finance will continue to support the industry.

Retail lending

The retail credit (includes Housing finance, Vehicle Financing, Gold Loans, Education Loans, Consumer Durables, Personal loans, credit cards and microfinance) in India is estimated at Rs. 75 trillion, as of fiscal 2024 which rapidly grew at a CAGR of 15.2% between Fiscals 2019 and 2024. NBFC''s retail portfolio grew at 21% year-on-year in fiscal 2024 and accounts for ~48% share in overall NBFC credit as of fiscal 2024. Going forward, growth in the NBFC retail segment is expected at 15-17% in Fiscal 2025 with continued focus of NBFCs on their retail business and multiple players announcing plans to reduce wholesale exposure. The retail segment''s market share is expected to marginally increase in Fiscal 2025.

Risk Management

At your Company, we prioritize a comprehensive Risk Management Policy tailored to our business plan and risk appetite. The Board of Directors has approved a Risk Management Policy that outlines the risk strategy, approach, mitigation plans, liquidity risk management, and asset-liability management. Our approach focuses on identifying, assessing, monitoring, and addressing a wide range of risks while mitigating and managing their combined impact effectively.

As a registered CIC, our operations are centered on investments, loans, and securities within our group companies. Our Risk Management Policy aligns closely with our business operations, aiming to cultivate a risk intelligent culture that facilitates informed decision-making and enhances resilience against adverse developments. We are committed to seizing opportunities to create value for all stakeholders.

To ensure robust risk oversight, we have established a dedicated Risk Management Committee in compliance with SEBI Listing Regulations and RBI Master Directions. This Committee diligently monitors risks and implements necessary mitigating actions. Additionally, our Audit

Committee conducts detailed reviews of risks concerning internal controls, compliance, and systems. All risks, including those related to investments, are thoroughly examined during Board of Directors meetings.

Our Risk Management Policy reflects our commitment to proactively manage risks, uphold regulatory standards, and safeguard the interests of our stakeholders. By fostering a culture of risk awareness and prudent decision-making, we strive to navigate challenges effectively while maximizing opportunities for sustainable growth.

Risk Exposure of the company and its mitigation is represented in the table below:

Risk Category	Description	Risk Identification	Risk Mitigation Measures
Financial Risk	Risk related to financial losses or instability in the market	Identifying risks related to raising capital, meeting cash flow needs, and monitoring capital adequacy	Meeting capital requirements through own or borrowed funds, monitoring investments for cash flow needs, and ensuring dividend income
Governance Risk	Risk associated with ineffective governance structures and practices	Identified through internal audits, compliance checks, and governance assessments	Implementing strong governance policies, transparency, and accountability mechanisms
Compliance Risk	Risk of noncompliance with laws, regulations, or industry standards	Identified through regular compliance audits, monitoring legal changes, and industry updates	Establishing robust compliance procedures, training programs, and monitoring systems
Market Risk	Risk arising from fluctuations in market conditions and factors affecting investments	Identified through market analysis, economic indicators, and industry trends	Diversification of investments, hedging strategies, and staying informed about market changes
Reputational Risk	Risk related to damage to the organization’s reputation and public perception	Identified through customer feedback, media monitoring, and stakeholder surveys	Building a strong brand image, crisis management plans, and proactive communication strategies

Opportunities and Threats

The Company, being a CIC, holds significant investments in equity shares of TVS Motor Company Limited ("TVSM") and Emerald Haven Realty Limited ("EHRL"), as a result of which it remains less affected by the overall environment in the NBFC Sector.

The Company recognizes that there is a significant potential for increase in demand in automotive and real estate sectors in India. TVSM, one of the major investments of your Company and has domestic as well as overseas operations to reap benefits in the long term. As a result of which, the Company is looking forward for a sustainable growth in its investee Companies in the coming years which would enhance the shareholders value.

Risks and Concerns

The operations of TVS Motor Company Limited ("TVSM") and Emerald Haven Realty Limited ("EHRL") have a major impact on the profitability of your Company.

The Company continuously evaluates its investments in group companies to ensure that the same meets the objective of ensuring maximisation of value to all its stakeholders in a prudent manner.

The Company expects to make full use of the growth opportunities available to it as a CIC, however, the challenge remains on being able to leverage these initiatives to carve out a space in the competitive industry, within the regulatory and compliance framework.

Human Resource Development

Consequent to the Demerger, your Company continues to employ sixty eight permanent employees and six non-permanent employees to look after the business and administration of the Company.

Given the nature of business your Company is engaged in, there have been no material developments in Human Resource and Industrial Relations front. The information on the number of persons employed have been provided in Business Responsibility and Sustainability Report (BRSR) (Annexure V).

Internal Control Systems and their adequacy

The Board holds the responsibility for assessing and approving the efficiency of internal controls, including financial, operational, and compliance aspects. The Company has implemented a robust and sufficient internal control system to safeguard its assets against loss and ensure proper authorization and recording of all transactions.

The internal control system is continuously enhanced and evaluated for effectiveness. The information provided to management is accurate and prompt. The Company prioritizes the reliability of financial reporting and adherence to legal and regulatory requirements. To strengthen controls, the Company utilizes technology and centralizes processes, enhances monitoring, and maintains effective tax and treasury strategies.

The Audit Committee oversees the effectiveness of internal controls, employing new technologies that influence financial controls and risk management.

The Company has established an Internal Financial Control framework, encompassing internal controls over financial reporting, operating controls, and an anti-fraud framework. The framework undergoes regular reviews by management and is tested by both an independent audit firm and the internal audit team. The results are presented to the Audit Committee. Based on periodic testing, the framework is fortified to ensure the adequacy and effectiveness of Internal Financial Controls.

Regulations

In August 2020, the Reserve Bank of India (RBI) revised the framework for Registered Core Investment Companies (CICs) for addressing systemic risks carried by inter-connectedness of CICs and their group companies. The Revised Framework made it mandatory for all the Systemically Important CICs to set up a policy for ascertaining the ''fit and proper'' status of directors on a continuous basis and periodically furnish a report on the same to RBI to increase oversight over CICs and ensure adherence to good corporate governance.

To enhance disclosure standards, the Revised Framework of RBI also mandated CICs to prepare consolidated financial statements in accordance with the provisions of Companies Act, 2013, to provide a clear view of the financials of the group, and maintain a functional website with annual report, corporate governance report, management discussion and analysis, along with adequacy of internal controls.

RBI also restricted the number of layers of CICs within a group to two, irrespective of the extent of direct or indirect holding/ control exercised by a CIC in the other CIC.

The Company has ensured adherence to all the applicable regulatory requirements and guidelines relevant to its business processes.

7. INVESTMENT / DISINVESTMENT IN SUBSIDIARIES AND ASSOCIATE(S)

During the year under review, the Company invested in the Equity Share Capital of the following Subsidiaries / Associate(s):

S	Name of the Subsidiary /	% of Equity Shares
No	Associate Company	invested / (disinvested)
1	Emerald Haven Realty Limited	22.86%
2	TVS Credit Services Limited	(2.30%)

Further, details of investment in Subsidiaries / Associate(s) are stated in the notes to the Financial Statements forming part of this Annual Report.

8. KEY FINANCIAL RATIOS

The financials for FY 2023-24 have been prepared giving effect to Composite Scheme of Arrangement. Therefore the details of significant changes in key financial ratios in terms of Regulation 34 of the Listing Regulations have not been disclosed as the figures of 2023-24 are not comparable with that of the previous year. The details of Key Financial Ratios have been disclosed in Note No. 40 to the Standalone Financial Statements.

9. DEBENTURES

NON-CONVERTIBLE DEBENTURES (NCDS)

Pursuant to the Composite Scheme of Arrangement as approved by the Hon''ble NCLT, Chennai vide its order dated 6^th March 2023 and upon Part V of the Scheme becoming effective i.e., 11^th August 2023, Listed Non-convertible debentures ("NCDs") worth $100 Crores issued at 7.65% p.a. which form part of the Demerged Undertaking of the Company have been transferred to the Resulting Company viz., Sundaram-Clayton Limited (formerly known as Sundaram-Clayton DCD Limited). The NCDs are listed with the National Stock Exchange of India Limited ("NSE").

10. REDEMPTION OF NON-CONVERTIBLE REDEEMABLE PREFERENCE SHARES (NCRPS)

Pursuant to the Scheme, the Board had on 25^th March 2023 allotted 234,69,21,860 9% Cumulative Non-Convertible Redeemable Preference Shares (“NCRPS”) of the Company by way of bonus, i.e., 116 NCRPS of face value of $ 10 each fully paid up, for every 1 equity share of $ 5 each fully paid up, to each equity shareholder of the Company. Further, the said NCRPS was listed with the BSE Limited and the National Stock Exchange of India Limited (collectively referred to as “Stock Exchanges”) effective 19^th June 2023. The date of maturity of the said NCRPS is 25^th March 2024.

Further, as part of the Scheme, VS Investments Private Limited (“Transferor Company 2”), holding 147,38,90,346 NCRPS of $ 10 each fully paid up held in the Company, was amalgamated with the Company effective 4^th August 2023. On the account of the said amalgamation 147,38,90,346 NCRPS of $ 10 each fully paid up in the Company was cancelled. Post the said cancellation the total outstanding NCRPS was 87,30,31,514 NCRPS of $ 10 each.

During the year, the Company redeemed and paid in full the redemption amount of $ 10 per NCRPS, amounting to $ 873.03 Cr along with coupon payment at the rate of 9% per annum ($ 78.57 Cr) on the redemption value to the eligible NCRPS holders of the Company as on the record date i.e., 13^th March 2024. The NCRPS were redeemed and extinguished effective 25^th March 2024.

Promoter Reclassification

During the year, the Company had received a letter from T.V. Sundram Iyengar & Sons Private Limited, member of Promoter and Promoter Group of the Company seeking reclassification from the ''Promoter'' category to ''Public'' category shareholders under Regulation 31A of the Listing Regulations. Consequent to the same, the Company has obtained the approval of the shareholders of the Company through Postal Ballot on 29^th March 2024 and has filed necessary applications to the Stock exchanges. The approval of Stock exchanges for Promoter Reclassification is awaited.

11. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Committed to social responsibility, the Company works to drive positive change in rural communities through the Srinivasan Services

Trust (SST). SST prioritizes health, education, environmental wellbeing, and economic empowerment in these areas. The core approach centres around total community involvement, ensuring all stakeholders participate and that projects are sustainable in the long run.

This participation is central to SST''s success. SST has developed a mature model that emphasizes community involvement in every project, even adapting best practices from Total Quality Management (TQM) to the rural development landscape. This results in programs and structures that foster not only growth but also long-term sustainability for these communities.

SST fosters integrated, holistic, and participatory village development, working together with both communities and the Government. This collaborative approach ensures sustainable progress in the villages supported. Over the past 28 years, SST has empowered over 60,000 women by organizing them into Self Help Groups (SHGs).

Furthermore, SST has implemented over 350 water conservation projects, including desilting tanks and irrigation channels, and has repaired and renovated over 2,600 pieces of rural government infrastructure.

Looking ahead, SST is committed to continuous improvement.

In the last few years SST has stitched partnerships with several NGOs and Foundations to work on specific areas of water, health and hygiene, capacity building of SHGs, quality education and livelihoods through effective livestock management and entrepreneurship.

SST has won the following awards in FY24:

• Best CSR and Sustainability Practices Award 2022-23 (awarded in 2023-24) by Asian Centre for Corporate governance and Sustainability.

• Economic Times Human Capital Awards 2023 - Winner (Gold) in Change Management

• CSR Journal Excellence Award 2023 - Special commendation for Water Conservation work in Tiruvannamalai.

• Maharashtra CSR Awards 2023 by India CSR - for Silage: Livestock Development

• CII National HR Circle Award for Best practices - Winners in 2 Platinum in Change Management & Digitization.

• NHRD 12^th Showcase Best Corporate HR Practice - Runners-up.

CSR activities have already been textured into the Company''s value system through SST, established in 1996 with the vision of building self reliant rural community.

Over 28 years of service, SST has played a pivotal role in changing lives of people in rural India by creating self-reliant communities that are models of sustainable development.

The Committee formulated and recommended a CSR Policy in terms of Section 135 of the Companies Act, 2013 (the Act, 2013) along with a list of projects / programmes to be undertaken for CSR spending in accordance with the Companies (Corporate Social Responsibility

Policy) Rules, 2014. The projects / programmes undertaken by SST and other eligible Trusts are falling within the CSR activities as specified under Schedule VII to the Act, 2013.

Based on the recommendation of the CSR Committee, the Board has approved the projects / programmes carried out as CSR for an amount of Rs. 2 Cr for undertaking similar programmes / projects constituting more than 2% of the average net profits of the Company, made during the three immediately preceding financial years, towards CSR spending for the financial year 2023-24 and the Company has met the CSR spending through SST. Mr K Gopala Desikan, Director and Group Chief Financial Officer of the Company has also ensured the spending through SST for financial year 2023-24.

The work, SST has been doing, has matured into a model centered on community participation in all its projects. SST''s focus is to bring about sustainable development in villages. The key focus areas are women empowerment, repairing and renovating the village government infrastructure like the balwadis, primary schools, health centres and veterinary centres, creation of water conservation structures, desilting of water bodies and preserving the environment. SST encourages the community to alter their attitudes and take ownership of changes that bring about lasting development.

To bring in expertise in specific intervention areas like education, health and hygiene and livelihoods through livestock, SST is working in collaboration with organizations like Agastya International Foundation, Villmart, Navsahyog Foundation, Sankara Eye Foundation, Gramalaya and Shreeja Mahila Milk Producers Company Limited.

All of the projects undertaken through SST, are within the limit of $ 1 crores individually and do not require impact assessment. However, SST is working with Tata Institute of Social Sciences (TISS) and Deloitte to carry out social impact studies.TISS is working to study the impact created on livelihoods by SST in rural Pabal area in Pune district, Maharashtra.

Deloitte is working to study the impact created on livelihoods by NABARD''s wadi program. This was implemented by SST in Javadhu hills in Tamil Nadu.

As required under Section 135 of the Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the annual Report on CSR, containing the particulars of the projects / programmes approved and recommended by the CSR Committee and approved by the Board for the financial year 2023-24 are given by way of Annexure III attached to this Report. It may also be noted that the CSR Committee has approved the projects or programmes to be undertaken by the SST and other eligible trusts for the year 2024-25, preferably in local areas including the manner of execution, modalities of utilisation of funds and implementation schedules and also monitoring and reporting mechanism for the projects or programmes, as required under the Companies Amendment Act, 2020.

12. RESOURCE MOBILISATION

During the financial year under review, no funds have been mobilised by way of Non-Convertible Debentures (NCD). Short Term loan of $ 550 Cr was taken for operational purpose. The Board at its meeting

held on 21^st March 2024, approved the proposal to raise funds upto a sum of $ 650 Cr by way of issuance of Non-Convertible Debentures (NCD) during the financial year 2024-25.

13. CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Company''s objectives, projections, estimates and expectations may be ''forward looking statements'' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations include, amongst others, economic conditions affecting demand / supply and price conditions in the domestic and overseas market in which the Company operates, changes in the Government Regulations, Tax Laws and Other Statues and incidental factors.

14. DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 (the Act, 2013) with respect to Directors'' Responsibility Statement, it is hereby stated -

i. that in the preparation of annual accounts for the financial year ended 31^st March 2024, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

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

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

iv. that the Directors had prepared the annual accounts for the financial year ended 31^st March 2024 on a "going concern basis";

v. that the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. that 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.

15. FINANCIAL PERFORMANCE OF SUBSIDIARIES & ASSOCIATES

Post amalgamation of TVS Holdings Private Limited ("TVSHPL") with the Company, pursuant to the Composite Scheme of Arrangement as approved by the Hon''ble NCLT, Chennai vide its order dated 6^th March 2023, the subsidiaries of TVSHPL viz., Emerald Haven Realty Limited ("EHRL") and its Subsidiaries / Associate have become Subsidiaries / Associate of the Company effective 16^th June 2023., except those Companies incorporated post acquisition.

Acquisitions

During the year under review, the Company has acquired the additional stake in Emerald Haven Realty Limited (EHRL) on 30^th June 2023 (11.20%) and 5^th January 2024 (11.66%) aggregating to 22.86% from the existing shareholders of EHRL and the Company holds 89.26% of equity capital in EHRL as at 31^st March 2024. Post 31^st March 2024, the Company has acquired additional stake of 10.74% in Emerald Haven Realty Limited ("EHRL"), by way of purchase of 2,74,43,333 equity shares of $ 10/- each from the existing shareholders viz., Sandwood Investments Limited ("Sandwood") on 3^rd May 2024. Consequent to the above, the shareholding of the Company in EHRL increased to 100%, thereby EHRL became a wholly owned subsidiary of the Company effective 3^rd May 2024.

During the year under review, the Company had incorporated a wholly owned subsidiary namely viz., TVS Holdings (Singapore) Pte Limited effective 11^th January 2024.

Disinvestments

During the year under review, the Company has divested its entire shareholding of 2.30% in its subsidiary company viz., TVS Credit Services Limited.

As on 31^st March 2024, the following companies and bodies corporate are the subsidiaries / associates of the Company:

Subsidiaries:

1. TVS Motor Company Limited (TVSM), Chennai

2. Emerald Haven Realty Limited (EHRL), Chennai

3. TVS Holdings (Singapore) Pte Limited (w.e.f. 11^th January 2024)

Subsidiaries of TVSM

1. TVS Credit Services Limited (TVS CS), Chennai

2. Sundaram Auto Components Limited (SACL), Chennai

3. TVS Digital Limited, Chennai

4. TVS Motor Services Limited, Chennai

5. TVS Electric Mobility Ltd, Chennai

6. PT TVS Motor Company Indonesia, Jakarta.

7. TVS Motor (Singapore) Pte. Limited, Singapore (TVSM Singapore)

8. TVS Motor Company (Europe) B.V., Amsterdam

Subsidiaries of EHRL

1. Emerald Haven Projects Pvt Ltd

2. Happiness Harmony Property Developers Pvt Ltd

3. Emerald Haven Property Development Ltd

4. Emerald Haven Realty Developers (Paraniputhur) Pvt Ltd

5. Emerald Haven Development Ltd

6. Emerald Haven Life Spaces (Radial Road) Ltd

7. Emerald Haven Town & Country Pvt Ltd

8. Emerald Haven Towers Limited

9. Emerald Haven Residences Private Limited (w.e.f. 19^th June 2023)

10. Emerald Haven Properties Private Limited (w.e.f. 8^th January 2024)

11. Emerald Haven Builders Private Limited (w.e.f. 9^th January 2024)

Subsidiaries of TVS CS

1. Harita ARC Private Limited, Chennai

2. TVS Housing Finance Private Limited, Chennai

3. Harita Two-wheeler Mall Private Limited, Chennai

Subsidiaries of TVSM Singapore Pte. Limited

1. The Norton Motorcycles Co Limited, UK

2. Swiss E-Mobility Group (Holding) AG, Switzerland (SEMG)

3. The GO Corporation(GO AG), Switzerland

4. TVS Digital Pte Ltd, Singapore

5. EBCO Limited, UK

6. Celerity Motor GmbH, Germany

Subsidiaries of GO AG

1. EGO Movement, Stuttgart GmbH, Germany

Subsidiaries of SEMG

1. Swiss E-Mobility Group (Schweiz), Switzerland

2. Colag E-Mobility GmbH, Germany

3. Alexand''Ro Edouard''O Passion Velo Sari, Switzerland

Associate Company

1. TVS Training & Services Limited, Chennai Associates of TVSM

1. Ultraviolette Automotive Private Limited, Bengaluru

2. Tagbox Solutions Private Limited, Bengaluru (upto 30^th March 2024)

3. DriveX Mobility Private Limited, Coimbatore

4. Indian Foundation for Quality Management, Bengaluru (w.e.f. 15^th February 2024)

Associates of EHRL

1. Emerald Haven Housing Private Limited, Chennai (w.e.f. 24^th October 2023)

Associates of TVSM Singapore Pte. Limited:

1. Killwatt GmbH, Germany

2. ION Mobility Pte. Limited, Singapore (w.e.f. 14^th March 2024) Associates of TVS Digital Pte Ltd:

1. Tagbox Pte Limited, Singapore

2. Predictronics Corp., USA

3. Scienaptic Systems Inc., USA

4. Altizon Inc, USA

SUBSIDIARIES PERFORMANCE:

TVS Motor Company Limited (TVSM)

TVSM is engaged in the business of manufacturing two and three-wheelers. During the year 2023-24, TVSM''s total revenue including other income was $ 31,925 Cr and earned a profit after tax of $ 2,083 Cr. TVSM for the year 2023-24, declared and paid an interim dividend of $ 8 per share (800%) absorbing a sum of $ 380 Cr on 47,50,87,114 equity shares of $ 1 each.

Emerald Haven Reality Limited (EHRL)

During the year, Emerald Haven Reality became the subsidiary of TVSHL. EHRL registered a sales booking value (BV) of $ 1,331 Cr, with a growth of 43%, backed by strong sales across new launches and sustenance projects. EHRL had worked on various value engineering measures to control operating and fixed costs, which helped in the operating performance of the Company.

TVS Holdings (Singapore) Pte Limited

The Company was incorporated on 11^th January 2024 for carrying out overseas business acquisitions and investments.

TVS Credit Services Limited (TVS CS)

TVS CS is the retail finance arm of TVSM for financing of two wheelers, used cars, used and new tractors, used commercial vehicles, consumer durables, digital finance products, emerging and corporate business loans and personal loans. Along with these, it started offering gold loans during this FY. TVS CS primarily caters to self-employed, new to credit borrowers in the semi-urban and rural areas in India.

During the year 2023-24, TVS CS''s overall disbursements registered at $ 25,018 Cr as compared to $ 21,652 Cr in the previous year registering growth of 16%.

The book size of TVS CS registered a robust growth of 26% and is presently at around $ 25,900 Cr. Total income during the FY24 grew by 40% at $ 5,796 Cr from $ 4,152 Cr during the FY23. The PBT grew by 49% at $ 763 Cr as against $ 512 Cr during the previous year.

TVS CS raised $ 380 Cr from PI Opportunities Fund I Scheme II, an alternative investment fund controlled by Premji Invest Limited. PI Opportunities Fund had made an aggregate investment of $ 828.52 Cr in TVS CS as a combination of primary and secondary investment.

The following companies are the subsidiaries of TVS CS.

1. Harita ARC Private Limited, Chennai

2. TVS Housing Finance Private Limited, Chennai

3. Harita Two-wheeler Mall Private Limited, Chennai

All the above subsidiaries are yet to commence their operations.

Sundaram Auto Components Limited (SACL)

SACL is a wholly owned subsidiary of TVSM. SACL manufactures plastics components used in the automobile industry. It has manufacturing plants located at Chennai and Hosur in Tamil Nadu,

Mysore in Karnataka, Bhiwadi in Rajasthan, Nalagarh in Himachal Pradesh, and Sanand in Gujarat.

The total income of SACL was $ 765 Cr in the current year as against $ 787 Cr in the previous year 2022-23.

SACL earned a profit before tax of $ 29 Cr after incurring a NIL exceptional cost during the year 2023-24 as against profit of $ 24 Cr in the previous year after exceptional cost of $ 1.9 Cr. Exceptional cost includes separation cost.

During the year under review, SACL has distributed a sum of $ 310 Crores to the Company towards extinguishment of 3,26,31,578 equity shares held by the Company, consequent to the reduction of share capital under Section 66 of the Companies Act, 2013 as approved by the Hon''ble National Company Law Tribunal, Chennai.

SACL declared a dividend of $ 1.64/- per share on the equity shares for the year ended 31^st March 2024 absorbing a sum of $ 1.96 Cr.

TVS Digital Limited (TVS Digital)

TVS Digital Limited (Formerly known as TVS Housing Limited) is a wholly owned subsidiary of TVSM.

The name and the main objects of the Company was changed during the FY 2023-24 from TVS Housing Limited to TVS Digital Limited to reflect its new objects and carry on the business activities relating to Digital / Information Technology and other related services.

TVS Motor Services Limited (TVS MS)

TVS MS was initially the investment SPV of TVSM, for funding TVS Credit Services Limited (TVS CS).

TVS MS now holds 0.48% only in TVS CS and TVS MS continues to be a wholly owned subsidiary of TVSM.

TVS Electric Mobility Ltd, Chennai (TVSEM)

The Company was incorporated on 13.12.2021 to undertake Electric Mobility business. The entire shares of TVSEM have been subscribed by TVSM and hence, TVSEM is a wholly owned subsidiary of TVSM. The Company is yet to commence its operations.

TVS Motor Company (Europe) B.V.

TVS Motor Company (Europe) B.V. was incorporated with a view to serve as special purpose vehicle for making and protecting the investments made in overseas operations of PT. TVS Motor Company Indonesia.

TVS Motor (Singapore) Pte. Ltd

TVS Motor (Singapore) Pte Limited, a wholly owned subsidiary of TVSM.

During the year, TVSM has invested a sum of SGD 199.50 Mn in the ordinary shares of SGD 1/- each of TVS Motor (Singapore) Pte Limited.

The Company serves as a special vehicle for investments made in overseas subsidiaries / associates.

TVS Digital Pte Ltd, Singapore

TVS Digital Pte Limited, Singapore is a wholly owned subsidiary of TVS Motor (Singapore) Pte Limited. The Digital start-up offers a range of solutions across their Auto-tech and Fintech platforms and has secured clients in Bangladesh, Bolivia, India, Indonesia, Nepal, Philippines and Singapore. The product offerings centre around AI Driven Credit Decisioning and Collections in Fintech and a suite of Sales acceleration and Consumer Experience enhancements apps in the Auto-tech platform that is also finding applicability in Real Estate and B2B businesses. Revenue streams have commenced, and the team is now focused on scaled profitable growth to help deliver focused unit economics objectives. The Company has recently established an entity in India as well which is focused on IT professional services and is also scaling rapidly.

PT. TVS Motor Company Indonesia (PT TVS)

During the financial year, PT TVS two-wheeler sales grew by 37%, standing at 0.11 million units as against 0.08 million units during the previous financial year, and three-wheeler sales is at 7000 units as against 19,000 units during the previous financial year. During the year PT TVS reported Operating EBITDA of $ 8 Mn as against $ 8.3 Mn during the last year.

Swiss E-Mobility Group (Holding) AG (SEMG)

The Swiss E-Mobility Group (SEMG), along with its subsidiaries Swiss E-Mobility Group (Schweiz) and Colag E-Mobility GmbH, operates under the full ownership of TVS Motor (Singapore) Pte Ltd. This organizational structure supports SEMG''s strategic initiatives across the European markets, particularly focusing on the e-bike segment.

SEMG is strategically expanding its footprint in Europe, aiming to capitalize on the region''s status as the second largest e-bike market after China. The company is enhancing its presence through a portfolio of both premium and technologically advanced brands. As a leading provider in the DACH region (Germany, Austria, and Switzerland), SEMG operates the largest pure-play e-bike retail chain, m-way, with new expansions including two stores in Austria, bringing their total to 35 physical stores across Switzerland and Austria. Additionally, SEMG maintains a robust online presence through two e-commerce platforms.

With a diverse e-bike brand portfolio like Cilo, Simpel, Allegro, and Zenith-Bikes, SEMG has developed a strong omnichannel distribution network. This not only enhances its market presence but also aligns with consumer aspirations within the e-mobility sector.

In FY 2023-24, SEMG reported revenues of $ 76.6 million, yet faced a loss of $ 25.4 million, mainly due to challenging conditions in the European e-bike market. Holding a dominant position with approximately 20% market share in Switzerland, SEMG stands as the region''s leading provider. For 2024, the company is strategically focusing on reaching profitability by improving operational efficiencies and expanding its B2C (both offline and online) and B2B segments. SEMG is currently piloting the B2C offline model in Germany and Austria and is investing in the introduction of a B2B e-bike brand portfolio.

SEMG is leveraging emerging trends in the personal mobility sector by focusing on various e-bike categories, including e-city, e-urban, e-trekking, e-mountain, and e-cargo bikes. As e-bikes gain recognition for their sustainability and user-friendliness, the European market is experiencing increased regulatory backing and consumer uptake. E-bikes currently make up about 17% of all bicycles in Europe, with an expected annual growth rate of approximately 8%, signalling significant market opportunities. The global e-bike industry is projected to reach $ 25 billion within the next five years.

In conclusion, SEMG''s strong market presence and strategic initiatives highlight its capability to carve out a distinct niche in the European e-bike industry. By concentrating on enhancing operational efficiencies and expanding its market reach, SEMG is well-positioned to transform into a profitable entity, all while contributing to the advancement of sustainable transportation solutions.

The GO Corporation, Switzerland (the GO AG)

In September 2021, TVSM acquired majority stake in the GO AG, Switzerland and its subsidiary EGO Movement through TVS Motor (Singapore) Pte Ltd. EGO Movement is a Swiss technology company providing innovative mobility solutions through a portfolio of e-bikes, e-cargo bikes and matching accessories. The Company has a strong presence in Switzerland, Austria and Germany with customer-centric products, a unique omnichannel network and a visionary team at its helm.

The GO Corporation and its subsidiaries have a strong presence in Europe with customer-centric products and a unique omnichannel network. In CY23, GO Corporation group reported a revenue of CHF 4.9 Mn as against CHF 4.6 Mn during CY22. With the further expansion / upgrade of retail network, and expansion of e-commerce channels along with the recovery in the economy we expect GO Corporation to do better in the year 2024.

Over the past decade, the personal mobility landscape has evolved significantly with the global sustainability agenda, increasing urbanisation and advancement in battery technology.

EGO Movement''s product portfolio focuses on delivering sustainable products with the latest technology and stylish designs. A powerful battery is blended harmoniously into the frame, whose ergonomic design allows for a comfortable upright sitting position. In addition, EGO Movement''s connectivity platform is enhancing security and convenience for the vehicle''s user with smart features such as keylessgo, GPS location with theft alarm and access-sharing. The unique and innovative design philosophy has earned the Company multiple awards, including the prestigious Red Dot Award and in 2022 the German Brand Award.

This acquisition is in line with the Company''s commitment towards electrification and the broader sustainability agenda for building an aspirational product portfolio while nurturing sustainable and scalable brands. EGO Movement is a Swiss technology company providing innovative mobility solutions through a portfolio of e-bikes, e-cargo bikes and matching accessories.

EBCO

In April 2022, TVSM acquired a 70% share in EBCO ltd through TVS Motor (Singapore) Pte Ltd. a British Company providing mobility solutions through E-Bikes, across the Adventure, Urban and City bikes segments.

EBCO offers innovative and high-quality e Bikes in the UK region. During FY24, EBCO reported a revenue of GBP 0.8 Mn as against GBP 0.5 Mn during FY23.

2023 saw a complete revamp of the range to update and modernise the offering providing a premium quality product at affordable pricing to hit the volume market. A new sales team was onboarded in Q3. UK market was impacted on account of overall market sentiments and huge accumulation of stock in the market.

2024 will be first full trading period with product available ready for the season''s start. There was a small existing network of retail partners in place, and the addition and expansion of retail partnerships is developing to obtain national coverage, whilst working and developing the omnichannel also.

With the new products & strong dealerships planned, EBCO is placed in a good position to obtain good market share.

The Norton Motorcycle Co Limited, UK

Since the acquisition of Norton in 2020, the Company has built a strong foundation by setting up a state-of-art facility, a new engineering and design centre to further the growth of Norton. During FY24, Norton has launched special editions to celebrate 125 years of brand legacy.

Overall, the premium and super-premium markets are expected to grow consistently, and Norton is preparing its portfolio to become a strong player with a series of products getting closer to market readiness. The Company will continue to invest during the upcoming 8 quarters. The Company''s engineering, design & development and supply chain capabilities will be leveraged to ensure high quality products are delivered in a cost-efficient and timely manner.

ASSOCIATE COMPANY

TVS Training and Services Limited (TVS TS)

TVS TS is engaged in the business of establishing and providing vocational training to various industries and is participating in the National Skill Development Projects. During the year, TVS TS earned an income of $103.59 Cr and profit after tax for the year ended 31^st March 2024 was $ (0.57) Cr.

16. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 and Regulation 33 of the Listing Regulations along with a separate

statement containing the salient features of the financial performance of subsidiaries / associates in the prescribed form. The audited consolidated financial statements together with the Auditors'' Report form part of the Annual Report.

The financial statements of the subsidiary companies will be made available to the Shareholders, on receipt of a request from any Shareholder. The financial statements of the subsidiaries have also been placed on the website of the Company. This will also be available for inspection by the Shareholders at the Registered Office during business hours as mentioned in the Notice of AGM.

The consolidated Profit Before Tax of the Company and its subsidiaries & associates amounted to $ 2,786.42 Cr for the financial year 2023-24 as compared to $ 2,013.32 Crores in the previous year.

17. DIRECTORS & KEY MANAGERIAL PERSONNEL

Special Recognition to Mr Venu Srinivasan, Chairman

During the year under review, Mr Venu Srinivasan, was conferred with an "Outstanding Institution Builder" Award at the 13^th Managing India Awards - recognizing his exceptional vision and leadership in building an organization and who has been the driving force of an organization.

Mr Venu Srinivasan also received the "Lifetime Achievement Award" at the EY Entrepreneur of the Year 2023 in recognition of his visionary leadership and for his decades of entrepreneurial excellence in revolutionizing the two-wheeler industry in India.

Special Recognition to Mr Sudarshan Venu, Managing Director

Mr Sudarshan Venu received "Next Gen Leader" award at the Indian Family Business Awards 2022. This remarkable recognition was a testament to his visionary leadership and unwavering commitment to innovation in the automotive industry.

Directors'' appointment / re-appointment / cessation

During the financial year, the following changes happened in the Board of Directors of the Company:

The Board of Directors of the Company at its meeting held on 11^th August 2023 approved / noted the following changes consequent upon Demerger:

* Mr Venu Srinivasan (DIN: 00051523), was designated as NonExecutive Chairman of the Company and ceased to be Chairman Emeritus and Managing Director effective 11^th August 2023;

* Dr. Lakshmi Venu (DIN: 02702020), ceased to be Managing Director and Director of the Company effective 11^th August 2023; and

• Mr R Gopalan (DIN: 01624555), Non-executive Chairman ceased as Chairman of the Company and continued as a Non-executive Director.

Mr Rajesh Narasimhan (DIN: 07824276) resigned as Non- Executive Director of the Company effective close of business hours of 11^th August 2023 due to personal reasons.

Based on the recommendation of the Nomination and Remuneration Committee, the Board at its meeting held on 11^th September 2023 approved the following:

• Appointment of Mr Sudarshan Venu (DIN: 03601690), as Managing Director for a period of five years, effective 11^th September 2023, on such remuneration to be decided as and when deemed fit by the Board;

• Appointment of Mr Timm Tiller (DIN: 10289596), as an Additional Director and Non-Executive Independent Director of the Company, for a term of five consecutive years effective 11^th September 2023; and

• Re-appointment of Ms Sasikala Varadachari (DIN: 07132398) as Non-Executive Independent Director for a second term of 3 years effective 24^th October 2023.

All the above subjects were approved by the shareholders by ordinary / special resolutions, through Postal Ballot on 20th October 2023. Further, as required under Section 196 read with Clause (e) of Part I of Schedule V of the Companies Act, 2013 the approval of the Central Government was also received on 2^nd February 2024 for the appointment of Mr Sudarshan Venu as Managing Director, being a non-resident.

In terms of the provisions of sub-section (6) read with explanation to Section 152 of the Act, 2013, two-thirds of the total number of Directors i.e., excluding IDs, are liable to retire by rotation and out of them, one-third is liable to retire by rotation at every AGM. Accordingly, Mr K Gopala Desikan, Director & Group Chief Financial Officer, is liable to retire by rotation, at the ensuing AGM.

The Directors have recommended his re-appointment for the approval of shareholders. Brief resume of the Director is furnished in the Notice convening the AGM of the Company.

Independent Directors (IDs)

All IDs hold office for a fixed term and are not liable to retire by rotation.

The appointment of new Directors is recommended by the Nomination and Remuneration Committee (''NRC'') on the basis of requisite qualifications, skills, proficiency, experience, expertise in industry knowledge and competencies as identified and finalized by the Board considering the industry and sector in which the Company operates.

The Board, on the recommendation of the NRC, independently evaluates and recommends to the shareholders. In the opinion of the Board, the Independent Directors appointed during the year are persons of high repute, integrity and possesses the relevant expertise and

experience in the respective fields.

The terms of appointment of Independent Directors (IDs) include the remuneration payable to them by way of fees and profit-related commission, if any.

The terms of IDs cover, inter-alia, duties, rights of access to information, disclosure of their interest / concern, dealing in Company''s shares, remuneration and expenses, insurance and indemnity. The IDs are provided with copies of the Company''s policies and charters of various committees of the Board.

In accordance with Section 149(7) of the Act, 2013, all IDs have declared that they have met the criteria of independence as provided under Section 149(6) of the Act, 2013 and Regulation 25 of the Listing Regulations and the Board confirms that they are independent of the management.

The detailed terms of appointment of IDs is disclosed on the Company''s website in the link as provided in page no. 89. of this Annual Report.

All the IDs are registered with the databank of Independent Directors developed by the Indian Institute of Corporate Affairs in accordance with the provisions of Section 150 of the Companies Act, 2013 and obtained ID registration certificate and renewed the same for five years / life time, as the case may be.

Separate meeting of Independent Directors

During the year under review, a separate meeting of IDs was held on 11^th March 2024.

Based on the set of questionnaires, complete feedback on NonIndependent Directors and details of various activities undertaken by the Company were provided to IDs to facilitate their review / evaluation.

a) Non-Independent Directors (Non-IDs)

IDs used various criteria prescribed by the Nomination and Remuneration Committee (NRC) for evaluation of Non-IDs and Executive Directors viz., M/s Sudarshan Venu, K Gopala Desikan and Non-ID Non-Executive Director viz., M/s Venu Srinivasan and Mr R Gopalan and also of Chairman of the Board and the Board as a whole, for the year 2023-24.

IDs evaluated the performance of all Non-IDs individually, through a set of questionnaires.

IDs reviewed the Company''s performance during the year 2023-24 and the comparative data on financial / market cap for the year 2023-24.

They also reviewed the developing strategic plans aligned with the vision and mission of the Company, displaying leadership qualities for seizing the opportunities and priorities, developing and executing business plans aware of the risks involved, establishing an effective organizational structure, and demonstrating high ethical standards and integrity and commitment to the organization besides participation at the Board / Committee meetings, effective deployment of knowledge and expertise and constructive comments / guidance provided to

management by the Non-IDs.

IDs appreciated and recorded that-

Mr Venu Srinivasan Chairman''s vision is a driving force and has also made major contribution to the automotive industry and nation building at large for the last four decades;

His dedication to the transformation of rural India by empowering women in the rural areas can be seen through his passion towards setting up the Srinivasan Services Trust which has touched the lives of 1.6 million people in 2500 villages across the country in the last 28 years

IDs were satisfied fully with the performance of all Non-IDs.

b) Chairman

IDs reviewed the performance of the Chairman of the Board.

IDs also placed on record, their appreciation of the Chairman''s exemplary leadership skills, exceptional vision, and unwavering dedication, Instrumental in leading the Company through a period of significant transformation, providing both strategic guidance and strong leadership to the Board of Directors and leverages his extensive experience to steer board discussions and decisions that maximize value for the Company and its shareholders.

IDs also noted that his vast experience to bear on steer Board discussions and decisions for the benefit of the Company and Shareholders.

c) Board

IDs also evaluated the Board''s composition, size, the mix of skills and experience, meeting sequence, the effectiveness of discussion, decision making, and follow up action, so as to improve governance and enhance the personal effectiveness of Directors.

The evaluation process focused on Board Dynamics. The Company has a Board with a wide range of expertise in all aspects of business and outstanding diversity of the Board with the presence of varied personalities with an expert in each domain viz., Engineering, Finance, Marketing, Legal, Banking, Administration and International trades and is well balanced with the addition of Directors, with domestic and international experience and also from new industries

The Company''s management is well guided by the Non-Executive Directors; and Board benchmarks well in terms of its overall composition and the value it adds to the business.

As far as shareholders'' interest is concerned, IDs noted that a proper system has been established to ensure that the Company is prompt, relevant and transparent.

They were satisfied with the Company''s performance in all fronts and finally concluded that the Board operates with best practices. Board composition of the Company is in compliance with the SEBI Listing

Regulations and ahead of the benchmark as per the Corporate Governance Scorecard in overall position.

d) Quality, Quantity and Timeliness of flow of information between the Company, Management and the Board

All IDs have expressed their overall satisfaction with the support received from the management and the excellent work done by the management during the year under review and also that the relationship between the top management and Board is smooth and seamless.

The Company is in compliance with the statutory requirements under both the Companies Act and the Listing Regulations and all the information provided to the Directors are very wholesome.

The information provided for the meetings were clear, concise and comprehensive to facilitate detailed discussions and periodic external presentations on specific areas well supplemented the management inputs. The emerging e-technology was duly incorporated in the overall review of the board.

Key Managerial Personnel (KMP)

Mr Sudarshan Venu, Managing Director, Mr K Gopala Desikan, Director & Group Chief Financial Officer and Mr R Raja Prakash, Company Secretary are KMPs of the Company in terms of Section 2(51) read with Section 203 of the Act, 2013 as on date of this Report.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee of Directors (NRC) reviews the composition of the Board to ensure an appropriate mix of abilities, experience and diversity to serve the interests of all stakeholders of the Company.

The objective of such policy shall is to attract, retain and motivate executive management and devise remuneration structure to link to Company''s strategic long-term goals, appropriateness, relevance, and risk appetite.

NRC will identify, ascertain the integrity, qualification, appropriate expertise and experience, having regard to the skills that the candidate will bring to the Board / Company, whenever the need arises for appointment of Directors / KMP.

Criteria for performance evaluation, disclosures on the remuneration of Directors, criteria of making payments to Non-Executive Directors have been disclosed as part of Corporate Governance Report attached herewith.

Remuneration payable to Independent Directors

The Shareholders have provided approval for renewal of the payment of remuneration, by way of commission not exceeding 1% of the Net profits, in aggregate, payable to the Independent Directors of the Company (IDs) every year.

IDs devote considerable time in deliberating the operational and other issues of the Company and provide valuable advice in regard to the

management of the Company from time to time, and the Company also derives substantial benefit through their expertise and advice.

Evaluation of the Independent Directors and Committees of Directors

In terms of Section 134 of the Act, 2013 and the Corporate Governance requirements as prescribed under the Listing Regulations, the Board reviewed and evaluated Independent Directors and various Committees viz., Audit Committee, Risk Management Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders Relationship Committee, based on the evaluation criteria laid down by the NRC.

Board has carried out the evaluation of all Directors (excluding the Director being evaluated) and its committees through a set a questionnaire.

Independent Directors

The performance of all IDs was assessed against a range of criteria such as contribution to the development of business strategy and performance of the Company, understanding the major risks affecting the Company, clear direction to the management and contribution to the Board cohesion. The performance evaluation has been done by the entire Board of Directors, except the Director concerned being evaluated.

The IDs were always kept informed of the constitution of robust framework for the Company and group companies against cyber threats and mitigation plans against cyber-attacks for business continuity. The Board noted that all IDs have understood the opportunities and risks to the Company''s strategy and are supportive of the direction articulated by the management team towards consistent improvement.

On the basis of the report of performance evaluation of directors, the Board noted and recorded that all the directors should extend and continue their term of appointment as Directors / Independent Directors, as the case may be.

Committees

Board delegates specific mandates to its committees, to optimize Directors'' skills and talents besides complying with key regulatory aspects.

a. Audit Committee for overseeing financial Reporting;

b. Risk Management Committee for overseeing the risk management framework;

c. Nomination and Remuneration Committee for selecting and compensating Directors / Employees;

d. Stakeholders'' Relationship Committee for redressing investors'' grievances; and

e. Corporate Social Responsibility Committee for overseeing CSR initiatives and inclusive growth.

The performance of each Committee was evaluated by the Board after seeking inputs from its members on the basis of specific terms of

reference, its charter, time spent by the Committees in considering key issues, quality of information received, major recommendations / action plans and work of each Committee.

The Board is satisfied with overall effectiveness and decision making of all Committees. The Board reviewed each Committee''s terms of reference to ensure that the Company''s existing practices remain appropriate.

Directors continues to devote such time as is necessary for the proper performance and effectively discharge their duties, all of them to devote appropriate time to fulfil their duties.

Board and its Committees has an appropriate combination of skills, experience and knowledge.

The current committees structure was considered effective and all the committees of the Board were considered to be working effectively.

Recommendations from each Committee were considered and accepted by the Board prior to its implementation during the financial year under review.

Details of Committees, its charter and functions are provided in the Corporate Governance Report.

Number of Board meetings held

During the financial year 2023-24, the Board met seven times and details of the meetings are provided as part of Corporate Governance Report prepared in terms of the Listing Regulations.

18. AUDITORS Statutory Auditors

The Company at its Sixtieth AGM held on 28^th June 2022 re-appointed M/s Raghavan, Chaudhuri & Narayanan, Chartered Accountants, Bengaluru, having Firm Registration No. 007761S allotted by The Institute of Chartered Accountants of India, as Statutory Auditors of the Company to hold office, for the second term of five consecutive years, from the conclusion of the said AGM, at such remuneration in addition to applicable taxes, out of pocket expenses, travelling and other expenses as may be mutually agreed between the Board of Directors of the Company and the Auditors.

Effective 14^th March 2024 the Company has become a Core Investment Company ("CIC"), and thereby the Company is required to adhere to the Regulations prescribed by RBI in connection with the appointment of Statutory Auditors. As prescribed by Reserve Bank of India ("RBI") vide their circular dated 27^th April, 2021 the regulations are applicable to the Company.These guidelines contain instructions regarding the manner of appointment, number of auditors, eligibility criteria, tenure, rotation as well as norms for ensuring the independence of auditors. Based on the above said circular, M/s Raghavan, Chaudhuri & Narayanan, Chartered Accountants, communicated their ineligibility on the continuation as Statutory Auditors of the Company and tendered their resignation effective 9^th May 2024.

To fill up this casual vacancy, the Board of Directors in its meeting held on 9^th May 2024 have appointed M/s. N C Rajagopal & Co., Chartered

Accountants, Chennai (ICAI Firm Registration Number: 003398S) as the Statutory Auditors of the Company effective 10^th May 2024 till the conclusion of ensuing Annual General Meeting. Your Company has received an eligibility letter from the Auditors for their appointment in accordance with Sections 139 and 141 of the Act read with the RBI circulars in connection with the appointment of Statutory Auditor. Necessary resolutions are being placed in the ensuing Annual General Meeting for approval of shareholders for appointment done in casual vacancy and also for further appointment for a term of 3 years from the conclusion of Annual General Meeting.

The Auditors'' Report for the financial year 2023-24 does not contain any qualification, reservation or adverse remark and the same is attached with the annual financial statements.

Secretarial Auditors

As required under Section 204 of the Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company is required to appoint a Secretarial Auditor for auditing secretarial and related records of the Company.

The Secretarial Audit Report for the financial year 2023-24, given by Ms B Chandra, Practising Company Secretary, Chennai is attached to this Report.

The Secretarial Audit Report does not contain any qualification, reservation or other remarks.

The Board at its meeting held on 9^th May 2024 has re-appointed Ms B Chandra, Practicing Company Secretary, Chennai having CP No. 7859 allotted by the Institute of Company Secretaries of India as Secretarial Auditors for the financial year 2024-25.

Cost Auditor

Pursuant to the Composite Scheme of arrangement being effective 11^th August 2023, the diecasting business has been demerged to Sundaram-Clayton Limited (formerly known as Sundaram-Clayton DCD Limited) the Company is not required to maintain the Cost records from 11^th August 2023 to 31^st March 2024. Hence, the Company had maintained the cost records for the period upto 10^th August 2023.

The Company has filed the Cost Audit report on 23^rd August 2023 for the FY 2022-23. The Company will file the Cost Audit report for the period from 1^st April 2023 to 10^th August 2023 in due course.

19. CORPORATE GOVERNANCE

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

A separate section on Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Listing Regulations is given as Annexure VI to this Report.

The Managing Director and the Chief Financial Officer (CFO) of the Company have certified to the Board on financial statements and other matters in accordance with the Regulation 17 (8) of the Listing Regulations pertaining to CEO / CFO certification for the financial year ended 31^st March 2024.

20. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") read with relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed under "Business Responsibility and Sustainability Report"(''BRSR''). The BRSR seeks disclosure on the performance of the Company against nine principles of the "National Guidelines on Responsible Business Conduct'' (''NGRBCs'').

As per the SEBI Circulars, effective from the financial year 2023-24, filing of BRSR is mandatory for the top 1,000 listed companies by market capitalisation. Accordingly, for the financial year ended 31^st March 2024, Company has published BRSR, in the prescribed format is given as Annexure V to this Report and is available on the Company''s website in the link as provided in page no. 89 of this Annual Report.

21. POLICY ON VIGIL MECHANISM

The Company has adopted a Policy on Vigil Mechanism in accordance with the provisions of the Act, 2013 and Regulation 22 of the Listing Regulations, which provides a formal mechanism for all Directors, Employees and other Stakeholders of the Company to report to the management, their genuine concerns or grievances about unethical behaviour, actual or suspected fraud and any violation of the Company''s Code of Business Conduct and Ethics.

The Code also provides a direct access to the Chairman of the Audit Committee to make protective disclosures to the management about grievances or violation of the Company''s Code.

The Policy is disclosed on the Company''s website in the link as provided in page no. 89 of this Annual Report.

22. PUBLIC DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Section 76 of the Act, 2013 and the RBI Act, 1934 and the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank of India) Directions, 2016 for the year ended 31^st March 2024 and there are no such Public Deposits Outstanding as on 31^st March 2024.

23. STATUTORY STATEMENTS

Information on conservation of energy, technology absorption, foreign exchange etc:

As the Company is a Core Investment Company investing in Subsidiaries and Associate(s), the particulars regarding conservation of energy and technology absorption as required to be disclosed pursuant to provision of Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not relevant to its activities.

Total foreign exchange earned and used: $ in Cr

Foreign exchange used 56.17

Foreign exchange earned 358.07

Material changes and commitments, if any, affecting the financial position of the Company, having occurred since the end of the year and till the date of the Report:

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

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

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

Annual Return:

Copy of the Annual Return (Annexure I) in prescribed form is available on the Company''s website in the link as provided in page no. 89 of this Annual Report, in terms of the requirements of Section 134(3)(a) of the Act, 2013 read with the Companies (Accounts) Rules, 2014.

Employee''s remuneration:

Details of Employees receiving the remuneration in excess of the limits prescribed under Section 197 of the Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as a statement and given in Annexure II. In terms of first proviso to Section 136(1) of the Act, 2013 the Annual Report, excluding the aforesaid annexure is being sent to the Shareholders of the Company. The annexure is available for inspection at the Registered Office of the Company during business hours as mentioned in the Notice of AGM and any Shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

Comparative analysis of remuneration paid:

A comparative analysis of remuneration paid to Directors and Employees with the Company''s performance is given as Annexure IV to this Annual Report.

Details of related party transactions:

There are no material related party transactions under Section 188 of the Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014.

Details of loans / guarantees / investments made:

The Company is registered as a Core Investment Company with RBI. Thus, particulars of loans, guarantees and investments under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, are not applicable to the Company.

Reporting of fraud

The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act, 2013.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards as amended from time to time.

General Disclosures

During the year, there were no transaction requiring disclosure or reporting in respect of matters relating to:

a. issue of equity shares with differential rights as to dividend, voting or otherwise;

b. issue of shares (including sweat equity shares) to employees of the Company under any scheme;

c. pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016 and

d. instance of one-time settlement with any bank or financial institution.

Disclosure in terms of Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act, 2013

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH), as amended, Company has a robust mechanism in place to redress complaints reported under it. Company has complied with provisions relating to the constitution of Internal Committee under POSH. The Internal Committee (IC) comprises of internal members and external member who has an extensive experience in the field.

There were no cases of sexual harassment reported during the year 2023-24.

During the year 2023-24, initiatives were undertaken to demonstrate Company''s zero tolerance policy against discrimination and sexual harassment, which included creation of comprehensive and easy to understand training and communication material. In addition, online workshops were also run for the employees to enhance awareness and knowledge.

Statutory Disclaimer

The Company is having a valid Certificate of Registration dated 14^th March 2024 issued by RBI under Section 45-IA of the RBI Act. However, RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for repayment of deposits / discharge of liabilities by the Company.

24. ACKNOWLEDGEMENT

The Directors gratefully acknowledge the continued support and cooperation received from the Promoters and also thank the bankers, investing institutions, customers, dealers, vendors and sub-contractors for their valuable support and assistance.

The Directors wish to place on record their appreciation of the very good work done by all the employees of the Company during the year under review.

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

---

Mar 31, 2023

The Directors have pleasure in presenting the 61^st Annual Report and the audited financial statements for the year ended 31^st March 2023.

1. FINANCIAL HIGHLIGHTS

(Rs. in Cr)
Particulars	Year ended 31.03.2023	Year ended 31.03.2022
Revenue from Operations	2,073.96	1,743.27
Other Income	132.76	93.59
Profit / (loss) before Depreciation, Finance Costs, Exceptional items and Tax Expense	381.73	324.54
Less: Depreciation / Amortization / Impairment	99.94	101.74
Profit / (loss) before Finance Costs, Exceptional items and Tax Expense	281.79	222.80
Less: Finance Costs	45.82	44.91
Profit / (loss) before Exceptional items and Tax Expense	235.97	177.89
Add / (less): Exceptional items	(17.10)*	(19.75)*
Profit / (loss) before Tax Expense	218.87	158.14
Less: Tax Expense (Current & Deferred)	53.58	23.80
Profit / (loss) for the year	165.29	134.34
Other Comprehensive Income / (loss)	3.37	(3.12)
Total Comprehensive Income	168.66	131.22

* Exceptional item excludes interest on fixed deposits amounting to $ 111.87 Crs and interest expense on Bonus 9% Cumulative Non-Convertible Redeemable Preference Shares (NCRPS) amounting to $4.05 Crs for the year 2022-23 and profit on sale of shares (including interest on fixed deposits) amounting to$2,142.35 Cr for the year 2021-22.

Profit Before Tax (PBT) including the above exceptional items works out to $326.69 Cr for the year 2022-23 and $2,30049 Cr for the year 2021-22.

2. DIVIDEND

The Board of Directors of the Company (the Board) at their meeting held on 25^th January 2023, declared an interim dividend of $ 59/- per share (1180%) on 2,02,32,085 equity shares of $ 5/- each for the year 2022-23 involving an outgo of $119.37 Cr. The same was paid to the members on 10^th February 2023.

The Board does not recommend any further dividend for the year under consideration. The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy.

The Board is not considering any transfer of amount to General Reserves for the year under review, as it is not mandatorily required.

3. PERFORMANCE Indian economy:

India''s real Gross Domestic Product (GDP) grew by 7.0% in FY23 as against a growth of 8.7% in FY22. The high real GDP growth rate of

13.5% in Q1 FY23 was moderated by low single digit growth rates in Q2, Q3 and Q4 of FY23 amid high inflationary pressures globally led to large spike in prices of energy & commodities. RBI estimated the FY23 inflation in India at 6.7%.

World Bank estimates the World economies'' GDP growth at 2.9% in 2022 against the growth rate of 5.9% in 2021. This slowdown in growth was attributed to the concerted significant interest rate hike actions by the central banks across all the major economies to control inflation.

US economy:

The US recorded GDP growth of 0.9% in 2022 compared to the growth of 5.7% in 2021. Retail spends remained strong during the year, despite inflation reaching as high as 9.1% in June 2022 before easing to 6.0% in February 2023. However, the housing demand tapered during the second half of the year.

EU economy:

The EU GDP grew at 3.6% in 2022 compared to the growth of 5.2% in 2021. Inflation in the EU area touched a high of 10.6% during the year due to steep increases in energy prices, mainly Natural Gas prices, which touched a high of USD 70 per million metric British Thermal Unit (mmbtu). Natural Gas prices in EU averaged around USD 37 per mmbtu in 2022 compared to the 10-year long-term average of USD 7 per mmbtu.

Company''s Performance:

The Company posted its best ever performance both in turnover and profit terms during the year by focusing on making systemic improvements across the organization, by improving productivity & quality and by delivering the products to the customer on-time. This is despite the adverse macro-economic factors, moderate improvement in supply of semiconductors for the automotive sector and intermittent spikes in COVID infections in China.

The following table highlights the performance of the Company during FY 2022-23:

Particulars	FY 2022-23	FY 2021-22	Growth (in %)
Sales (Tonnage)	43,315	38,982	11
Sale of goods ($ in Cr)	1,979.66	1,648.67	20
Domestic sales ($ in Cr)	1,060.86	868.57	22
Export sales ($ in Cr)	918.80	780.10	18
Profit before Tax ($ in Cr)	218.86	158.14	38

The revenue of the Company is derived from Medium & Heavy Commercial Vehicles (MHCV) segment (61%), followed by Two-wheeler segment (21%) and the Passenger Vehicle segment (18%).

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT I. INDUSTRY STRUCTURE AND DEVELOPMENT:

Domestic

The segment wise performance in the Indian automotive industry is given in the following table.

(Figures in ''000 nos)
Category	FY 2022-23	FY 2021-22	Growth (in %)
Two Wheelers	19,443	17,909	9
Passenger Vehicles	4,108	3,272	26
Commercial Vehicles (M&HCV)	372	273	36
(Source: SIAM DICV internal estimate)

(Figures in ''000 nos)
Market	Category	CY 2022	CY 2021	Variance (in %)
North America	Class 8 Trucks	310	271	14
North America	Class 4-7 Trucks	247	266	(7)
Europe	Heavy trucks (>16T)	290	270	7
(Source: FTR & ACEA)

Despite shortage of semiconductors, supply chain uncertainties, high logistics costs and rising commodity prices, the Indian automotive industry performed better than expected during the year FY23.

While Government spending on infrastructure projects improved the demand for MHCVs, improvement in personal mobility resulted in increased demand for passenger vehicle demand. In two-wheeler segment, domestic demand was healthy despite witnessing sharp changes over the quarters, but the exports demand was affected by liquidity crunch, currency devaluations and country specific local sociopolitical and economic disturbances.

Despite external pressures, India''s service exports have continued to increase. The agricultural sector grew by 3.5%, and also strengthened Company''s position as a net exporter of agricultural products.

In fiscal 2023, the overall growth of rural was slower than urban due to relatively slower recovery in the rural non-agricultural sector.

Exports

The following table highlights the North American and European truck registration figures in vehicle units:

North America: The Class 8 trucks sales were strong in 2022 despite a slow start in Q1 2022. Although high inflation and interest rate hikes were major threats to the Class 8 truck demand, their sales registered a growth of 14% in 2022 and defied the recession fears due to high pent-up demand, fleet replacement, strong consumer spending and stable freight rates. The global truck manufacturers circumvented the semiconductors shortages by re-allocating semiconductors from other segments (Class 4-7) and by developing technical solutions that allowed interchangeability of semiconductors.

Europe: In the EU markets, heavy commercial vehicles (>16 Ton category) registered a decent growth of 7% in 2022 compared to 2021. Within the region''s largest markets, only Germany remained in negative territory (-0.9%), while all the other high-volume EU markets for heavy trucks recorded growth in 2022: Spain ( 13.6%), Poland ( 6.6%), Italy ( 5.1%) and France ( 2.3%). However, the numbers were still below the pre-pandemic levels of 2019.

II. BUSINESS OUTLOOK AND OVERVIEW

The business environment is expected to be challenging in export markets and healthy in India during 2023. The Company is optimistic about its future considering the following scenario in all major markets that are of interest to the Company.

India :

The Government allocated higher budget to infrastructure development projects. In the Budget 2023-24, the Government has increased the outlay for capital expenditure (capex) on infrastructure sector by 33 per cent from $ 7.5 lakh crore to $ 10 lakh crore. Current Account Deficit (CAD) of India is projected to be around 2.3% of GDP in FY23 and further narrow down in FY24 on the back of increasing services export. Rainfall is expected to be normal and inflation is expected to be within the comfort range of RBI and GDP growth rate in FY24 is expected to be in the range of 5.8% to 6.5%.

In the medium term, there are various initiatives in place to continue India''s growth momentum. Production Linked Incentives for Automotive & Auto Component sector & other sectors are expected to strengthen the manufacturing sector in India, continuation of FAME scheme to transition to EV and special focus on setting up semiconductor manufacturing in India are going to be major drivers for Auto industry''s growth.

In FY24, the sales of Passenger Vehicle and Commercial Vehicle segments in India are expected to register around 10% growth and the sales of Two-wheelers are expected to grow by around 5%.

Global scenario:

Global GDP growth rate is expected to decelerate to 1.7% in 2023 from 2.9% in 2022, due to geopolitical strife that emerged last year though localized had global ramifications. This specter of strife hangs over the global economy and trade, which impacted all major commodity prices and cross border trade.

The recent banking crisis is also expected to have an impact on global growth. Central banks across the globe are now increasing the interest rates to rein the high inflation that was not seen in the last few decades.

North America:

In 2023, the US economy is expected to maintain the GDP growth rate of around 0.7%, similar to the growth rate of 2022. The Fed raised interest rates by 425 basis points in 2022 and by an additional 50 basis points as of March 2023. Fed may tighten the supply of money by raising the interest rates vice-versa at a slower rate, to rein in inflation. Therefore, the US Class 8 truck market volumes are expected to be almost flat in 2023.

Europe :

EU economy is still facing the headwinds due to high energy prices, despite some moderation in prices since January 2023. The European Central Bank has increased the interest rates by 250 basis points in 2022 and an additional 100 basis points as of March 2023 to control inflation. The economic activity is expected to be muted in EU with no GDP growth in 2023, however, the chances of de-growth appear low as of now. Consequently, the sales of EU heavy commercial vehicles (>16 Ton category) in 2023 are expected to be same as those in 2022 with no growth or minimal de-growth.

To summarize the export market outlook, the truck industry in the US and the EU is expected to witness a low single digit growth in 2023.

III. OPPORTUNITIES & THREATS

The Company supplies aluminium castings for commercial vehicles, passenger cars and two-wheeler segments of the automotive industry.

In the long term, technology changes such as stringent emission norms, fuel economy regulations, adoption of alternate drivetrain technologies, etc., are the major challenges the industry needs to tackle. Global truck manufacturers are already offering zero emission vehicles in the US and the EU. However, the thrust towards light-weighting and zero emission vehicles is bound to increase leading to higher content of aluminium in all vehicle types. This shift to zero emission vehicles provides increased growth opportunities to the Company and it is well placed to leverage these emerging opportunities, being a preferred source for aluminium castings to major OEMs in India, the US and the EU.

Many companies are expected to move out of China, which is a major source of supplies for automotive parts. This is expected to provide additional growth opportunities to the Company.

OEMs are estimating carbon footprint in every leg of their supply chain in an effort to move towards net zero emissions and would eventually reorganize their global purchasing strategies, which could result in a strong push for localization to cut down their carbon footprint. The threat to business from this potential change in sourcing policy is mitigated as the Company has already set up a manufacturing in the US. The Company is closely monitoring these developments and will act to capitalize on business opportunities to ensure continued growth. The Company is also taking various green initiatives across its manufacturing sites and working to use more renewable energy in its manufacturing processes as part of its sustainability measures.

Several Indian die casting companies and OEMs have set up or have been setting up new capacities over the past few years. The Company will be continuing its actions to secure new businesses to ensure better utilization of assets despite the increased competition and cost pressure.

Intense competition makes it extremely difficult to seek price increases to compensate the effects of inflation bringing the margins under severe pressure. However, the Company''s supply contracts provide for periodic price adjustments indexed to the domestic and international prices of aluminium and this should offer some protection against volatility of

commodity prices. The Company is practicing strong cost reduction initiatives including VA/VE to mitigate the margin pressures.

IV. RISKS AND CONCERNS Macroeconomic risks

There are several possible risks on the horizon, both global and domestic level. In India, rural recovery continues to be slow, and this significantly impacts the growth trajectory of the economy. Less than normal monsoon may also lead to a weaker performance of the rural agricultural sector impacting the already weakened rural demand. Further the economic recovery could be hampered due to any increase in oil & gas price. The above stated factors can create disruption to an already fragile global trade & supply chain situation, increased inflation, and dampen the demand.

Industry and Company specific risks

The truck sales in the US and the EU are expected to witness no growth or low single-digit growth in 2023.

In India, increase in manufacturing activity, steady agricultural output, and the government''s increased spending on infrastructure and moderated freight costs are all expected to drive the demand. But disruptions like semiconductor shortages and increased raw material prices could constrain the supply.

Significant unfavourable movement in prices of key raw material, aluminium, in global markets is one key factor that can affect the profit margins of the Company. The aftermath of COVID led supply chain disruptions and increase in power tariff domestically are major factors that can impact financial performance in FY24. The management is continuously monitoring the costs of raw material & logistics and taking appropriate cost reduction measures or contract price negotiations to maintain and improve the profit margins.

Forex

With significant exports, import of raw materials and capital goods, the Company is always exposed to impact on account of currency fluctuations. However, the Company has a well-defined forex hedging policy to mitigate the risks.

Contractual

The stipulation and requirements of the automobile industry demands high quality products. Robust quality management systems meeting international standards like IATF 16949 are in place to ensure excellent product quality. Additionally, the Company has also taken appropriate recall and product liability insurance in line with standard industry practice.

Just-in-time delivery is another important contractual obligation. Robust quality and project management systems are in place to avoid delay in deliveries due to quality issues or project implementation.

Capacity utilization

The Company adds capacity as required, in existing and new locations, to meet the projected demand of customers. The Company closely

monitors the progress of customer projects / volumes and appropriately deploys the assets to protect from both underutilization and capacity shortages to meet the demand.

Risk Management Policy

The Board has established a Risk Management Policy which formalizes the Company''s approach to overview and manage material business risks. The policy is implemented through a top down and bottom-up approach for identifying, assessing, monitoring and managing key risks across the Company''s business units.

Company''s risk management framework is well embedded and continually reviewed by the Risk Management Committee. The Committee is regularly reporting to the Board that the Company''s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

The Board is satisfied that there are adequate systems and procedures in place to identify, assess, monitor and manage risks. The Audit Committee also reviews reports by members of the management team and recommends suitable action. Risk Mitigation Policy has been approved by the Board.

V. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Board is accountable for evaluating and approving the effectiveness of the internal controls, including financial, operational and compliance. The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded. Information provided to management is reliable and timely and statutory obligations are adhered to.

Company is strengthening the controls by leveraging technology and centralizing processes, enhancing monitoring and maintaining effective tax and treasury strategies. The Audit Committee continues to monitor the effectiveness of internal control through the use of new technologies that impact the financial controls and reporting enterprise risk.

Internal Financial Controls

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

VI. OPERATIONS REVIEW

A. Manufacturing

The Company has been using Total Quality Management (TQM) as the foundation of its management. The Company implemented the best practices like Total Productivity Management (TPM) and Lean Manufacturing (TPS) in its manufacturing facilities. During FY23, the Company continued working with mentors to improve its systems and

processes. Significant aspect of the same is to synchronize Company''s operations with customer demand. This will bring in better planning and execution system along with control over inventories in the pipeline. It also has in place best-in-class practices for safety, pollution control, work environment, water and energy conservation.

Continuous improvement projects are implemented for betterment of the product quality and operational efficiency in all the manufacturing locations. Re-energizing TPM practices helped in improving the equipment reliability and consequently plant Overall Equipment Effectiveness (OEE). The Company has also initiated various projects towards deploying Industry 4.0 practices through connected machines. This will be scaled up in the coming years and is expected to bring significant gains in operational efficiencies across manufacturing locations.

The Company''s journey of achieving manufacturing excellence was recognized and rewarded by the following customers during FY23.

• Cummins - Customer support Excellence Award - Direct sourcing for the year 2021.

• DAF - Recognized SCL in "Leaders category". SCL is one among 17 suppliers globally to be selected for this recognition for the 3rd consecutive year.

• Ford - Awarded for Quality and Flow for Panther 2.0 L engine launch.

• Hanon - Awarded as the Best Quality Consistent supplier.

In addition, the Company has also received Best Foundry Award in large scale category at the casting industry event, ALUCAST 2022.

In line with the Company''s vision, work is being done on developing several futuristic technologies that will bring value to the customer. One such technology that is now being offered to customers is the Abrasive Flow Machining (AFM) process for which patent is owned in USA and EU. New orders are being given for the AFM technology and our customers are delighted with our R&D facilities and technologies.

B. Quality

Achieving customer delight by consistently providing products of excellent quality is the prime motto of the Company. This is achieved through state-of-the-art technology, training, effective quality system, continuous improvement and total employee involvement.

Poka-yokes, process audits, use of statistical tools for process optimization and online process controls also contribute towards improving and achieving consistency in product quality. During the year special focus has been given on advanced statistical methods and widespread use of Taguchi DOE methodology to further improve the product quality. The quality system is certified for IATF 16949 requirements.

TQM is a way of life in the Company. 100% employee involvement has been successfully achieved for many years.

Employees have completed 362 projects by applying statistical tools through Quality Control Circles (QCC) in FY23. The average number of suggestions implemented per employee was 44.

C. Cost Management

Cost management is a continuous journey, and the Company manages the same through rigorous deployment, monitoring and control of costs across all departments. Cross functional teams are working on projects focussed on Value Added / Value Engineering (VA/VE) and improving operational efficiency. TPM and Lean initiatives are deployed Company-wide to achieve reduction in manufacturing cost. Given the cost pressures due to the current inflationary pressures, significant cross functional team working ensured mutual cross learning and fast horizontal deployment of ideas/projects across our manufacturing locations.

D. Information Technology

The Company uses ERP system that integrates all business processes across the Company. Suppliers and customers are also integrated into the system for better planning and execution. During FY23, IT road map for organization was laid out and deployment of Industry 4.0 projects was initiated to monitor, control and improve manufacturing processes and quality. The Industry 4.0 projects have progressed as per plan and selected cells in all the factories are connected. The Company worked with external agency during the previous financial year and improved the cyber security controls and mechanisms achieving a score of 3.62 / 5.0 and placing it amongst the leaders in the auto component industry. The cyber security program with external agency is ongoing to sustain and improve the security controls. As we move towards digitalization of our processes and systems, special focus is being given to enhance the Information Security of our networks with a special emphasis on cyber security aspects. These digitalization measures across various functions will ensure all the processes and systems are optimised and aligned to deliver customer delight.

VII. KEY FINANCIAL RATIOS

As required under Regulation 34 of the Listing Regulations, details of changes in some of the ratios, as compared to the previous year are given below:

Particulars	Unit of	Standalone		Consolidated
	measurement	2022-23	2021-22	2022-23	2021-22
Return on Networth $	%	30.47	23.91	20.97	16.12
Net Debt to Equity **	%	0.93	0.25	3.75	2.20
Interest Sen/ice Coverage Ratio $	Times	8.53	7.57	11.57	6.87
$ The ratios have improved in the current year, predominantly due to higher profits driven by better operational performance.
** Due to capitalisation of reserves for issue of bonus preference shares.

VIII. NON-CONVERTIBLE DEBENTURES

The Company had issued and allotted 1,000 unsecured, redeemable, non-convertible debentures (NCD) of face value of $ 10 Lakhs each on 18^th August 2020 aggregating to $ 100 Crores at 7.65% p.a. and redeemable in equal instalments at the end of 4^th year and 5^th year. The NCDs were listed with National Stock Exchange of India Limited (NSE) on 25^th August 2020.

IX. HUMAN RESOURCE DEVELOPMENT

The Company considers employees as vital and most valuable assets. Human Resource Development (HRD) is aligned to business needs

to enhance business performance and results. HRD is practiced through an overall HRD framework with its constituents as resourcing, employee engagement, performance & compensation management, competency- based development, career & succession planning and organization development. Each of these constituents has a structured approach and process to deliver.

As a part of the long-term strategy of the Company, collaborative education program has been initiated with three reputed institutes to develop role-ready engineers with Company-specific knowledge at the entry level. The Company also revamped and launched the yellow belt and green belt programs during the year along with various other systems-oriented training programs. This is expected to not only help solve chronic problems faced on the shop floor but also help in building the competency of our engineers in structured problem solving.

Career development workshop is conducted to identify high potential employees. Such employees are groomed for taking up higher responsibilities. A reward and recognition systems are in place to motivate and also provide fast track growth for the high potential employees.

Our engineers and executives are sponsored for advanced study offered by both Indian and foreign institutions. Customized technical and leadership competency improvement programs are developed and delivered through reputed institutions.

The Company continuously measures and reports employee engagement every year and identifies improvement areas to work on.

An excellent industrial relations environment continues to prevail at all the manufacturing units of the Company.

X. ENVIRONMENT, HEALTH & SAFETY

The Company is fully committed towards employee safety. Safety management is integrated with the overall Environment, Health and Safety (EHS).

The Company has been certified under Integrated Management System (IMS) combining ISO 14001 and ISO 45001 systems and procedures.

The Company is working on its Sustainability roadmap by engaging with a reputed external agency. The Company has already mapped the carbon footprint of its Indian operations and is now working on detailed roadmap with actions to achieve carbon neutrality.

XI. CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Company''s objectives, projections, estimates and expectations may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations include, amongst others, economic conditions affecting demand / supply and price conditions in the domestic and overseas market in which the Company operates, changes in the Government Regulations, Tax Laws and Other Statutes and Incidental Factors.

CORPORATE RESTRUCTURING

(I) COMPOSITE SCHEME OF ARRANGEMENT OF THE COMPANY FOR ISSUE OF BONUS REDEEMABLE PREFERENCE SHARES AND DEMERGER OF MANUFACTURING UNDERTAKING

The Board at its meeting held on 9^th February 2022 has approved the above Composite Scheme of Arrangement ("Composite Scheme") of the Company, on the recommendation of the Audit Committee and Independent Directors at their respective meetings held on that date. The Company had filed the Scheme with the Stock Exchanges viz., BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") for "No Objection".

The Scheme provides for the following Parts:

(i) Part I- Deals with definitions, share capital and date of taking effect and implementation of the Scheme;

(ii) Part II - Deals with the issue of Non-Convertible Redeemable Preference Shares ("NCRPS") of the Company by way of bonus to the shareholders of the Company by utilising the general reserves / retained earnings;

(iii) Part III - Deals with the amalgamation of the TVS Holdings Private Limited ("TVSH") with the Company and cancellation of the share capital of the Company held by the TVSH and the consideration thereof;

Further the name of the Company shall stand changed to “TVS Holdings Limited”.

(iv) Part IV - Deals with the amalgamation of VS Investments Private Limited ("VSIPL") with the Company and cancellation of the share capital of the Company held by the VSIPL and the consideration thereof; and

(v) Part V - Deals with the demerger, transfer and vesting of the Demerged Undertaking (as defined in the Scheme) from the Company into Sundaram-Clayton DCD Limited ("SCL DCD") on a going concern basis, reduction and cancellation of the paid-up share capital of SCL DCD held by the Company and the consequent issue of shares of SCL DCD by SCL DCD to the shareholders of the Company.

Post Demerger, the name of SCL DCD shall stand changed to “Sundaram-Clayton Limited”.

During the year under review, NSE and BSE by their respective letter dated 29^th July, 2022, issued to the Company their "No Objection" on the Scheme, and based on their No Objection, the Company filed an application with Hon''ble National Company Law Tribunal, Chennai Bench, ("Hon''ble NCLT") for approval of the Composite Scheme.

Hon''ble NCLT vide their Order dated 9^th November, 2022, directed to convene the meetings of the Equity Shareholders, Unsecured Creditors of the Company, and Secured Creditors of VSIPL, on 16^th December, 2022 ("NCLT Convened Meeting") for their approval. Pursuant to the directions of Hon''ble NCLT, the NCLT Convened Meetings were held, and the resolutions were passed with requisite majority. Post the approval of the shareholders and creditors, the Company filed a petition with Hon''ble NCLT, and the Composite Scheme was sanctioned vide its Order dated 6^th March, 2023.

The Board at its meeting held on 13^th March, 2023, noted the Hon''ble NCLTs Order and the first part of the Composite Scheme was made effective on 14^th March, 2023. The Board also authorised the issuance of bonus NCRPS, by fixations of Record Date 1 as 24^th March, 2023, for the purpose of determining the eligible shareholders of the Company.

The Company has made an application for seeking listing and trading approvals for the above NCRPS to the Stock Exchanges, and the Company has received the in-principle approval of NSE vide letter dated 27^th April, 2023. Approval from BSE is awaited. Further, the listing and trading approvals will be provided, subject to the relaxation granted by SEBI under sub-rule (7) of Rule 19 of Securities Contract (Regulation) Rules, 1957.

The Company will intimate to the Shareholders on further developments in connection with other Parts of the Composite Scheme.

5. DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, (the Act, 2013) with respect to Directors'' Responsibility Statement, it is hereby stated that -

i. in the preparation of annual accounts for the financial year ended 31^st March 2023, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;

ii. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

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

iv. the Directors had prepared the accounts for the financial year ended 31^st March 2023 on a "going concern basis";

v. 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

vi. 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.

6. CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR activities have already been textured into the Company''s value system through Srinivasan Services Trust (SST), established in 1996 with the vision of building self-reliant rural community.

Over 27 years of service, SST has played a pivotal role in changing lives of people in rural India by creating self-reliant communities that

are models of sustainable development. The Committee formulated and recommended a CSR Policy in terms of Section 135 of the Act, 2013 along with a list of projects / programmes to be undertaken for CSR spending in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The projects / programmes undertaken by SST and other eligible Trusts are falling within the CSR activities as specified under Schedule VII to the Act, 2013.

Based on the recommendation of the CSR Committee, the Board has approved the projects / programmes carried out as CSR for an amount of $ 45 lakhs for undertaking similar programmes / projects constituting more than 2% of the average net profits of the Company, made during the three immediately preceding financial years, towards CSR spending for the financial year 2022-23 and the Company has met the CSR spending through SST. Chief Financial Officer (CFO) of the Company has also ensured the spending through SST for FY 2022-23.

The work, SST has been doing, has matured into a model centered on community participation in all its projects. It follows an integrated, holistic and participatory approach to village development, working very closely with the communities and the Government. SST''s focus is to bring about sustainable development in villages. The key focus areas are women empowerment, repairing and renovating the village government infrastructure like the balwadis, primary schools, health centres and veterinary centres, creation of water conservation structures, desilting of water bodies and preserving the environment. SST encourages the community to alter their attitudes and take ownership of changes that bring about lasting development.

To bring in expertise in specific intervention areas like education, health and hygiene, SST is working in collaboration with organizations like Agastya International Foundation, Villmart, Navsahyog Foundation and Gramalaya.

All of the projects undertaken through SST, are within the limit of $ 1 Cr individually, and do not require impact assessment.

However, an impact study carried out by Institute of Rural Management (IRMA), Anand has revealed that in the villages in Tiruvannamalai District, where SST has been working show a household income growth of about 141% in 5 years (2017-2022) as compared only to an 38% household income growth in neighbouring areas.

The study also highlights the overall behavioural changes in the community in their approach to development in being more independent and adopting sustainable approaches rather than over dependence on external factors to bring about the change.

Another study by the Centre for Water Resources (CWR), Anna University on 3 minor irrigation (MI) tanks in Krishnagiri, Tiruvannamalai and Tirunelveli districts revealed that partial desilting of water bodies has made the water available for more than one cropping season, 79% of farmers adopted changes in the cropping pattern and cultivating more than one season. The underground water storage capacity has improved and there is an increase in water level in bore wells and open wells in the area.

As required under Section 135 of the Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the

annual Report on CSR, containing the particulars of the projects / programmes approved and recommended by the CSR Committee and approved by the Board for the financial year 2022-23 are given by way of Annexure IV attached to this Report.

It may also be noted that the CSR Committee has approved the projects or programmes to be undertaken by the SST and other eligible trusts for the year 2023-24, preferably in local areas including the manner of execution, modalities of utilisation of funds and implementation schedules and also monitoring and reporting mechanism for the projects or programmes, as required under the Companies Amendment Act, 2020.

7. FINANCIAL PERFORMANCE & POSITION OF SUBSIDIARIES & ASSOCIATES

Acquisitions

During the year under review, the Company had additionally acquired 50.05% stake in Sundaram Holding USA Inc., USA (SHUI) from Sundaram Auto Components Limited (SACL), a subsidiary of the Company on 22^nd September 2022, thereby it became a wholly owned subsidiary of the Company effective that date.

Consequent to the above acquisition, the Company''s holding in SHUI increased to 100% and thereby SHUI''s subsidiaries in USA viz., Green Hills Land Holding LLC, Component Equipment Leasing LLC, Sundaram-Clayton USA LLC and Premier Land Holding LLC have also become wholly owned subsidiaries of the Company.

The Company had also acquired 25,000 shares of EUR 1/- each in Sundaram-Clayton GmbH (SCL GmbH), Germany, effective 8^th February 2023, thereby it became a wholly owned subsidiary of the Company. SCL GmbH is incorporated with the objective of establishing an engineering design centre.

The following companies and bodies corporate are the subsidiaries / associates of the Company:

Subsidiaries

1. TVS Motor Company Limited, Chennai (TVSM)

2. Sundaram-Clayton (USA) Limited, USA

3. Sundaram-Clayton DCD Limited, Chennai

4. Sundaram Holding USA Inc, Delaware, USA

5. Sundaram-Clayton GmbH, Germany (from 08.02.2023)

Subsidiaries of TVSM

1. TVS Credit Services Limited (TVSCS), Chennai

2. Sundaram Auto Components Limited (SACL), Chennai

3. TVS Housing Limited, Chennai

4. TVS Motor Services Limited, Chennai

5. Intellicar Telematics Private Limited, Bengaluru (Intellicar)[upto 24.05.2022]

6. TVS Electric Mobility Ltd, Chennai

7. PT TVS Motor Company Indonesia, Jakarta.

8. TVS Motor (Singapore) Pte. Limited, Singapore (TVSM Singapore)

9. TVS Motor Company (Europe) B.V., Amsterdam Subsidiaries of TVS CS

10. Harita ARC Private Limited, Chennai

11. TVS Housing Finance Private Limited, Chennai

12. Harita Two-wheeler Mall Private Limited, Chennai Subsidiaries of TVSM, Singapore

13. The GO Corporation, Switzerland (GO AG),

14. Swiss E-Mobility Group (Holding) AG, Switzerland (SEMG)

15. The Norton Motorcycle Co Limited, UK

16. TVS Digital Pte Ltd, Singapore

17. EBCO Limited, UK

18. Celerity Motor GmbH, Germany (From 06.12.2022)

Subsidiaries of GO AG

19. EGO Movement, Stuttgart GmbH, Germany Subsidiaries of SEMG

20. Swiss E-Mobility Group (Schweiz), Switzerland

21. Colag E-Mobility GmbH, Germany

22. Alexand''Ro Edouard''O Passion Velo Sarl (From 12.04.2022)

Subsidiary of Intellicar

23. Intellicar Singapore Pte Ltd [upto 24.05.2022]

Subsidiaries of Sundaram Holding USA Inc.

24. Green Hills Land Holding LLC, South Carolina, USA

25. Components Equipment Leasing LLC, South Carolina, USA

26. Sundaram-Clayton (USA) LLC, South Carolina, USA

27. Premier Land Holding LLC, South Carolina, USA

Associates

1. Emerald Haven Realty Limited, Chennai and its subsidiaries

2. TVS Training and Services Limited, Chennai

3 Sundram Non-Conventional Energy Systems Limited, Chennai

SUBSIDIARIES / ASSOCIATES TVS Motor Company Limited (TVSM)

TVSM is engaged in the business of manufacture of two and three wheelers. During the year 2022-23, TVSM''s total revenue including other income was $ 26,478.66 Cr and earned a profit after tax of $1,491.03 Cr.

TVSM for the year 2022-23, declared interim dividend of $ 5 per share (500%) absorbing a sum of $ 237.54 Cr on 47,50,87,114 equity shares of $1 each. The same was paid on 9^th February 2023.

Sundaram-Clayton (USA) Limited

Sundaram-Clayton (USA) Limited, a wholly owned subsidiary of the Company is engaged in the business of providing Professional Employer Organisation ("PEO") services to the employees of the Company.

Sundaram-Clayton DCD Limited, Chennai

Sundaram-Clayton DCD limited is a wholly owned subsidiary of the Company. This entity will carry on the business of Die-Casting upon demerger.

Sundaram Holding USA Inc., USA (SHUI) & its subsidiaries

Sundaram Holding USA Inc., USA (SHUI), a company established under the applicable provisions of Laws of The United States of America.

SHUI''s wholly owned subsidiaries are:

1. Green Hills Land holding LLC, South Carolina, USA

2. Component Equipment Leasing LLC, South Carolina, USA

3. Sundaram-Clayton USA LLC, South Carolina, USA

4. Premier Land Holding LLC, South Carolina, USA

During the year 2022-23, the Company had acquired an additional stake of 50.05% in SHUI from Sundaram Auto Components Limited (SACL), a subsidiary of the Company.

Consequent to the above acquisition, the Company''s holding in SHUI increased to 100% and thereby SHUI''s subsidiaries in USA viz., Green Hills Land Holding LLC, Component Equipment Leasing LLC, Sundaram-Clayton USA LLC and Premier Land Holding LLC have also become wholly owned subsidiaries of the Company.

Sundaram-Clayton GmbH, Germany (SCL GmbH)

The Company had acquired 25,000 shares of EUR 1/- each in Sundaram-Clayton GmbH (SCL GmbH) effective 8^th February 2023. Sundaram-Clayton GmbH (SCL GmbH), a wholly owned subsidiary of the Company is yet to commence it operations. SCL GmbH is incorporated with the objective of establishing an engineering design centre.

Sundaram Auto Components Limited (SACL)

The total income of SACL was $ 787 Cr in the current year as against $ 608 Cr in the previous year 2021-22.

SACL earned a profit before tax of $ 24.08 Cr after incurring an exceptional cost of $ 1.87 Cr during the year 2022-23 as against profit of $ 4.30 Cr in the previous year after exceptional cost of $ 6.00 Cr. Exceptional cost includes separation cost. SACL is a wholly owned subsidiary of TVSM.

TVS Housing Limited (TVSH)

TVS Housing Limited is a wholly owned subsidiary of TVSM.

TVS Motor Services Limited (TVS MS)

TVS MS was incorporated as the investment SPV of the Company, for funding TVS Credit Services Limited (TVS CS).

TVS MS now holds 0.48% only in TVS CS and TVS MS continues to be a wholly owned subsidiary of TVSM.

TVS Credit Services Limited (TVS CS)

TVS CS is the retail finance arm of the Company for financing of two wheelers. TVS CS is a Non-Banking Finance Company catering to financing of retail focussed products such as two-wheelers, used cars, used and new tractors, used commercial vehicles, consumer durables, digital finance products and personal loans. TVS CS primarily caters to self-employed, new to credit borrowers in the semi-urban and rural areas in the country.

During the year 2022-23, TVS CS''s overall disbursements registered at $ 21,652 Cr as compared to $12,533 Cr in the previous year registering growth of 73%.

During the year under review, the assets under management are around $ 20,602 Cr as against $13,911 Cr during the previous year registering a growth of 48%.

Total income during the financial year 2022-23 increased to $ 4,160 Cr from $ 2,755 Cr during the financial year 2021-22, an increase of 51% over previous year.

The profit before tax after exceptional items for the year stood at $ 511 Cr as against $ 151 Cr during the previous year registering a growth of 238%.

The following companies are the subsidiaries of TVS CS.

1. Harita ARC Private Limited, Chennai

2. TVS Housing Finance Private Limited, Chennai

3. Harita Two-wheeler Mall Private Limited, Chennai

All the above subsidiaries are yet to commence their operations.

TVS Electric Mobility Ltd, Chennai (TVSEM)

The Company was incorporated on 13^th December, 2021 to undertake Electric Mobility business. The entire shares of TVSEM have been subscribed by TVSM and hence, TVSEM is a wholly owned subsidiary of TVSM. The Company is yet to commence its operations.

TVS Motor Company (Europe) B.V

TVS Motor Company (Europe) B.V. was incorporated with a view to serve as special purpose vehicle for making and protecting the investments made in overseas operations of PT TVS.

TVS Motor (Singapore) Pte. Ltd

TVS Motor (Singapore) Pte Limited, a wholly owned subsidiary of the Company through its subsidiary TVS Digital Pte. Ltd. During the year, TVSM has invested a sum of SGD 91.53 Mn in the ordinary shares of SGD 1/- each of TVS Motor (Singapore) Pte Limited.

The Company serves as a special vehicle for investments made in overseas subsidiaries / associates.

PT. TVS Motor Company Indonesia (PT TVS)

PT TVS has posted Operating PBT of USD 5.6 Mn. for the full year.

PT TVS recorded sales of 19,096 nos. of three wheelers as against 11,043 nos. of sales during the previous year (growth of 73%) and 88,067 nos. of two wheelers as against 86,025 nos. in last year, thereby registering a growth of 2%.

The growth in sales numbers, coupled with effective management of fixed costs enabled PT TVS to achieve EBITDA of USD 8.3 Mn. (7.9% on turnover) as against USD 5.3 Mn. (6.4% on turnover) in last year.

Swiss E-Mobility Group (Holding) AG (SEMG)

During the previous year, TVSM acquired majority stake in Swiss E-Mobility Group and its subsidiaries viz., Swiss E-Mobility Group (Schweiz) and Colag E-Mobility GmbH through TVS Motor (Singapore) Pte Ltd.

The acquisition reaffirms TVSM''s commitment to expansion in Europe, largest eBike market outside of China, through a portfolio of premium and technology leading brands including EGO Movement.

SEMG is a market-leading provider of e-mobility solutions within the DACH region, operating the largest pure-play ebike retail chain m-way in Switzerland. SEMG currently has a physical network of 33 stores at strategic locations across Switzerland and two online e-commerce platforms for distribution of its products.

SEMG has strong omnichannel distribution and aspirational brands, including Cilo, Simpel, Allegro and Zenith-Bikes.

SEMG is No. 1 in Switzerland with a market share of 20%. During last calendar year 2022, SEMG Group reported a revenue of USD 69.5 Mn and a loss of USD 11.2 Mn. With further growth planned on physical stores and expansion further into the DACH region, the expected revenue for the current calendar year 2023 is around USD 104 Mn. SEMG acquisition gives an opportunity to grow in personal mobility business including e-kick scooters and e-cargo bikes which are emerging trends.

E-bikes are emerging as the leading personal mobility solution in Europe due to the increased ease of usage, regulatory support and overall perception as a sustainable form of transport. With a current penetration of approximately 15% of the total bicycle population in Europe and growing at a CAGR of ~18%, the market for the e-bicycle holds significant growth potential. The global Industry for E-bikes is expected to touch USD 25 bn in 5 years.

This acquisition of eBike business having a good market share and opportunity to drive further value will augur well for the TVSM & the Company in the long run.

The GO Corporation, Switzerland (the GO AG)

In September 2021, TVSM acquired majority stake in the GO AG, Switzerland and its subsidiary EGO Movement through TVS Motor (Singapore) Pte Ltd.

Over the past decade, the personal mobility landscape has evolved significantly with the global sustainability agenda, increasing urbanisation and advancement in battery technology.

EGO Movement''s product portfolio focuses on delivering sustainable products with the latest technology and stylish designs. A powerful battery is blended harmoniously into the frame, whose ergonomic design allows for a comfortable upright sitting position. In addition, EGO Movement''s Connectivity platform is enhancing security and convenience for the vehicle''s user with smart features such as keyless-

go, GPS location with theft alarm and access-sharing. The unique and innovative design philosophy has earned the company multiple awards, including the prestigious Red Dot Award and in 2022 the German Brand Award.

This acquisition is in line with the Company''s commitment towards electrification and the broader sustainability agenda for building an aspirational product portfolio while nurturing sustainable and scalable brands. EGO Movement is a Swiss technology company providing innovative mobility solutions through a portfolio of e-bikes, e-cargo bikes and matching accessories.

EGO Movement has a strong presence in Europe with customer-centric products, a unique omnichannel network and a visionary team at its helm.

The Norton Motorcycle Co Limited, UK

During the financial year 2022-23, The Norton Motorcycle Co. Limited (UK) (Norton) has started handing over the bikes to the Customers from the new state of art facility established in Solihull, United Kingdom.

Norton has launched new ''Commando 961 Sports'' bike with completely redesigned components. A clear distribution strategy has been established with plans to have a mix of sales direct to customer and through dealers. It has already set up few dealers in United Kingdom and has formed or firmed up its product plan with a series of new products to be launched in coming years catering to various markets and segments in the premium motorcycle market.

Norton will continue to focus on improving the quality standards and supply chain as it steps ups the production volumes and for the new products in the coming years as part of its journey of relaunching this iconic brand to its rightful place at the global level.

TVS Digital Pte Ltd, Singapore

TVS Digital Pte Limited, Singapore is a wholly owned subsidiary of TVS Motor (Singapore) Pte Limited. The Digital start-up offers a range of solutions across their Auto-tech and Fintech platforms and have secured clients in Bangladesh, Bolivia, India, Indonesia, Nepal, Philippines and Singapore.

The product offerings centre around Credit Decisioning and Collections in Fintech and a suite of Sales acceleration and Consumer Experience enhancements apps in the Auto-tech platform that is also finding applicability in Real Estate and B2B businesses.

Revenue streams have commenced and the team is now focused on exponential growth through scale and adoption to help deliver focused unit economics objectives.

Associates:

Emerald Haven Realty Limited (EHRL)

During the year, EHRL registered a sales booking value (BV) of $ 930 Cr the highest ever annual sales BV in the history of EHRL, with a growth of 189%, backed by strong sales across new launches and sustenance projects EHRL a worked on various value engineering measures to control operating and fixed costs, which helped in the operating performance of the Company.

EHRL completed 4 land acquisitions across Chennai and Bangalore with a sales BV potential of $ 1,250 Crs for the year under review. The Company has completed development of 2.4 Million Sft till date and the balance area under development as on date is 6.25 Million Sft.

Subsidiaries of EHRL

1. Emerald Haven Development Limited;

2. Emerald Haven Projects Private Limited;

3. Emerald Haven Life Spaces (Radial Road) Limited;

4. Emerald Haven Realty Developers (Paraniputhur) Private Limited;

5. Emerald Haven Property Development Limited;

6. Emerald Haven Town and Country Private Limited;

7. Happiness Harmony Property Developers Private Limited; and

8. Emerald Haven Towers Limited

TVS Training and Services Limited (TVS TSL)

TVS training services to various industries and is participating in the National Skill Development Projects. During the year, TVS TSL earned an income of $ 43.58 Cr and profit after tax for the year ended 31^st March 2023 was $ 0.71 Cr. TVSTSL is engaged in the business of establishing and providing vocational

Sundram Non-Conventional Energy Systems Limited (SNCES)

SNCES is engaged in the business of generation of power. During the year 2022-23, the SNCES earned a total revenue of $ 3.04 Cr and Profit after tax was $ 3.59 Cr.

8. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of the Act, 2013 read with the Companies (Accounts) Rules, 2014 and Regulation 33 of Listing Regulations along with a separate statement containing the salient features of the financial performance of subsidiaries / associates, in the prescribed form. The audited consolidated financial statements together with Auditors'' Report forms part of the Annual Report.

The financial statements of the subsidiary companies will be made available to the Shareholders, on receipt of a request from any

Shareholder and it has also been placed on the website of the Company. This will also be available for inspection by the Shareholders at the Registered Office during the business hours as mentioned in the Notice of AGM.

The consolidated Profit Before Tax of the Company and its subsidiaries & associates amounted to $ 2,013.32 Cr for the financial year 2022-23 as compared to $ 1,184.20 Cr in the previous year.

9. DIRECTORS & KEY MANAGERIAL PERSONNEL

Special Recognition to Mr Venu Srinivasan, Chairman Emeritus & Managing Director

Mr Venu Srinivasan was honoured with the “Outstanding Institution Builder” of the year by AIMA (All India Management Association) at its 13^th Managing India Awards in recognition of excellence in Business Leadership and Management and his significant contributions in building and shaping an institution, driving its growth, and creating a lasting legacy.

Directors'' appointment / re-appointment / cessation/ demise

During the year under review :

Mr R Gopalan, was appointed as Chairman effective 1^st April 2022 and Mr Venu Srinivasan was designated as Chairman Emeritus & Managing Director (CE & MD) effective 1^st April 2022.

Dr. Lakshmi Venu was elevated as Managing Director of the Company effective 6^th May 2022.

Mr R Gopalan ceased to be an Independent Director on 23^rd July 2022 consequent to the expiry of second term of Independent Directorship. He was subsequently appointed as Non-Executive Non-Independent Director on the Board effective 29^th July 2022, on the recommendation of the Nomination and Remuneration Committee with the approval of the shareholders through postal ballot on 7^th September 2022.

Mr Anuj Shah and Mr C R Dua, Directors were appointed as NonExecutive Independent Director(s) (NE-ID) for a term of five consecutive years with effect from 29^th July 2022 and 13^th March 2023, respectively, on the recommendation of the Nomination and Remuneration Committee (NRC). The shareholders have approved their appointment by way of special resolution through postal ballot on 7^th September 2022 and 27^th April 2023, respectively.

NRC had carried out evaluation of the appointed Directors before the appointment on various parameters viz., integrity, qualification, expertise, experience and it has satisfied itself with the positive attributes of the Directors in accordance with the Nomination and Remuneration (NR) Policy read with the provisions of Section 178 of the Act, 2013 and the Listing Regulations.

Directors'' cessation / demise

During the Year under review, Mr S Santhanakrishnan, Mr Kamlesh Gandhi, Mr V Subramanian and Mr R Vijayaraghavan ceased as Independent Directors effective 20^th August 2022 consequent to the expiry of second term as Independent Directors and thereby they also ceased as members of Committees wherever they held membership.

The Board recorded its appreciation on the contributions made by Mr S Santhanakrishnan, Mr V Subramanian, Mr R Vijayaraghavan and Mr Kamlesh Gandhi and also their uniqueness in handling issues to the granularity which made an indelible impression on all directors of the Company.

The Board noted and appreciated the strategic initiatives, inquisitive nature in dealing with operational issues by the Independent Directors, insights and guidance provided to the management especially in legal, Banking and financial management made the Board as an accomplished one.

With profound grief, the Board condoles the demise of Vice Admiral P J Jacob, Independent Director of the Company, on 22^nd January 2023. Vice Admiral P J Jacob had been associated with the group for more than sixteen years. The Board records the excellent contribution made by Vice Admiral P J Jacob during his tenure as an Independent Director of the Company.

In terms of the provisions of sub-section (6) read with explanation to Section 152 of the Act, 2013 two-thirds of the total number of Directors i.e., excluding IDs, are liable to retire by rotation and out of which, one-third is liable to retire by rotation at every annual general meeting. Mr Venu Srinivasan and Mr Rajesh Narasimhan are liable to retire by rotation, at the ensuing AGM, and being eligible, offer themselves for re-appointment.

The Directors have recommended their re-appointment for the approval of shareholders. Brief resume of the Directors are furnished in the Notice convening the AGM of the Company.

Independent Directors (IDs)

All IDs hold office for a fixed term of five years and are not liable to retire by rotation.

As at 31^st March 2023, M/s C R Dua, Anuj Shah and Sasikala Varadachari are the Independent Directors of the Company.

Ms Sasikala Varadachari was appointed by the Board effective 24^th October 2018 as NE-ID for a term of five consecutive years effective that date and the same was approved by the shareholders at the 57^th AGM held on 23^rd July 2019.

The terms of appointment of IDs include the remuneration payable to them by way of fees and profit related commission, if any.

The terms of IDs cover, inter-alia, duties, rights of access to information, disclosure of their interest / concern, dealing in Company''s shares, remuneration and expenses, insurance and indemnity. The IDs are provided with copies of the Company''s policies and charters of various Committees of the Board.

In accordance with Section 149(7) of the Act, 2013, all IDs have declared that they met the criteria of independence as provided under Section 149(6) of the Act, 2013 and Regulation 25 of the Listing Regulations and the Board confirms that they are independent of the management.

The detailed terms of appointment of IDs is disclosed on the Company''s website in the link as provided in page no. 93 of this Annual Report.

All the IDs have registered with the databank of Independent Directors developed by the Indian Institute of Corporate Affairs in accordance with the provisions of Section 150 of the Companies Act, 2013 and obtained ID registration certificate and renewed the same for five years / life time, as the case may be.

Separate meeting of Independent Directors

During the year under review, a separate meeting of IDs was held on 27^th March 2023.

Based on the set of questionnaires, complete feedback on NonIndependent Directors and details of various activities undertaken by the Company were provided to IDs to facilitate their review / evaluation.

(a) Non-Independent Directors (Non-IDs)

IDs used various criteria prescribed by the Nomination and Remuneration Committee (NRC) for evaluation of Non-IDs and Executive Directors viz., M/s. Venu Srinivasan, Dr. Lakshmi Venu and Mr K Gopala Desikan and Non-IDs viz., M/s. Sudarshan Venu, Rajesh Narasimhan and R Gopalan and also of Chairman of the Board and the Board as a whole, for the year 2022-23.

IDs evaluated the performance of all Non-IDs individually, through a set of questionnaires. They reviewed the developing strategic plans aligned with the vision and mission of the Company, displaying leadership qualities for seizing the opportunities and priorities, developing and executing business plans aware of the risks involved, establishing an effective organizational structure, and demonstrating high ethical standards and integrity and commitment to the organization besides participation at the Board / Committee meetings, effective deployment of knowledge and expertise and constructive comments/ guidance provided to management by the Non-IDs.

They have also noted the milestones achieved by the Company during the year under review.

IDs were satisfied fully with the performance of all Non-IDs.

(b) Chairman

The IDs reviewed the performance of Chairman of the Board.

The IDs also placed on record their appreciation of Chairman''s high level of integrity & objectivity and judicious approach, and brings his vast experience, helps to steer Board discussions and decisions for the benefit of the Company and Shareholders.

(c) Board

IDs also evaluated Board''s composition, size, mix of skills and experience, its meeting sequence, effectiveness of discussion, decision making, follow up action, so as to improve governance and enhance personal effectiveness of Directors.

The evaluation process focused on Board Dynamics and the Board upon evaluation concluded that it is well balanced in terms of diversity of experience with expert in each domain viz., Engineering, Leadership/ Strategy, Finance, Information Technology, Marketing, Legal and

Regulatory and Governance. The Company has a Board with wide range of expertise in all aspects of business.

IDs recorded that they were always kept involved through open and free discussions and provided additional inputs in emerging areas being forayed into by the Company and high levels of Corporate Governance in all management discussion and decisions were maintained.

The IDs unanimously evaluated the prerequisites of the Board viz., formulation of strategy, acquisition & allocation of overall resources, setting up policies, directors'' selection processes and cohesiveness on key issues and satisfied themselves that they were adequate.

They were satisfied with the Company''s performance in all fronts and finally concluded that the Board operates with best practices.

(d) Quality, Quantity and Timeliness of flow of Information between the Company, Management and the Board

All IDs have expressed their overall satisfaction with the support received from the management and the excellent work done by the management during the year under review and also the relationship between the top management and Board is smooth and seamless.

The Company is in compliance with the statutory requirements under both the Companies Act and Listing Regulations and all the information provided to the Directors are very wholesome.

The information provided for the meetings were clear, concise and comprehensive to facilitate detailed discussions and periodic external presentations on specific areas well supplemented the management inputs. The emerging e-technology was duly incorporated in the overall review of the Board.

KEY MANAGERIAL PERSONNEL (KMP)

Mr Venu Srinivasan, Chairman Emeritus & Managing Director, Dr. Lakshmi Venu, Managing Director, Mr K Gopala Desikan, Director and Group Chief Financial Officer, Mr Vivek S Joshi, Chief Executive Officer, and Mr R Raja Prakash, Company Secretary are the ''Key Managerial Personnel'' of the Company in terms of Section 2(51) read with Section 203 of the Act, 2013 as on date of this Report.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee of Directors (NRC) reviews the composition of the Board to ensure an appropriate mix of abilities, experience and diversity to serve the interests of all stakeholders of the Company.

Nomination and Remuneration Policy was approved by the Board at its meeting held on 24^th September 2014 and amended from time-to-time to maintain consistency and statutory amendments to be reflected in the policies to make it upto date and more comprehensive. The objective of such policy shall be to attract, retain and motivate executive management and devise remuneration structure to link to Company''s strategic long term goals, appropriateness, relevance and risk appetite.

NRC will identify, ascertain the integrity, qualification, appropriate expertise and experience, having regard to the skills that the candidate will bring to the Board / Company, whenever the need arises for appointment of Directors / KMP.

Criteria for performance evaluation, disclosures on the remuneration of Directors, criteria of making payments to Non-Executive Directors have been disclosed as part of Corporate Governance Report attached herewith.

Remuneration payable to Non-Executive Independent Directors

The shareholders at the 59^th AGM held on 30^th July 2021 renewed the authorization for the payment of remuneration by way of commission not exceeding 1% of the net profits, in aggregate, payable to NonExecutive and Independent Directors of the Company (NE-IDs) for every year, from 1^st April 2021.

NE-IDs devote considerable time in deliberating the operational and other issues of the Company and provide valuable advice in regard to the management of the Company from time to time, and the Company also derives substantial benefit through their expertise and advice.

Evaluation of Independent Directors and Committees of Directors

In terms of Section 134 of the Act, 2013 and the Corporate Governance requirements as prescribed under Listing Regulations, the Board reviewed and evaluated Independent Directors and various Committees viz., Audit Committee, Risk Management Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders'' Relationship Committee, based on the evaluation criteria laid down by the NRC.

Board has carried out the evaluation of all Directors (excluding the Director being evaluated) and its Committees through a set a questionnaires.

Independent Directors

The performance of all IDs were assessed against a range of criteria such as contribution to the development of business strategy and performance of the Company, understanding the major risks affecting the Company, clear direction to the management and contribution to the Board cohesion. The performance evaluation has been done by the entire Board of Directors, except the Director concerned being evaluated.

The IDs were always kept informed of the constitution of robust framework for the Company and group companies against cyber threats and mitigation plans against cyber-attacks for business continuity.

They also kept abreast of risk mitigation plans on Business risks viz., depreciation of currency, global economic scenarios, increasing material cost and global inflationary pressure. They also evaluated and satisfied with the risk mitigation on CoVID preparedness, to minimize the impact on business operations and employees health, from its previous learnings.

The Board noted that all IDs have understood the opportunities and risks to the Company''s strategy and are supportive of the direction

articulated by the management team towards consistent improvement.

On the basis of the report of performance evaluation of directors, the Board noted and recorded that all the directors should extend and continue their term of appointment as Directors / Independent Director, as the case may be.

Committees

Board delegates specific mandates to its Committees, to optimize Directors'' skills and talents besides complying with key regulatory aspects.

• Audit Committee for overseeing financial Reporting;

• Risk Management Committee for overseeing the risk management framework;

• Nomination and Remuneration Committee for selecting and compensating Directors / Employees;

• Stakeholders'' Relationship Committee for redressing investors grievances; and

• Corporate Social Responsibility Committee for overseeing CSR initiatives and inclusive growth.

The performance of each Committee was evaluated by the Board after seeking inputs from its members on the basis of specific terms of reference, its charter, time spent by the Committees in considering key issues, quality of information received, major recommendations / action plans and work of each Committee.

The Board is satisfied with the overall effectiveness and decision making of all Committees. The Board reviewed each Committee''s terms of reference to ensure that the Company''s existing practices remain appropriate.

Directors continued to devote such time as is necessary for the proper performance and effectively discharge their duties, all of them were able to devote appropriate time to fulfill their duties

Board and its Committees had an appropriate combination of skills, experience and knowledge.

The current Committees structure was considered effective and all the Committees of the Board were all considered to be working effectively.

Recommendations from each Committee were considered and approved by the Board prior to its implementation, wherever necessary and there were no items where the Board had not accepted any recommendation of any Committee of the Board in the relevant financial year.

Details of Committees, its charter, functions are provided in the Corporate Governance Report attached to this Report.

Number of Board meetings held:

During the FY 2022-23, the Board met eight times and details of the meetings are provided as part of Corporate Governance Report prepared in terms of the Listing Regulations.

10. AUDITORS Statutory Auditors

The Company at its Sixtieth AGM held on 28^th June 2022 re-appointed M/s Raghavan, Chaudhuri & Narayanan, Chartered Accountants, Bengaluru, having Firm Registration No. 007761S allotted by The Institute of Chartered Accountants of India, as Statutory Auditors of the Company to hold office, for the second term of five consecutive years, from the conclusion of the said AGM till the conclusion of the 65^th AGM, at such remuneration in addition to applicable taxes, and reimbursement of travelling and other out of pocket expenses as may be mutually agreed between the Board of Directors of the Company on the recommendations of the Audit Committee and the Auditors.

The Company has obtained necessary certificate under Section 141 of the Act, 2013 conveying their eligibility for being statutory auditors of the Company for the year 2023-24.

The Auditors'' Report for the financial year 2022-23 does not contain any qualification, reservation or adverse remark and the same is attached with the annual financial statements.

Secretarial Auditor

As required under Section 204 of the Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company is required to appoint a Secretarial Auditor for auditing secretarial and related records of the Company.

The Secretarial Audit Report for the financial year 2022-23, given by Mrs B Chandra, Practising Company Secretary, Chennai for auditing the secretarial and related records is attached to this report. The Secretarial Audit Report does not contain any qualification, observation or other remarks.

The Board at its meeting held on 5^th May 2023 has re-appointed Mrs B Chandra, Practising Company Secretary, Chennai, (CP No. 7859) as Secretarial Auditor for the financial year 2023-24.

Cost Auditor

As per Section 148 of the Act, 2013 read with the Companies (Cost Records and Audit) Rules 2014, as amended, the cost audit records maintained by the Company in respect of parts manufactured by the Company covered under other machinery specified under Customs Tariff Act heading in Table B to Rule 3 of the above rules, are required to be audited by a Cost Auditor.

Mr A N Raman, Practicing Cost Accountant, having Registration No. 5359 allotted by The Institute of Cost Accountants of India, was re-appointed as Cost Auditor of the Company at the Board meeting held on 6^th May 2022 to carry out the audit as per the aforesaid provisions of the Companies Act, 2013 for the financial year 2022-23. His remuneration was also ratified by the members at the 60^th AGM held on 28^th June 2022.

In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board has appointed M/s C S Adawadkar & Co., Practising Cost Accountants, having Firm Registration No. 100401 allotted by

The Institute of Cost Accountants of India, as Cost Auditor of the Company, on the recommendation of the Audit Committee, in the place of Mr A N Raman, Practising Cost Accountant, in terms of Section 148 of the Act, 2013, as the Cost Auditor for conducting Cost Audit for the financial year 2023-24.

The Company has received consent from M/s C S Adawadkar & Co., Practicing Cost Accountants, to serve as Cost auditors of the Company for the financial year 2023-24.

The Company has also received necessary certificate under Section 141 of the Act, 2013 from them conveying their eligibility to act as a Cost Auditor.

A sum of $ 5 lakhs has been fixed by the Board as remuneration in addition to applicable taxes, and reimbursement of travelling and other out-of-pocket expenses payable to him, for the financial year 2023-24, which is required to be approved and ratified by the Members, at the ensuing AGM as per Section 148(3) of the Act, 2013.

Directors place on record their deep appreciation of the valuable service rendered by Mr A N Raman, Cost Accountant, Chennai.

The Company has filed the Cost Audit Report of 2021-22 on 26^th August 2022 in XBRL format.

11. CORPORATE GOVERNANCE

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

A separate section on Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under the Listing Regulations form part of this Annual Report.

The Chairman Emeritus & Managing Director and the Director and Group Chief Financial Officer of the Company have certified to the Board on financial statements and other matters in accordance with Regulation 17(8) of the Listing Regulations, 2015 pertaining to CEO / CFO certification for the financial year ended 31^st March 2023.

12. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") read with relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed under "Business Responsibility and Sustainability Report" (''BRSR''). The BRSR seeks disclosure on the performance of the Company against nine principles of the "National Guidelines on Responsible Business Conduct'' (''NGRBCs'').

As per the SEBI Circulars, effective from the financial year 2022-23, filing of BRSR is mandatory for the top 1000 listed companies by market capitalisation. Accordingly, for the financial year ended 31^st March 2023,

Company has published BRSR, in the prescribed format is given as Annexure IV to this Report and is available on the Company''s website in the link as provided in page no. 93 of this Annual Report.

13. POLICY ON VIGIL MECHANISM

The Company has adopted a Policy on Vigil Mechanism in accordance with the provisions of the Act, 2013 and Regulation 22 of the Listing Regulations, which provides a formal mechanism for all Directors, Employees and other Stakeholders of the Company to report to the management, their genuine concerns or grievances about unethical behaviour, actual or suspected fraud and any violation of the Company''s Code of Business Conduct and Ethics.

The Code also provides a direct access to the Chairman of the Audit Committee to make protective disclosures to the management about grievances or violation of the Company''s Code.

The Policy is disclosed on the Company''s website in the link as provided in page no. 93 of this Annual Report.

14. PUBLIC DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Section 76 of the Act, 2013, for the year ended 31^st March 2023.

15. STATUTORY STATEMENTS

Information on conservation of energy, technology absorption, foreign exchange, etc.,

Relevant information is given in Annexure-I to this Report, in terms of the requirements of Section 134(3)(m) of the Act, 2013 read with the Companies (Accounts) Rules, 2014.

Material changes and commitments, if any, affecting the financial position of the Company, having occurred since the end of the Year and till the date of the Report:

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

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

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

Annual Return

Copy of the Annual Return (Annexure II) in prescribed form is available on the Company''s website in the link as provided in page no. 93 of this Annual Report, in terms of the requirements of Section 134(3)(a) of the Act, 2013 read with the Companies (Accounts) Rules, 2014.

Employee''s remuneration

Details of employees receiving the remuneration in excess of the limits prescribed under Section 197 of the Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as a statement and given in Annexure-III. In terms of first proviso to Section 136(1) of the Act, 2013 the Annual Report, excluding the aforesaid annexure is being sent to the Shareholders of the Company. The annexure is available for inspection at the Registered Office of the Company during business hours as mentioned in the Notice of AGM and any Shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

Comparative analysis of remuneration paid

A comparative analysis of remuneration paid to Directors and employees with the Company''s performance is given as Annexure-V to this Report.

Details of material related party transactions

There are no material related party transactions under Section 188 of the Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

Details of loans / guarantees / investments made

During the year under review, the Company had not granted any loans or guarantees covered under Section 186 of the Act, 2013.

Please refer note no. 4 to Notes on accounts for the financial year 2022-23, for details of investments made by the Company.

Reporting of fraud

The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act, 2013.

Secretarial Standards

The Company has complied with the applicable secretarial standards as amended from time to time.

General Disclosures

During the year, there were no transaction requiring disclosure or reporting in respect of matters relating to:

(a) issue of equity shares with differential rights as to dividend, voting or otherwise;

(b) issue of shares (including sweat equity shares) to employees of the Company under any scheme;

(c) pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016 and

(d) instance of one-time settlement with any bank or financial institution.

Disclosure in terms of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH), the Company has an Internal Complaints Committee as required under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, there were no cases filed pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year 2022-23, initiatives were undertaken to demonstrate Company''s zero tolerance policy against discrimination and sexual harassment, which included creation of comprehensive and easy to understand training and communication material. In addition, online workshops were also run for the employees to enhance awareness and knowledge.

16. ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and cooperation received from the promoters of the Company.

The Directors thank the vehicle manufacturers, vendors and bankers for their continued support and assistance.

The Directors wish to place on record their appreciation of the continued excellent work done by all the employees of the Company during the year.

The Directors specially thank the shareholders for their continued faith in the Company.

For and on behalf of the Board of Directors R GOPALAN

Chennai Chairman

5^th May 2023 DIN: 01624555

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Mar 31, 2019

Directors’ report to the shareholders

The directors have pleasure in presenting the 57^th annual report and the audited financial statements for the year ended 31^st March 2019.

1. FINANCIAL HIGHLIGHTS

(Rs. in Cr)

Particulars	Year ended 31.03.2019	Year ended 31.03.2018
Sales (including Excise duty) and other income	1932.94	1766.74
EBITDA	277.83	107.75
Less: Finance Cost	55.16	33.70
Depreciation	92.19	73.21
Profit before tax	130.48	0.84
Provision for tax	10.82	(54.08)*
Profit after tax	119.66	54.92
Add: Balance in Statement of Profit and Loss including General Reserve	450.93	426.15
Transfer from Other Comprehensive Income	-	0.21
Total Comprehensive Income available	570.59	481.28
Appropriations: Dividend	72.83	30.35
Surplus carried forward	497.76	450.93
Total	570.59	481.28

* After considering MAT credit and deferred tax asset

2. DIVIDEND

The Board of Directors of the Company (the Board) at its meeting held on 25^th January 2019, declared a first interim dividend of Rs. 20 per share (400%) for the year 2018-19, absorbing a sum of Rs. 40.46 Cr. The same was paid to the shareholders on 7^th February 2019.

The Board at its meeting held on 11^th March 2019 declared a second interim dividend of Rs. 16 per share (320%) for the year 2018-19 absorbing a sum of Rs. 32.37 Cr. The same was paid to the shareholders on 22^nd March 2019.

Thus, the total amount of both the dividends for the year ended 31^st March 2019 aggregated to Rs. 36 per share (720%) on 2,02,32,085 equity shares of Rs. 5/- each absorbing Rs. 72.83 Cr.

The Company has set-off its dividend distribution tax payable under Section 115-O(1A) of the Income Tax Act, 1961 against the dividend distribution tax paid by one of its subsidiary company on its dividend declared.

The Board does not recommend any further dividend for the year under consideration.

3. PERFORMANCE

India’s real gross domestic product (GDP) is expected to grow at 7% in FY19 as against 7.2% in FY18. The growth of the “Manufacturing” sector is expected to accelerate to 8.3% this fiscal, up from 5.7% in FY18.

Global economic and geo political environment continued to be volatile during 2018.The GDP in the U.S. and EU markets registered a growth of 2.9% (2.2% in 2017) and 1.8% (2.4% in 2017).

During the year, the Company was able to meet the customers demand out of the capacities created last year without resorting to outsourcing and premium air freight (which had impacted FY 2017-18 profits), resulting in improved profits for the current year.

The following table highlights the performance of the Company during 2018-19:

Particulars	FY 2018-19	FY 2017-18	Variance (in %)
Sales (Tonnage)	48,969	50,592	-3.20%
Sale of goods (Rs. in Cr)	1,746.03	1543.79	13.10%
Domestic sales (Rs. in Cr)	959.12	903.59	6.15%
Export sales (Rs. in Cr)	786.91	640.20	22.92%
Profit After Tax (Rs. in Cr)	119.66	54.92	117.88%

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

I. INDUSTRY STRUCTURE AND DEVELOPMENT:

Domestic

The segment wise performance in the Indian automotive industry is given in the following table.

(in Nos)

Category	FY 2018-19	FY 2017-18	Variance (in %)
Two Wheelers	2,44,62,231	2,30,15,120	6.28%
Passenger Vehicles	40,53,629	40,36,947	0.41%
Commercial Vehicles	4,73,702	4,13,966	14.43%
(M&HCV)

(Source: SIAM DICV internal estimate)

The Indian auto industry (domestic sales and exports) posted an overall growth of 6.45% (Source: SIAM). The automotive and related industries witnessed several headwinds in FY 2018-19 spaced out throughout the year such as floods in Kerala, increase in insurance premium, high fuel prices in the second quarter, new axle norms, safety regulations and rise in lending rate due to liquidity crunch, all of which hindered the industry’s performance.

Exports

The following table highlights the North American and European truck registration figures in vehicle units:

(in Nos)

Market	Category	FY 2018-19	FY 2017-18	Variance (in %)
North America	Class 8 Trucks	3,27,074	2,62,057	24.81%
North America	Class 4-7 Trucks	2,70,082	2,56,279	5.38%
Europe	Medium & Heavy Trucks	3,11,589	3,03,989	2.50%

(Source: FTR & ACEA)

The Class 8 truck market in North America has outperformed the forecasted sales figures for the year. For the year 2018, Class 8 orders crushed a 14-year industry record for heavy-duty truck orders. The market scenario has now shifted from ‘demand constrained market’ to a ‘Supply constrained market’. France, Italy and Germany contributed positively to the full-year growth of European heavy trucks market.

BUSINESS OUTLOOK AND OVERVIEW

The RBI’s Monetary Policy Committee has assessed the GDP growth at 7.2% in FY20 due to combination of weakening of domestic investment activity, moderation of growth in the global economy might impact India’s exports and possible downside risk from monsoon.

Recent Government actions on improving income for farmers and lower middle class can support improved consumption. Slower pace of monetary tightening than previously expected and ease in inflation pressures may help sustain growth rate at current levels.

The focus of the Interim Budget 2019 on the rural sector is a positive development as it would support rural incomes and investment, and in turn provide a further push to aggregate demand and economic activities.

Implementation of key structural reforms with emphasis on growth could revive the economy and provide the industries with the much-needed stimulus for growth. Given the economic outlook, the automobiles and auto-component sectors are expected to see a flat growth year in FY 2019-20.

Over the medium to long term, growth in the auto component industry is likely to be higher than the underlying automotive industry growth given the increasing localization by OEMs and higher component content per vehicle. Auto component export is another key growth driver.

Globally, IMF expects global growth to be at 3.5% in 2019 (3.7% in 2018).

Changing trade policies of USA, Brexit and unforeseen challenges in Chinese economy can lead to escalation of uncertainty in global economic growth. Crude prices are expected to remain at the increased level of Q4 2018-19 during 2019-20 and may lead to higher costs for customers and OEMs.

The EU GDP is expected to grow at 1.6%. The slower momentum can be attributed to the introduction of new automobile fuel emission standards in Germany, concerns about sovereign and financial risks in Italy and the potential “no-deal” withdrawal of the United Kingdom from the European Union. The EU commercial vehicles demand (M&HCV segment) in 2019 is expected to go down by 3-5%.

OPPORTUNITIES & THREATS

The Company supplies aluminum castings for commercial vehicles, passenger cars and two-wheeler segments of the automotive industry.

The revenue of the Company is derived from Medium & Heavy Commercial Vehicles (MHCV) (58%), followed by two-wheeler industry (24%) and car industry (18%) .

In the medium to long term, the projected growth of domestic auto industry and ambitious export plans of the Indian OEMs are likely to benefit the Company.

In view of stringent emission norms and fuel economy regulations, the thrust towards light-weighting is bound to increase leading to higher content of aluminum in all types of vehicles. The Company is well placed to leverage these emerging opportunities. This will provide for increased growth opportunities, since the Company is already a preferred source for aluminum castings to major OEM’s in India and abroad.

India is emerging as one of the major manufacturing hubs, thanks to availability of well-educated engineers, skilled workforce, good supply base and initiatives by the Government.

Several Indian die casting companies and OEMs are either setting up new capacities or expanding existing capacities resulting in increased competition.

Intense competition makes it extremely difficult to seek price increases to compensate the effects of inflation bringing the margins under severe pressure. However, the Company’s supply contracts provide for periodic price adjustments indexed to the international prices of aluminum and this should offer protection against volatility of commodity prices.

RISKS AND CONCERNS

Economy

There are possible risks on the horizon, both global and domestic. Global economic slowdown, changes in monetary policies of advanced economies, tariff wars and volatility in oil prices could affect India’s growth.

Good monsoon aids growth in domestic demand due to a significant share from rural markets. Any negative deviation from normal monsoon is a cause of concern.

In India, Government’s fiscal consolidation, liquidity concerns, monetary policy changes and poor monsoon could dampen the domestic market.

Industry specific

The Indian commercial vehicle industry is a strong indicator of the economic activity in the country and has a strong correlation with the agricultural growth, infrastructure development, the mining industry and is also cyclical.

The global automotive industry is experiencing the situation of a cyclical demand slowdown. Competition has increased in the Indian market due to entry of new players and expansion plans of existing ones. The Company is aware of the increasing competition and is taking customer focused measures to remain competitive in the market place.

Prices of aluminum have largely trended downward in 2018-19, interrupted only by a sharp and short-lived upturns. China’s slowing growth, exacerbated by the trade war with the US, has pushed down prices. Price gains are likely to be limited in 2019-20.

Forex

With significant exports, import of raw materials and capital goods, the Company is always exposed to impact on account of currency fluctuations. However, the Company has a well-defined forex hedging policy to mitigate the risks.

Contractual

The stipulation and requirements of the automobile industry demands high quality products. Robust quality management systems meeting international standards like IATF 16949 are in place to ensure excellent product quality. Additionally, the Company has also taken appropriate recall and product liability insurance in line with standard industry practice.

Just-in-time delivery is another important contractual obligation. Robust quality and project management systems are in place to avoid delay in deliveries due to quality issues or project implementation.

Capacity utilization

The Company adds capacity, in existing and new locations, to meet the projected demand of customers. The Company closely monitors the progress of customer projects / volumes and appropriately deploys the assets to protect from both underutilization and capacity shortages to meet the demand.

Risk Management Policy

The Board has established a robust Risk Management framework to identify, monitor and minimize risks as well as to identify business opportunities.

Risk evaluation and management is an ongoing process. As a process, risks associated with the business are identified and prioritized based on the Company’s overall risk appetite, strategy, severity and probability of occurrence. Process owners are identified for each risk and metrics are developed for continuous monitoring and minimization of risk.

The Board is satisfied that there are adequate systems and procedures in place to identify, assess, monitor and manage risks. The Company’s Risk Management Committee is overseeing all the risks that the organization faces such as strategic, financial, market, IT, legal, regulatory, reputational and other risks and recommends suitable action. Risk Mitigation Policy has already been approved by the Board.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded. Information provided to management is reliable and timely. The Company ensures adherence to all statutes.

KEY FINANCIAL RATIOS

Particulars	Unit of measurement	Standalone		Consolidated
		2017-18	2018-19	2017-18	2018-19
Interest Coverage Ratio	Times	1.02	3.37	2.69	2.04
Operating Profit Margin (EBITDA)	%	0.81	9.71	8.63	10.87
Net Profit Margin	%	0.05	6.75	4.66	5.18
Return on Net worth	%	8.75	17.96	11.02	11.93

During 2018-19, the Company made Profit Before Tax of Rs. 130.48 Cr as against Rs. 0.84 Cr made during 2017-18. This has consequently resulted in improved ratios in 2018-19 both for standalone and consolidated results.

Internal Financial Control

The Company has an established Internal Financial Control framework including internal controls over financial reporting, operating controls and anti-fraud framework. The framework is reviewed regularly by the management and tested by internal audit team and presented to the Audit Committee. Based on periodical testing, the framework is strengthened, from time to time, to ensure adequacy, accuracy and completeness of accounting records, timely preparation of reliable financial information and effectiveness of Internal Financial Controls.

OPERATIONS REVIEW

Manufacturing

The Company has been using Total Quality Management (TQM) as the foundation of its management. The Company implemented the best practices like Total Productivity Management (TPM) and Lean Manufacturing (TPS) in its manufacturing facilities. It also has in place best-in-class practices for safety, pollution control, work environment, water and energy conservation.

Continuous improvement projects are implemented to improve the product quality and productivity in all the manufacturing locations. The Company’s journey of achieving manufacturing excellence was recognized and rewarded by the following customers during FY 2018-19.

- Hyundai Motor India Limited - Best production support

- Cummins - Rating of O - Outstanding supplier

Quality

Achieving customer delight by consistently providing products of excellent quality is the prime motto of the Company. This is achieved through state-of-the-art technology, training, effective quality system, continuous improvement and total employee involvement.

Poka-yokes, process audits, use of statistical tools for process optimization and online process controls also contribute towards improving and achieving consistency in product quality. The quality system is certified for IATF 16949 requirements.

TQM is a way of life in the Company. 100% employee involvement has been successfully achieved for many years.

Employees have completed 486 projects by applying statistical tools through Quality Control Circles (QCC) in 2018-19. The average number of suggestions implemented per employee was 39.

Cost Management

Cost management is a continuous journey and the Company manages the same through deployment of costs across all departments. A cross functional team is working on projects focussed on Value Added/Value Engineering (VA/VE) and operational efficiency. TPM and lean initiatives are deployed Company-wide, to achieve reduction in manufacturing cost.

Information Technology

The Company uses ERP system that integrates all business processes across the Company. Suppliers and customers are also integrated into the system for better planning and execution. During the year, several dashboards were added to improve the productivity, quality and reduce the cost of operations. Projects were also implemented to further enhance the Information Security.

HUMAN RESOURCE DEVELOPMENT

The Company considers employees as vital and most valuable assets. Human Resource Development (HRD) is aligned to business needs to enhance business performance and results. HRD is practiced through an overall HRD framework with its constituents as resourcing, employee engagement, performance & compensation management, competency based development, career & succession planning and organization development. Each of these constituent has a structured approach and process to deliver.

As a part of the long term strategies of the Company, collaborative education program has been initiated with three reputed institutes to develop role-ready engineers with Company-specific knowledge at the entry level.

Career development workshop is conducted to identify high potential employees. Such employees are groomed for taking up higher responsibilities. A reward and recognition system is in place to motivate and also provide fast track growth for the high potential employees.

The engineers and executives of the Company are sponsored for advanced study, offered by both Indian and foreign institutions. Customized technical and leadership competency improvement programs are developed and delivered through reputed institutions.

The Company continuously measures and reports employee engagement every year and identifies improvement areas to work on.

An excellent industrial relations environment continues to prevail at all the manufacturing units of the Company.

As on 31^st March 2019, the Company had around 2,318 employees on its rolls.

ENVIRONMENT, HEALTH & SAFETY

The Company is fully committed to the ultimate goal of employee safety. Safety management is integrated with the overall Environment, Health and Safety (EHS).

The Company has been certified under Integrated Management System (IMS) combining ISO 14001 and OHSAS 18001 systems and procedures.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Company’s objectives, projections, estimates and expectations may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include, amongst others, economic conditions affecting demand / supply and price conditions in the domestic and overseas market in which the Company operates, changes in the Government Regulations, Tax Laws and Other Statutes and Incidental Factors.

5. DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, (the Act, 2013) with respect to Directors’ Responsibility Statement, it is hereby stated that -

i. in the preparation of annual accounts for the financial year ended 31^st March 2019, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;

ii. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

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

iv. the Directors had prepared the accounts for the financial year ended 31^st March 2019 on a “going concern basis”;

v. 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

vi. 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.

6. CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR activities have already been textured into the Company’s value system through Srinivasan Services Trust (SST), established in 1996 with the vision of building self-reliant rural community.

Over 23 years of service, SST has played a pivotal role in changing lives of people in rural India by creating self-reliant communities that are models of sustainable development.

The Company is eligible to spend on their ongoing projects / programmes, falling within the CSR activities specified under the Act, 2013, as mandated by the Ministry of Corporate Affairs for carrying out the CSR activities.

The Committee formulated and recommended a Corporate Social Responsibility policy in terms of Section 135 of the Act, 2013, along with a list of projects / programmes to be undertaken for CSR spending in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Based on the recommendation of the CSR Committee, the Board has approved the projects / programmes carried out as CSR activities by Sri Sathya Sai Central Trust having an established track record for more than the prescribed years in undertaking similar programmes / projects, constituting more than 2% of the average net profits of the Company, made during the three immediately preceding financial years, towards CSR spending for the financial year 2018-19 amounting to Rs. 25 Lakhs.

As required under Section 135 of the Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR, containing the particulars of the projects / programmes approved and recommended by CSR Committee and approved by the Board for the financial year 2018-19 are given by way of Annexure-IV attached to this Report.

7. PERFORMANCE OF SUBSIDIARIES & ASSOCIATES

The following companies and bodies corporate are the subsidiaries / associates of the Company:

Subsidiaries

1. TVS Motor Company Limited, Chennai;

2. Sundaram Auto Components Limited, Chennai;

3. TVS Housing Limited, Chennai;

4. TVS Motor Services Limited, Chennai;

5. TVS Credit Services Limited, Chennai;

6. TVS Two-wheeler Mall Private Limited, Chennai;

7. TVS Micro Finance Private Limited, Chennai;

8. Harita ARC Private Limited, Chennai;

9. Harita Collection Services Private Limited, Chennai;

10. TVS Commodity Financial Solutions Private Limited, Chennai;

11. TVS Housing Finance Private Limited, Chennai;

12. Sundaram-Clayton (USA) Limited, USA;

13. TVS Motor Company (Europe) B.V., Amsterdam, Netherlands;

14. TVS Motor (Singapore) Pte. Limited, Singapore;

15. PT TVS Motor Company Indonesia, Jakarta;

16. Sundaram Holding USA Inc, Delaware, USA;

17. Green Hills Land Holding LLC, South Carolina, USA;

18. Components Equipment Leasing LLC, South Carolina, USA;

19. Sundaram-Clayton (USA) LLC, South Carolina, USA; and

20. Premier Land Holding LLC, South Carolina, USA.

Associates

1. Emerald Haven Realty Limited, Chennai and its subsidiaries;

2. TVS Training and Services Limited, Chennai; and

3. Sundram Non-Conventional Energy Systems Limited, Chennai

SUBSIDIARIES / ASSOCIATES

TVS Motor Company Limited (TVSM)

TVSM is engaged in the business of manufacture of two and three wheelers. During the year 2018-19, TVSM achieved a turnover of Rs.18,217 Cr and earned a profit after tax of Rs. 670 Cr.

TVSM for the year 2018-19, declared first interim dividend of Rs.2.10 per share (210%) absorbing a sum of Rs.120.28 Cr including dividend distribution tax and a second interim dividend of Rs.1.40 per share (140%) absorbing a sum of Rs.79.70 Cr including dividend distribution tax.

Hence, the total amount of dividend for the year ended 31^st March 2019 aggregated to Rs.3.50 per share (350%) on 47,50,87,114 equity shares of Rs.1 each.

Sundaram Auto Components Limited (SACL)

Total revenue of SACL for the year 2018-19 was Rs.601.16 Cr as against Rs.1,143.37 Cr in the previous year. The decrease was mainly due to substantial reduction of business in automobile trading division post introduction of GST, effective 1^st July 2017.

SACL earned a Profit Before Tax Rs.17.37 Cr during the year 201819 as against Rs.24.10 Cr in the previous year.

SACL declared an interim dividend of Rs.0.65 per share (6.5%), on 3,59,25,000 equity shares of Rs.10/- each fully paid up, thereby absorbing a sum of Rs.2.82 Cr including dividend distribution tax, for the year ended 31^st March 2019.

National Company Law Tribunal (NCLT), Chennai approved a Scheme of Arrangement for Demerger of Automobile Trading Division (the Scheme) between SACL and TVS Motor Services Limited (TVS MS). TVS MS acquired the automobile trading division along with its relative assets and liabilities from SACL, as on 1^st April 2018. The Scheme was filed with the Registrar of Companies on 20^th February 2019 and became effective from that date.

As per the Scheme, TVS MS allotted 36,33,814 equity shares of Rs.10/- each to TVS Motor Company Limited (TVSM), as consideration for transfer of automobile trading division by SACL, on 27^th February 2019. Since both TVS MS and SACL are wholly owned subsidiaries of TVSM, further allotment of shares by TVS Ms to TVSM has not affected their status as wholly owned subsidiaries of TVSM.

TVS Housing Limited (TVSH) / Emerald Haven Realty Limited (EHRL)

TVS Housing Limited is a 100% subsidiary of TVS Motor Company Limited.

EHRL has till date completed construction of 1.3 Mn sq ft of residential development and the total area under development as on date is 5.0 Mn sq ft.

During the year, EHRL launched new projects at Salamangalam, Radial Road, Porur, Kolapakkam in Chennai.

During the year, EHRL through its subsidiaries has acquired lands in Radial Road, Karapakkam and Manapakkam and also has been appointed as a manager for residential development at Vengaivasal, Chennai and geographically expanded to Bengaluru through a joint development agreement.

During the year, EHRL earned a Profit Before Tax of Rs. 7.97 Cr as against Rs. 6.56 Cr in the previous year on a consolidated basis.

PT. TVS Motor Company Indonesia (PT TVSM)

The Indonesian two-wheeler Industry grew by 14% over 2017-18. Bebek and Skubek segment grew by 9% and 17% respectively, whereas motorcycle segment suffered negative growth of 12%.

For PT TVSM, the total two wheeler sales increased from 37,096 vehicles in 2017-18 to 40,759 vehicles in 2018-19. Total 3W sales increased from 649 units in 2017-18 to 2,699 units in 2018-19. Export of 3W commenced during Q3 of 2018-19.

EBITDA loss for the year 2018-19 was USD 3 Mn. as against USD 3.72 Mn. in 2017-18.

TVS Motor Company (Europe) B.V & TVS Motor (Singapore) Pte. Ltd

TVSM had earlier incorporated both these entities with a view to serve as special purpose vehicles for making and protecting the investments made in overseas operations of PT TVSM.

TVS Motor Services Limited (TVS MS)

TVS MS is the investment SPV of TVSM, for funding TVS Credit Services Limited (TVS CS).

National Law Company Tribunal, Chennai (NCLT), Chennai has approved a Scheme of Arrangement (Scheme) for redemption of Non-cumulative Redeemable Preference Shares (NCRPS) issued by TVS MS. As per the Scheme, TVS MS will be transferring its investment in the equity shares of TVS CS to the NCRPS holders against cancellation and extinguishment of the NCRPS. After transfer of TVS CS equity shares, TVSM will hold 86% of the total equity share capital in TVS CS.

TVS Credit Services Limited (TVS CS)

TVS CS is the retail finance arm of TVSM for financing of two-wheelers. In line with its long term vision of being preferred financier with diversified and profitable portfolio, TVS CS added MSME finance portfolio during the year 2018-19.

During the year 2018-19, TVS CS’s overall disbursements registered a growth of 44% at Rs. 7,067 Cr as compared to Rs. 4,899 Cr in the previous year. The assets under management stood at Rs. 8,335 Cr as against Rs. 6,152 Cr during the previous year thereby registering a growth of 35%. Total income during the year 2018-19 increased to Rs. 1,635 Cr from Rs. 1,279 Cr during the financial year, an increase of 28% over the previous year.

The Profit Before Tax for the year has also improved and stood at Rs. 216 Cr as against Rs. 206 Cr during the previous year.

The following companies are the subsidiaries of TVS CS.

1. TVS Two-wheeler Mall Private Limited

2. TVS Micro Finance Private Limited

3. Harita ARC Private Limited

4. Harita Collection Services Private Limited

5. TVS Commodity Financial Solutions Private Limited

6. TVS Housing Finance Private Limited

Sundaram-Clayton (USA) Limited

Sundaram-Clayton (USA) Limited, a wholly owned subsidiary of the Company is engaged in the business of providing Professional Employer Organisation (“PEO”) services to the employees of the Company. The Company earned revenue of USD 7574 and net income after adjustment of expenses amounted to USD 409 for the year ended 31^st March 2019.

Sundaram Holding USA Inc. (SHUI) & its subsidiaries

The Company along with Sundaram Auto Components Limited have formed Sundaram Holding USA Inc., a Company established under the applicable provisions of Laws of The United States of America.

SHUI’s wholly owned subsidiaries are:

1. Green Hills Land Holding LLC, South Carolina, USA

2. Component Equipment Leasing LLC, South Carolina, USA

3. Sundaram-Clayton USA LLC, South Carolina, USA

4. Premier Land Holding LLC, South Carolina, USA Commercial production would commence during 2019-20.

TVS Training and Services Limited (TVS TSL)

TVS TSL is engaged in the business of establishing and providing vocational training services to various industries and is participating in the National Skill Development Projects. During the year, the Company earned an income of Rs. 40.04 Cr and profit after tax for the year ended 31^st March 2019 was Rs. 5.81 Cr.

Sundram Non-Conventional Energy Systems Limited (SNCES)

SNCES is engaged in the business of generation of power. During the year, the Company earned a total revenue of Rs. 2.87 Cr and Profit after tax was Rs. 1.63 Cr.

8. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of the Act, 2013 read with the Companies (Accounts) Rules, 2014 and Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) along with a separate statement containing the salient features of the financial performance of subsidiaries / associates, in the prescribed form. The audited consolidated financial statements together with Auditors’ Report forms part of the Annual Report.

The audited financial statements of the subsidiary companies will be made available to the Shareholders, on receipt of a request from any Shareholder and it has also been placed on the website of the Company. This will also be available for inspection by the Shareholders at the Registered Office during the business hours as mentioned in the Notice of AGM.

The consolidated Profit After Tax of the Company and its subsidiaries & associates amounted to Rs. 749.77 Cr for the financial year 2018-19.

9. DIRECTORS & KEY MANAGERIAL PERSONNEL

Directors’ appointment / re-appointment

Based on the recommendation of the Nomination and Remuneration Committee (NRC), the Board at its meeting held on 24^th October 2018 appointed Ms Sasikala Varadachari, as an Additional Director to comply with the requirement of having Independent Woman Director on the Board of the Company, in terms of the Listing Regulations.

The Company is seeking approval of the shareholders for the appointment of Ms Sasikala Varadachari as an Independent Director at the ensuing AGM.

Mr K Mahesh ceased to be a director of the Company w.e.f. 2^nd February, 2019 due to his sad demise. The Board placed on record its appreciation for the valuable guidance and support provided by him during his tenure as Director of the Company.

Mr Sudarshan Venu relinquished his position as Joint Managing Director of the Company effective 11^th March 2019 as he will not be able to give sufficient time to manage day-to-day affairs of the Company. He would however continue to serve as Non-Executive and Non Independent Director of the Company, which would be valuable and supportive to the Company considering his experience in automotive industry.

In terms of the provisions of sub-Section (6) read with explanation to Section 152 of the Act, 2013 two-thirds of the total number of Directors i.e., excluding IDs, are liable to retire by rotation and out of which, one-third is liable to retire by rotation at every AGM. Mr Sudarshan Venu and Mr T K Balaji, Directors, who have been the longest in office, are liable to retire by rotation at the ensuing AGM, and being eligible, offer themselves for re-appointment.

The Directors have recommended their appointment / re-appointment for the approval of Shareholders. The brief profile of the Directors are furnished in the Notice convening the AGM of the Company.

Independent Directors (IDs)

All IDs hold office for a fixed term and are not liable to retire by rotation.

At the AGM held on 21^st August 2014, M/s Vice Admiral P J Jacob (Retd.), V Subramanian, S Santhanakrishnan, R Vijayaraghavan and Kamlesh Gandhi, were appointed as IDs for the first term of five consecutive years from the conclusion of the fifty-second AGM, not liable to retire by rotation and to receive remuneration by way of fees, reimbursement of expenses for participation in the meetings of the Board and / or Committees and profit related commission in terms of applicable provisions of the Act, 2013, within the overall limit, as determined by the Board from time to time.

Mr R Gopalan, was appointed as Non-Executive Independent Director effective 21^st June 2016 through Postal Ballot and he shall hold the office till the conclusion of the ensuing AGM.

Based on the performance evaluation by both the NRC and the Board, M/s Vice Admiral P J Jacob, would hold office as Independent Director for a second term of 5 (five) consecutive years from 21^st August 2019 and M/s V Subramanian, S Santhanakrishnan, R Vijayaraghavan and Kamlesh Gandhi would hold office as Independent Directors for a second term of 3 (three) consecutive years from 21^st August 2019 and R Gopalan would hold office as Independent Director for a second term of 3 (three) consecutive years from 24^th July 2019, subject to the approval of the shareholders at the ensuing AGM, in terms of Section 149 of the Act, 2013 on the same terms of appointment and remuneration by way of fees and profit related commission, if any.

The terms cover, inter-alia, duties, rights of access to information, disclosure of their interest / concern, dealing in Company’s shares, remuneration and expenses, insurance and indemnity. The IDs are provided with copies of the Company’s policies and charters of various Committees of the Board.

In accordance with Section 149(7) of the Act, 2013, all IDs have declared that they meet the criteria of independence as provided under Section 149(6) of the Act, 2013 and Regulation 25 of the Listing Regulations.

The detailed terms of appointment of IDs is disclosed on the Company’s website in the following link:

http://www.sundaram-clayton.com/Investor/Terms-of-Appointment-IDs.pdf

Separate meeting of Independent Directors

During the year under review, a separate meeting of IDs was held on 11^th March 2019 and all the IDs were present at the Meeting.

Based on the set of questionnaires, complete feedback on NonIndependent Directors and details of various activities undertaken by the Company were provided to IDs to facilitate their review / evaluation.

(a) Non-Independent Directors (Non-IDs)

IDs used various criteria and methodology practiced in Industry, prescribed by NRC for evaluation of Non-IDs M/s. Venu Srinivasan, Chairman and Managing Director, Dr. Lakshmi Venu, Joint Managing Director and Sudarshan Venu, T K Balaji and Gopal Srinivasan, Directors, Chairman of the Board and Board as a whole.

IDs evaluated the performance of all Non-IDs individually, through a set of questionnaires. They reviewed their interaction during the Board/ Committee meetings and strategic inputs given by them to improve the risk management, internal controls and contribution to the Company’s growth.

IDs were satisfied fully with the performance of all Non-IDs.

(b) Chairman

IDs reviewed the performance of Chairman of the Board after taking into account his performance and benchmarked the achievement of the Company with industry under the stewardship of Chairman.

IDs also placed on record, their appreciation of Chairman’s visionary leadership and appreciated him as a driving force for sustaining high ethical standard and transparency in boardroom discussions and actions, and has a great ability to listen to all members and stimulate discussions to benefit the businesses and to remain contemporary and futuristic both in the Company’s operations and its processes.

They also recorded the growth story of the Company under the leadership of Chairman and significant increase in turnover & Profit.

(c) Board

IDs also evaluated Board’s composition, size, mix of skills and experience, its meeting sequence, effectiveness of discussion, decision making, follow up action, so as to improve governance and enhance personal effectiveness of Directors.

The evaluation process focused on Board Dynamics and the Board upon evaluation concluded that it is well balanced in terms of diversity of experience with expert in each domain viz., Engineering, Leadership/ Strategy, Finance, Legal and Regulatory and Governance. The Company has a Board with wide range of expertise in all aspects of business.

IDs unanimously evaluated the pre-requisites of the Board viz., formulation of strategy, acquisition & allocation of overall resources, setting up policies, directors’ selection processes and cohesiveness on key issues and satisfied themselves that they were adequate.

They were satisfied with the Company’s performance in all fronts and finally concluded that the Board operates with best practices.

IDs have also ensured that the skills / expertise / competence of the Board of Directors are in line with the Company’s business requirement to enable it function effectively.

(d) Quality, Quantity and Timeliness of flow of Information between the Company, Management and the Board

All IDs have expressed their overall satisfaction with the support received from the management and the excellent work done by the management during the year under review and also the relationship between the top management and Board is smooth and seamless.

KEY MANAGERIAL PERSONNEL (KMP)

Chairman and Managing Director

During the year under review, Mr Venu Srinivasan was re-appointed as Chairman and Managing Director of the Company for a further period of five years commencing from 23^rd May 2019 and the Shareholders have approved the same through Postal Ballot on 23^rd April 2019.

In terms of Section 196 read with Schedule V to the Act, 2013, for continuation of appointment as Managing Director after attaining the age of 70 years requires approval of the shareholders by way of special resolution. Since, the age of CMD will cross 70 years during his tenure, the approval of the shareholders for the re-appointment was obtained by way of a Special Resolution.

Change in Chief Executive Officer

During the year under review, Mr M Muthuraj retired as the Chief Executive Officer of the Company effective 30^th April 2018 and Mr Vivek S Joshi was appointed as the Chief Executive Officer of the Company, effective 25^th January 2019, based on the recommendation of the NRC.

Change in Chief Financial Officer

During the year under review, Mr V N Venkatanathan resigned as the Chief Financial Officer of the Company and Mr K Gopala Desikan was appointed as the Chief Financial Officer effective 8^th August 2018, based on the recommendation of the NRC and Audit Committee.

In terms of the Act, 2013, Mr Venu Srinivasan, Chairman and Managing Director, Dr. Lakshmi Venu, Joint Managing Director, Mr Vivek S Joshi, Chief Executive Officer, Mr K Gopala Desikan, Chief Financial Officer and Mr R Raja Prakash, Company Secretary are the ‘Key Managerial Personnel’ of the Company as on date of this Report.

Nomination and Remuneration Policy

NRC reviews the composition of the Board to ensure that there is an appropriate mix of abilities, experience and diversity to serve the interests of all Shareholders of the Company.

Nomination and Remuneration Policy was approved by the Board at its meeting held on 24^th September 2014 and amended from time-to-time in terms of Section 178 of the Act, 2013. The objective of such policy shall be to attract, retain and motivate executive management and devise remuneration structure to link to Company’s strategic long term goals, appropriateness, relevance and risk appetite.

NRC will identify, ascertain the integrity, qualification, appropriate expertise and experience, having regard to the skills that the candidate will bring to the Board / Company, whenever the need arises for appointment of Directors / KMP.

Criteria for performance evaluation, disclosures on the remuneration of Directors, criteria of making payments to Non-Executive Directors have been disclosed as part of Corporate Governance Report attached herewith.

Remuneration payable to Non-executive Independent Directors

The shareholders through Postal Ballot on 22^nd June 2016 approved the remuneration by way of commission not exceeding 1% of the net profits, in aggregate, payable to Non-Executive and Independent Directors of the Company (NE-IDs) for every year, for a period of 5 years commencing from 1^st April 2016.

NE-IDs devote considerable time in deliberating the operational and other issues of the Company and provide valuable advice in regard to the management of the Company from time to time, and the Company also derives substantial benefit through their expertise and advice.

Evaluation of Directors and Committees

In terms of Section 134 of the Act, 2013 and the Corporate Governance requirements as prescribed under the Listing Regulations, the Board reviewed and evaluated all Directors (excluding the Director being evaluated) and its Committees viz., Audit Committee, Risk Management Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders’ Relationship Committee, based on the evaluation criteria laid down by the NRC through a set of questionnaires.

Directors

The performance of all Directors were assessed against a range of criteria such as contribution to the development of business strategy and performance of the Company, understanding the major risks affecting the Company, clear direction to the management and contribution to the Board cohesion. The performance evaluation has been done by the entire Board of Directors, except the Director concerned being evaluated.

The Board noted that all IDs have understood the opportunities and risks to the Company’s strategy and are supportive of the direction articulated by the management team towards consistent improvement.

On the basis of the report of performance evaluation of directors, the Board noted and recorded that all the directors should extend and continue their term of appointment as Directors / Independent Director, as the case may be.

Committees

Board delegates specific mandates to its Committees, to optimize Directors’ skills and talents besides complying with key regulatory aspects.

- Audit Committee for overseeing financial Reporting;

- Risk Management Committee for overseeing the risk management framework;

- Nomination and Remuneration Committee for selecting and compensating Directors / KMPs / SMPs;

- Stakeholders’ Relationship Committee for redressing investors grievances; and

- Corporate Social Responsibility Committee for overseeing CSR initiatives and inclusive growth.

The performance of each Committee was evaluated by the Board after seeking inputs from its Members on the basis of specific terms of reference, its charter, time spent by the Committees in considering key issues, quality of information received, major recommendations / action plans and work of each Committee.

The Board is satisfied with the overall effectiveness and decision making of all Committees. The Board reviewed each Committee’s terms of reference to ensure that the Company’s existing practices remain appropriate.

Recommendations from each Committee were considered and approved by the Board prior to its implementation, wherever necessary and there were no items where the Board had not accepted any recommendation of any Committee of the Board in the relevant financial year.

Details of Committees, its charter, functions are provided in the Corporate Governance Report attached to this Report.

Number of board meetings held:

The number of board meetings held during the financial year 2018-19 is provided as part of Corporate Governance Report prepared in terms of the Listing Regulations.

10. AUDITORS

Statutory Auditors

The Company at its fifty fifth AGM held on 19^th July 2017 appointed M/s Raghavan, Chaudhuri & Narayanan, Chartered Accountants, Bengaluru, having Firm Registration No. 007761S allotted by The Institute of Chartered Accountants of India, as Statutory Auditors of the Company to hold office, for the first term of five consecutive years, from the conclusion of the said AGM, at such remuneration in addition to applicable taxes, out of pocket expenses, travelling and other expenses as may be mutually agreed between the Board of Directors of the Company and the Auditors.

The statutory auditors will continue to hold office for the third year in the first term of five consecutive years, from the conclusion of this AGM.

The Company has obtained necessary certificate under Section 141 of the Act, 2013 conveying their eligibility for being statutory auditors of the Company for the year 2019-20.

The Auditors’ Report for the financial year 2018-19 does not contain any qualification, reservation or adverse remark and the same is attached with the annual financial statements.

Secretarial Auditor

As required under Section 204 of the Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company is required to appoint a Secretarial Auditor for auditing secretarial and related records of the Company.

The Secretarial Audit Report for the financial year 2018-19, given by Ms B Chandra, Practising Company Secretary, Chennai for auditing the secretarial and related records is attached to this report. The Secretarial Audit Report does not contain any qualification, reservation or other remarks.

The board at its meeting held on 2^nd May 2019 has appointed B Chandra, Practising Company Secretary, Chennai, (CP No. 7859) as Secretarial Auditor for the financial year 2019-20.

Cost Auditor

As per Section 148 of the Act, 2013 read with the Companies (Cost Records and Audit) Rules 2014, as amended, the cost audit records maintained by the Company in respect of parts manufactured by the Company covered under other machinery specified under Customs Tariff Act heading in Table B to Rule 3 of the above rules, are required to be audited by a Cost Auditor.

In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the board, re-appointed Mr A N Raman, Cost Accountant, Chennai holding Certificate of practice No. 5359 allotted by The Institute of Cost Accountants of India, as a Cost Auditor for conducting cost audit for the financial year 2019-20.

The Company has also received necessary certificate under Section 141 of the Act, 2013 from him conveying his eligibility to act as a cost auditor. A sum of Rs. 3.50 lakhs has been fixed by the board as remuneration in addition to reimbursement of all applicable taxes, travelling and out-of-pocket expenses payable to him, which is required to be approved and ratified by the members, at the ensuing AGM as per Section 148(3) of the Act, 2013.

The Company has filed the Cost Audit Report of 2017-18 on 6^th September 2018 in XBRL format.

11. CORPORATE GOVERNANCE

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

A separate section on Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under the Listing Regulations form part of this Annual Report.

The Chairman and Managing Director and the Chief Financial Officer of the Company have certified to the Board on financial statements and other matters in accordance with Regulation 17(8) of the Listing Regulations, 2015 pertaining to CEO / CFO certification for the financial year ended 31^st March 2019.

12. BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34 of the Listing Regulations, the Business Responsibility Report for the year 2018-19 describing the initiatives taken from an environment, social and governance perspectives, in the prescribed format is given as Annexure-VI to this Report and is also available on the Company’s website viz., www.sundaram-clayton.com.

13. POLICY ON VIGIL MECHANISM

The Company has adopted a Policy on Vigil Mechanism in accordance with the provisions of the Act, 2013 and Regulation 22 of the Listing Regulations, which provides a formal mechanism for all Directors, Employees and other Stakeholders of the Company to report to the management, their genuine concerns or grievances about unethical behaviour, actual or suspected fraud and any violation of the Company’s Code of Business Conduct and Ethics.

The Code also provides a direct access to the Chairman of the Audit Committee to make protective disclosures to the management about grievances or violation of the Company’s Code.

The Board at its meeting held on 2^nd May 2019 made certain amendments to the Whistle Blower Policy for reporting any allegations of material nature on any leakage of unpublished price sensitive information.

The policy is disclosed on the Company’s website in the following link http://www.sundaram-clayton.com/Investor/Whistle-Blower-Policy.pdf

14. PUBLIC DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Section 76 of the Act, 2013, for the year ended 31^st March 2019.

15. STATUTORY STATEMENTS

Information on conservation of energy, technology absorption, foreign exchange, etc.,

Relevant information is given in Annexure-I to this Report, in terms of the requirements of Section 134(3)(m) of the Act, 2013 read with the Companies (Accounts) Rules, 2014.

Material changes and commitments

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

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

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

Annual Return

Extract of Annual Return in the prescribed form is given as Annexure-II to this Report, in terms of the requirement of Section 134(3)(a) of Act, 2013 read with the Companies (Accounts) Rules, 2014.

The same is available on the Companies website in the following link: http://www.sundaram-clayton.com/Investor/AnnualReturn.pdf

Employee’s remuneration

Details of employees receiving the remuneration in excess of the limits prescribed under Section 197 of the Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as a statement and given in Annexure-III. In terms of first proviso to Section 136(1) of the Act, 2013 the Annual Report, excluding the aforesaid annexure is being sent to the Shareholders of the Company. The annexure is available for inspection at the Registered Office of the Company during business hours as mentioned in the Notice of AGM and any Shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

Comparative analysis of remuneration paid

A comparative analysis of remuneration paid to Directors and employees with the Company’s performance is given as Annexure-V to this Report.

Details of material related party transactions

There are no material related party transactions under Section 188 of the Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

Details of loans / guarantees / investments made

During the year under review, the Company had not granted any loans or guarantees covered under Section 186 of the Act, 2013.

Please refer note no. 4 to Notes on accounts for the financial year 2018-19, for details of investments made by the Company.

Reporting of fraud

The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act, 2013.

Disclosure in terms of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has Internal Complaints Committees as required under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, there were no cases filed pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

16. ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co-operation received from the promoters of the Company, viz., T V Sundram Iyengar & Sons Private Limited, Southern Roadways Limited, Sundaram Industries Private Limited and Sundaram Finance Holdings Limited.

The Directors thank the vehicle manufacturers, vendors and bankers for their continued support and assistance.

The Directors wish to place on record their appreciation of the continued excellent work done by all the employees of the Company during the year.

The Directors specially thank the shareholders for their continued faith in the Company.

For and on behalf of the Board of Directors

Chennai VENU SRINIVASAN

2^nd May 2019 Chairman

---

Mar 31, 2018

Directors’ report to the shareholders

The Directors have pleasure in presenting the 56^th Annual Report and the audited financial statements for the year ended 31^st March 2018.

1. FINANCIAL HIGHLIGHTS

(Rs. in Cr)

Particulars	Year ended	Year ended
	31.03.2018	31.03.2017
Sales (including Excise duty) and other income	1,766.74	1,589.67
EBITDA	107.62	206.57
Less: Finance Cost	33.70	28.54
Depreciation	73.08	60.64
Profit before tax before exceptional items	0.84	117.39
Add : Exceptional Item (Income)	-	2.28
Profit before tax	0.84	119.67
Provision for tax	(54.08)*	14.08
Profit for the year after tax	54.92	105.59
Add: Balance in Statement of Profit &	426.15	381.03
Loss including General Reserve
: Transfer from Other	0.21	3.66
Comprehensive Income
Total Comprehensive Income available	481.28	490.28
Appropriations:
Dividend and Dividend Distribution tax	30.35	64.13
Surplus carried forward	450.93	426.15
Total	481.28	490.28

* After considering MAT credit and deferred tax asset

2. DIVIDEND

The Board of Directors of the Company (the Board) at their meeting held on 15^th March 2018, declared an interim dividend of Rs.15 per share (300%) for the year 2017-18, absorbing a sum of Rs.30.35 Cr. The same was paid to the shareholders on 26^th March 2018.

The Company has set-off its dividend distribution tax payable under Section 115-O(1A) of the Income Tax Act, 1961 against the dividend distribution tax paid by one of its Subsidiary Company on its dividend declared.

The Board does not recommend any further dividend for the year under consideration.

3. PERFORMANCE

The past year 2017-18 started with the introduction of BS IV emission norms and the landmark GST reform. GDP growth increased and India ended the year as one of the fastest growing large economies in the world.

The Gross domestic Product (GDP) estimates were improved but India registered a lower growth of 6.8% (7.1% in 2016-17) owing to its subdued performance in the first half of the year clearly outweighing the efforts in the second half of the year.

Global economic and geo political environment continued to be volatile during 2016.The GDP in the U.S. and EU markets registered a growth of 2.3% (1.6% in 2016) and 2.4% (1.7% in 2016).

During the year, there has been an unexpected increase in demand from the customers. Considering the challenges in enhancing operational capacity and efficiency, in the short term the Company was compelled to resort to:

(a) outsourcing some incremental volumes; and

(b) air-freighting the components to overseas customers.

This arrangement ensures that the customers’ production lines are not affected. However, these steps have resulted in an increase in cost on account of premium airfreight and outsourcing cost by Rs.157.90 Cr. for the year 2017-18.

The following table highlights the performance of the Company during 2017-18:

Particulars	FY 2017-18	FY 2016-17	Variance (in %)
Sales (Tonnage)	50,592	45,676	11
Sale of goods (Rs. in Cr)	1543.8	1,295.3	19
Domestic sales (Rs. in Cr)	903.6	793.1	14
Export sales (Rs. in Cr)	640.2	502.2	27
Profit after tax (Rs. in Cr)	54.9	105.6	(52)

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT INDUSTRY STRUCTURE AND DEVELOPMENT Domestic

The segment wise performance in the Indian automotive industry is given in the following table.

Category	FY 2017-18	FY 2016-17	Variance (in %)
Two Wheelers	2,30,07,690	1,99,30,489	15
Passenger Vehicles	40,33,667	38,05,557	6
Commercial Vehicles (M&HCV)	4,13,927	3,64,458	14

The Indian auto industry (domestic sales and exports) posted an overall growth of 14% (Source: SIAM). The Automotive and related industries witnessed several headwinds in FY 2017-18 spaced throughout the year such as introduction of BSIV emission norms, implementation of the Goods and Services Tax system, regulatory changes such as overloading restrictions and compulsory air-conditioned cabins for trucks, introduction of the e-way bill, rising prices of aluminum and oil, all of which hindered the industry’s performance.

Exports

The following table highlights the North American and European truck registration figures in vehicle units:

(in Nos)

Market	Category	FY 2017-18	FY 2016-17	Growth (in %)
North America	Class 8 Trucks	2,62,398	2,30,789	13.7
North America	Class 4-7 Trucks	2,56,247	2,33,880	9.6
Europe	Medium & Heavy trucks	2,99,894	2,99,008	0.3

(Source: FTR & ACEA)

The Class 8 truck market in North America has outperformed the forecasted sales figures for the year. The market scenario has now shifted from ‘demand constrained market’ to a ‘Supply constrained market’.

The third quarter sales in the financial year 2017-18 boosted the performance of the European market.

BUSINESS OUTLOOK AND OVERVIEW

With most of the rates rationalized and compliance system simplified, the Goods and Services Tax (GST) system is expected to stabilize and the various grievances to be addressed more efficiently. Thus, it will be a conducive ecosystem for business growth with many things being streamlined.

Higher focus on rural segment and infrastructure development as rolled out in the central budget 2018-19 is likely to improve demand in markets. The monsoon forecast also being set favorably at normal or above normal is an enabler for growth in the agricultural sector.

The implementation of the 7^th Pay commission and Bank recapitalization is expected to spur consumption and increase credit availability in the economy. Hence, the GDP growth rate in India for FY

2018-19 is likely to hover around 7.4%.Given the economic outlook, the automobiles and auto-component sectors are expected to see a growth year in FY 2018-19.

Over the medium to long term, growth in the auto component industry is likely to be higher than the underlying automotive industry growth given the increasing localization by OEMs, higher component content per vehicle. Auto component export is another key growth driver. The “Make in India” pitch may further boost the growth of the component industry.

Globally, IMF expects global growth to be at 3.9% in 2018 (3.7% in 2017).Global revival indicates better performance in the export markets.

In the U.S., macroeconomic factors indicate an upswing in the year ahead. The U.S. Federal Reserve is likely to make measured progress in hiking its benchmark interest rates on the back of strong fundamentals and in order to control inflation risks. The recent cut in the U.S corporate tax rate from 35% to 21% is expected to lead to increased investment and stimulate economic activity. Hence, the U.S GDP is likely to expand between 2.8-3% in 2018. The U.S. truck market (Class 8) volumes are expected to grow at 26% in 2018.

The EU GDP is expected to grow at 2.3%. With inflation under control at 1.5%, the economy is expected to be stable with marginal growth.

The truck market is expected to grow along the lines of the economy like last year. With several markets expected to experience cyclical or all-time peaks, the EU commercial vehicles demand (M&HCV segment) in 2018 is expected to pause and grow by less than 3% (2% in 2017).

Implementation of Goods and Services Tax Act (GST)

Effective 1^st July 2017, the Company has successfully & seamlessly transitioned to new GST regime and has passed on the benefits arising out of GST changeover to its customers.

Opportunities & Threats

The Company supplies aluminum castings for commercial vehicles, passenger cars and two wheeler segments of the automotive industry.

The revenue of the Company is derived from Medium & Heavy Commercial Vehicles (M&HCV) (50%), followed by car industry (26%) and two wheeler industry (24%).

In the medium to long term, the projected growth of domestic auto industry, and ambitious export plans of the Indian OEMs are likely to benefit the Company.

In view of stringent emission norms and fuel economy regulations, the thrust towards light-weighting is bound to increase leading to higher content of aluminum in all vehicle types. The Company is well placed to leverage these emerging opportunities. This will provide for increased growth opportunities, since the Company is already a preferred source for aluminum castings to major OEM’s in India and abroad.

India is emerging as one of the major manufacturing hubs, thanks to availability of well-educated engineers, skilled workforce, good supply base and initiatives by the government.

Several Indian die casting companies and OEMs are either setting up new capacities or expanding existing capacities resulting in increased competition.

Intense competition makes it extremely difficult to seek price increases to compensate the effects of inflation bringing the margins under severe pressure. However, the Company''s supply contracts provide for periodic price adjustments indexed to the international prices of aluminum and this should offer some protection against volatility of commodity prices.

Risks and concerns Economy

There are possible risks on the horizon, both external and domestic. Spill-overs from tense geo-political developments, corrections in global asset prices, rising oil prices, tighter monetary and protectionist trade policies by developed countries could be disruptive.

In India, reform implementation risks, inflationary concerns, policy uncertainty, budgetary adjustments and pre-election year could pose as challenges for growth.

Industry specific

The Indian commercial vehicle industry is a strong indicator of the economic activity in a country and has a strong correlation with the agricultural growth, infrastructure development, the mining industry and is also cyclical.

The global automotive industry is experiencing the situation of a cyclical demand peak. Competition has increased in the Indian market due to entry of new players and expansion plans of existing ones. The Company is aware of the increasing competition and is taking customer focused measures to remain competitive in the market place.

Primary aluminum experienced price inflation in 2017-18. Benchmark LME aluminum prices gained 23% in 2017, reaching a peak of $2,215 in October. That was the highest level seen in over five years. Given the developments in China and its trade war with the U.S, the prices are expected to experience a correction in 2018-19.

Forex

With significant exports, import of raw materials and capital goods and foreign currency liabilities, the Company is always exposed to currency fluctuations. The Company has a well-defined forex hedging policy to mitigate the risks.

Contractual

The stipulation and requirements of the automobile industry demands high quality products. Robust quality management systems meeting international standards like IATF 16949 are in place to ensure excellent product quality. However, appropriate recall and product liability insurance in line with standard industry practice have been taken.

Just-in-time delivery is another important contractual obligation. Robust quality and project management systems are in place to avoid delay in deliveries due to quality issues or project implementation.

Capacity utilization

The Company adds capacity, in existing and new locations, to meet the projected demand of customers. The Company closely monitors the progress of customer projects/volumes and appropriately deploys the assets to protect from both underutilization and capacity shortages to meet the demand.

Risk Management

The Board has established a robust Risk Management framework to identify, monitor and minimize risks as well as to identify business opportunities.

Risk evaluation and management is an ongoing process. As a process, risks associated with the business are identified and prioritized based on the Company’s overall risk appetite, strategy, severity and probability of occurrence. Process owners are identified for each risk and metrics are developed for continuous monitoring and minimization of risk.

The Board is satisfied that there are adequate systems and procedures in place to identify, assess, monitor and manage risks. The Company has constituted a separate Risk Management Committee on 22^nd May 2018 for overseeing all the risks that the Organization faces such as strategic, financial, market, IT, legal, regulatory, reputational and other risks and recommends suitable action. Risk mitigation policy has already been approved by the Board.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded. Information provided to management is reliable and timely. The Company ensures adherence to all statutes.

Internal Financial Control

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

OPERATIONS REVIEW Manufacturing

The Company has been using Total Quality Management (TQM) as the foundation of its management. The Company implemented the best practices like Total Productivity Management (TPM) and Lean Manufacturing (TPS) in its manufacturing facilities. It also has in place best-in-class practices for safety, pollution control, work environment, water and energy conservation.

Continuous improvement projects are implemented to improve the product quality and productivity in all the manufacturing locations. The Company’s journey of achieving manufacturing excellence was recognized and rewarded by the following customers during FY 2017-18.

- Cummins - Category partner - Aluminum casting

- PACCAR / DAF - Supplier of the year - Cost management

- Rotex - Best Green channel supplier

Quality

Achieving customer delight by consistently providing products of excellent quality is the prime motto of the Company. This is achieved through state-of-art technology, training, effective quality system, continuous improvement and total employee involvement.

Poka-yokes, process audits, use of statistical tools for process optimization and online process controls also contribute towards improving and achieving consistency in product quality. The quality system is certified for IATF 16949 requirements.

TQM is a way of life in the Company. 100% employee involvement has been successfully achieved for many years.

Employees have completed 920 projects by applying statistical tools through Quality Control Circles (QCC) in 2017-18. The average number of suggestions implemented per employee was 60.

Cost Management

Cost Management is a continuous journey and the Company manages the same through deployment of costs across all departments. A cross functional team is working on projects focused on Value Added/Value Engineering (VA/VE) and operational efficiency. TPM and lean initiatives are deployed Company-wide to achieve reduction in manufacturing cost.

Information Technology

The Company uses ERP system that integrates all business processes across the Company. Suppliers and customers are also integrated into the system for better planning and execution. During the year, several dashboards were added to improve the productivity, quality and reduce the cost of operations. Projects were also implemented to further enhance the Information Security.

HUMAN RESOURCE DEVELOPMENT (HRD)

The Company considers employees as vital and most valuable assets. HRD is aligned to business needs to enhance business performance and results. HRD is practiced through an overall HRD framework with its constituents as resourcing, employee engagement, performance & compensation management, competency based development, career & succession planning and organization development. Each of these constituent has a structured approach and process to deliver.

As a part of the long term strategies of the Company, collaborative education program has been initiated with three reputed institutes to develop role-ready engineers with Company-specific knowledge at the entry level.

Career development workshop is conducted to identify high potential employees. Such employees are groomed for taking up higher responsibilities. A reward and recognition system is in place to motivate and also provide fast track growth for the high potential employees.

Our engineers and executives are sponsored for advanced study offered by both Indian and foreign institutions. Customized technical and leadership competency improvement programs are developed and delivered through reputed institutions.

The Company continuously measures and reports employee engagement every year and identifies improvement areas to work on.

An excellent industrial relations environment continues to prevail at all the manufacturing units of the Company.

As on 31^st March 2018, the Company had 2,354 employees on its rolls.

ENVIRONMENT, HEALTH & SAFETY (EHS)

The Company is fully committed to the ultimate goal of employee safety. Safety management is integrated with the overall EHS.

The Company has been certified under Integrated Management System combining ISO 14001 and OHSAS 18001 systems and procedures.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Company’s objectives, projections, estimates and expectations may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include, amongst others, economic conditions affecting demand/ supply and price conditions in the domestic and overseas market in which the Company operates, changes in the Government Regulations, Tax Laws and Other Statutes and Incidental Factors.

5. DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, (the Act 2013) with respect to Directors’ Responsibility Statement, it is hereby stated that -

i. in the preparation of annual accounts for the financial year ended 31^st March 2018, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;

ii. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

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

iv. the Directors had prepared the accounts for the financial year ended 31^st March 2018 on a “going concern basis”;

v. 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

vi. 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.

6. CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR activities have already been textured into the Company''s value system through Srinivasan Services Trust (SST), established in 1996 with the vision of building self-reliant rural community.

Over 22 years of service, SST has played a pivotal role in changing lives of people in rural India by creating self-reliant communities that are models of sustainable development.

The Company is eligible to spend on their ongoing projects / programmes, falling within the CSR activities specified under the Act, 2013, as mandated by the Ministry of Corporate Affairs for carrying out the CSR activities.

The Committee formulated and recommended a Corporate Social Responsibility policy in terms of Section 135 of the Act, 2013, along with a list of projects / programmes to be undertaken for CSR spending in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

As per CSR provisions of the Act, 2013, the Company is required to spend Rs. 97 lakhs for the financial year 2017-18 towards CSR initiatives. Considering the performance of the Company, the Company could not allocate sufficient resources for undertaking CSR activities as per the limits prescribed under the Act, 2013 and the Company spent Rs. 25.00 Lakhs through Srinivasan Services Trust (SST) for the year 2017-18. The Company will continue the CSR spending for the year 2018-19 as per requirements of the Act, 2013.

Presently, SST is working in 5,000 villages spread across Tamil Nadu, Karnataka, Maharashtra, Himachal Pradesh and Andhra Pradesh covering about 30,92,281 population and 7,19,890 families. Its major focus areas are economic development, health care, quality education, environment and infrastructure.

Achievements in the above villages are:

Economic development:

- 3,81,801 families living in these villages have a monthly income of Rs.15,000/- and above. They have financial security.

- 3,846 Farmer groups have been formed with 53,323 members.

- Improved agriculture practices enabled 2,31,059 Farmers owning 2,51,393 hectares have increased the yields higher than the state average by 15%.

- 2,24,805 families earn more than Rs 3,500/- per month through livestock.

Women empowerment:

- Formed 9,692 Self Help Groups. These groups have 1,43,821 women as Members.

- Of the 1,43,821 Members, 1,40,480 Members are in income generation activities. They earn a minimum income of Rs. 3,000/per month.

Health care:

- 76,945 children in the age group below 5 are not malnourished.

- 4,52,930 women are freed from anaemia.

- 4,04,589 households made access to toilet facilities.

- The morbidity percentage reduced from 9% to 5%.

- Enrolment in anganwadis increased from 86% to 100% and attendance is 99%.

- 1,688 anganwadis have met all the Integrated Child Development Services Scheme (ICDS) standards.

- 88% involvement of mother volunteers in the functioning of anganwadis. They volunteer their time to ensure proper functioning.

Quality education:

- 100% enrolment of children in schools. There are no drop outs in the schools.

- Number of percentage of slow learners reduced in schools from 29% to 11%.

- Out of 1,764 schools, 1,299 schools are now model schools.

- 1,14,273 illiterate women out of 1,53,493 have been made literates.

Environment and Infrastructure:

- 3,45,140 households dispose solid waste through individual and common compost pits. 91 tons of vermi compost generated per month from wastes.

- Sewage water from 3,48,604 households disposed through soak pits, kitchen gardens and drain.

- Safe drinking water is available to 3,343 villages.

Community takes care of their development needs. 11,639 social leaders are active in this effort.

As required under Section 135 of the Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR, containing the particulars of the projects / programmes approved and recommended by CSR Committee and approved by the Board for the financial year 2017-18 are given by way of Annexure-IV attached to this Report.

7. PERFORMANCE OF SUBSIDIARIES & ASSOCIATES

The following companies and bodies corporate are the subsidiaries / associates of the Company:

Subsidiaries

1. TVS Motor Company Limited;

2. Sundaram Auto Components Limited;

3. TVS Housing Limited;

4. TVS Motor Services Limited;

5. TVS Credit Services Limited;

6. TVS Two Wheeler Mall Private Limited;

7. TVS Micro Finance Private Limited;

8. Harita ARC Private Limited;

9. Harita Collection Services Private Limited;

10. TVS Commodity Financial Solutions Private Limited;

11. TVS Housing Finance Private Limited;

12. Sundaram-Clayton (USA) Limited, USA;

13. TVS Motor Company (Europe) B.V., Amsterdam, Netherlands;

14. TVS Motor (Singapore) Pte. Limited, Singapore;

15. PT TVS Motor Company Indonesia, Jakarta;

16. Sundaram Holding USA Inc, Delaware, USA;

17. Green hills Land Holding LLC, South Carolina, USA;

18. Components Equipment Leasing LLC, South Carolina, USA;

19. Sundaram-Clayton (USA) LLC (formerly Workspace Project LLC), South Carolina, USA; and

20. Premier Land Holding LLC, South Carolina, USA.

Associates

1. Emerald Haven Realty Limited;

2. TVS Training and Services Limited; and

3. Sundram Non-Conventional Energy Systems Limited

SUBSIDIARIES

TVS Motor Company Limited (TVSM)

TVSM is engaged in the business of manufacture of two and three wheelers. During the year 2017-18, TVSM achieved a turnover of Rs.15,618 Cr and earned a profit after tax of Rs. 663 Cr.

TVSM for the year 2017-18, declared first interim dividend of Rs.2.00 per share (200%) absorbing a sum of Rs.114.36 Cr including dividend distribution tax and a second interim dividend of Rs.1.30 per share (130%) absorbing a sum of Rs.73.27 Cr including dividend distribution tax.

Hence, the total amount of dividend for the year ended 31^st March 2018 aggregated to Rs.3.30 per share (330%) on 47,50,87,114 equity shares of Re.1 each.

Sundaram Auto Components Limited (SACL)

Sales of SACL grew 20% from Rs.480.9 Cr in the previous year to Rs.575.7 Cr in the year 2017-18. Increase in business from the Company, Autoliv and Daimler were the key growth drivers.

SACL also entered into the area of component manufacturing of two-wheeler electric vehicle through orders obtained from Ather Energy and also cleared major customer audits for Ather energy, MACE (for supplies to Maruti Suzuki), Grupo Antolin, Rane TRW and PSA Citroen.

SACL earned a Profit Before Tax of Rs.24.52 Cr during the year 2017-18 as against Rs. 34.94 Cr including exceptional items of Rs. 9.84 Cr in the previous year.

SACL at its meeting held on 2^nd March 2018, declared an interim dividend of Rs.1.45 per share (14.5%), on 3,59,25,000 equity shares of Rs.10/- each fully paid up, absorbing a sum of Rs. 6.27 Cr including dividend distribution tax, for the year ended 31^st March 2018.

Equity Share Capital of SACL as on 31^st March 2018 increased to Rs.35.92 Cr from Rs.14.55 Cr in the previous year.

During the year, SACL allotted 2,13,70,000 equity shares of Rs.10 each at a premium of Rs.70 per share to TVS Motor Company Limited (TVSM), on rights basis, in multiple tranches.

SACL proposes to demerge its automobile trading division along with its relevant assets and liabilities to TVS Motor Services Limited (TVS MS).

Accordingly, the Board of SACL at its meeting held on 26^th April 2018 approved a Scheme of Demerger. Since both SACL and TVS MS are wholly owned subsidiaries of TVSM, shares issued by TVS MS, based on the valuation of the demerging division, to TVSM towards the transfer of the automobile trading division from SACL to TVS MS in accordance with the Scheme of Demerger, will not change the status of both subsidiaries.

TVS Housing Limited (TVSH) / Emerald Haven Realty Limited (EHRL)

During the year, TVS Housing Limited has earned a profit of Rs. 0.05 Cr on disposal of existing land bank.

EHRL through one of its subsidiary is developing 18 acres of land in Kolapakkam, Chennai. The 1^st phase consists of 352 apartments and

34 villas and the construction of the same has been completed. 72% of the apartments and 65% of the villas have been sold. Constructions of the other phases have commenced.

EHRL has also entered into a platform deal with a private equity investor, to invest in new projects. Out of the platform deal 9.5 acres of land has been acquired near Porur in Chennai. The building plan approval process for the land is in progress and the Company expects to launch the project in first half of 2018-19.

EHRL through its another subsidiary has invested in a 2 acre land parcel in Radial Road, Chennai and the project to construct 279 apartments has been launched. During the year, EHRL has also acquired 6.5 acre parcel of land in OMR, Chennai.

During the year, EHRL earned a Profit Before Tax of Rs.6.56 Cr as against Rs. 5.36 Cr in the previous year on a consolidated basis.

PT. TVS Motor Company Indonesia (PT TVSM)

The industry for the year 2017-18 witnessed growth of 5% over 2016-17, after 3 years of decline. While bebek segment and motorcycle segment suffered decline of 5% and 7% respectively, matic segment grew by 8%.

For PT TVSM, the total two wheeler sales increased from 26,756 vehicles in 2016-17 to 37,096 vehicles in 2017-18 fuelled by exports.

PT TVSM recorded an EBITDA loss of 3.72 Mn USD in 2017-18 compared to 3.15 Mn USD in 2016-17.

TVS Motor Company (Europe) B.V & TVS Motor (Singapore) Pte. Ltd

TVSM had earlier incorporated both these entities with a view to serve as special purpose vehicles for making and protecting the investments made in overseas operations of PT TVSM.

TVS Motor Services Limited (TVS MS)

During the year under review, TVSM acquired the entire equity share capital of TVS MS on 7^th September 2017.

In terms of Section 2(87) of the Companies Act, 2013, by this acquisition of entire equity shares of TVS MS, TVS Credit Services Limited (TVS CS) & its subsidiaries, also became subsidiaries of the Company, as mentioned below:

1. TVS Credit Services Limited

2. TVS Two Wheeler Mall Private Limited

3. TVS Micro Finance Private Limited

4. Harita ARC Private Limited

5. Harita Collection Services Private Limited

6. TVS Commodity Financial Solutions Private Limited

7. TVS Housing Finance Private Limited

TVS MS is the investment SPV of TVSM, for funding TVS CS. TVSM acquired Non-Cumulative Redeemable Preference Shares (Preference Shares) of TVS MS held by the Company and Lucas-TVS Limited (Lucas-TVS) on 18^th December 2017 and thereby holds 100% of the Preference Share Capital of TVS MS.

TVSM settled the consideration to the Company and Lucas-TVS for the acquisition of preference shares by transferring its holding in equity shares of TVS CS, i.e, 1,35,17,547 Nos of equity shares in aggregate, to the said companies, based on the valuation report obtained from an Independent Valuer, for acquisition of Preference Shares.

TVS MS has fled a Scheme of Arrangement (Scheme) with National Company Law Tribunal (NCLT) for redemption of Preference shares by transferring its holding in TVS CS.

As per the Scheme, TVS MS will transfer its investment of 13,36,51,475 (Thirteen Crore Thirty Six Lakhs Fifty One Thousand Four Hundred and Seventy Five) equity shares of Rs. 10 (Rupees Ten) each in TVS CS (out of the total investment in 13,47,41,600 equity shares of TVS CS held by TVS MS), to TVSM, in proportion to the Preference Shares holding in the total paid-up capital of TVS MS.

On approval of the Scheme, TVS CS an NBFC Company, will become the direct subsidiary of TVSM. In this connection, RBI has also issued No Objection letter for change in the shareholding pattern of TVS CS, being a NBFC.

TVS Credit Services Limited

TVS CS is the retail finance arm of TVSM for financing of two-wheelers. In line with its long term vision of being preferred financier with diversified and profitable portfolio, TVS CS added Consumer Durable & Used Commercial Vehicle Finance portfolios during the year 2017-18.

During the year 2017-18, TVS CS’s overall disbursements registered a growth of 22% at Rs. 4,899 Cr as compared to Rs. 4,007 Cr in the previous year. The assets under management stood at Rs. 6,152 Cr as against Rs. 5,002 Cr during the previous year registering a growth of 23%. Total income during the financial year 2017-18 increased to Rs. 1,340.64 Cr from Rs. 1,114.80 Cr during the financial year 2016-17, an increase of 20.2% over the previous year.

The Profit Before Tax for the year has also improved and stood at Rs. 170.14 Cr as against Rs. 135.56 Cr during the previous year with a growth rate of 25.5%.

The subsidiaries of TVS CS are yet to commence their operations.

Sundaram-Clayton (USA) Limited

Sundaram-Clayton (USA) Limited, a wholly owned subsidiary of the Company is engaged in the business of providing Professional Employer Organization (“PEO”) services to the employees of the Company. The Company earned revenue of USD 10,167 and net income after adjustment of expenses amounted to USD 390 for the year ended 31^st March 2018.

Sundaram Holding USA Inc. (SHUI) & its subsidiaries

The Company along with Sundaram Auto Components Limited made an investment of USD 32 Mn in SHUI, a Company established under the applicable provisions of Laws of The United States of America. SHUI’s wholly owned subsidiaries are:

1. Green Hills Land holding LLC, South Carolina, USA

2. Component Equipment Leasing LLC, South Carolina, USA

3. Sundaram-Clayton USA LLC, South Carolina, USA (Formerly known as Workspace Project LLC)

4. Premier Land Holding LLC, South Carolina, USA

During the year 2017-18, SACL invested a sum of USD 20,399,250 in the ordinary shares of SHUI and the Company invested a sum of USD 6,306,318 in the ordinary shares of SHUI. As on 31^st March 2018 SACL holds 75% and SCL holds 25% in the total share capital of SHUI.

SHUI has acquired land in Dorchester County, USA for its plant, where it will manufacture High Pressure Die Cast and Gravity Cast parts. Construction at site is in progress and commercial production is expected to commence towards the end of the year 2018-19.

The loss for the financial year ended 31^st March 2018 was USD 2,278,295 due to pre-production expenses.

ASSOCIATES

TVS Training and Services Limited (TVS TSL)

TVS TSL is engaged in the business of establishing and providing vocational training services to various industries and is participating in the National Skill Development Projects. During the year, the Company earned an income of Rs. 26.55 Cr and profit for the year ended 31^st March 2018 was Rs.1.33 Cr.

Sundram Non-Conventional Energy Systems Limited (SNCES)

SNCES is engaged in the business of generation of power. During the year, the Company earned a total revenue of Rs.3.64 Cr and Prof t after tax was Rs.2.08 Cr.

8. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of the Act, 2013 read with the Companies (Accounts) Rules, 2014 and Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR) along with a separate statement containing the salient features of the financial performance of subsidiaries / associates, in the prescribed form. The audited consolidated financial statements together with Auditor’s Report forms part of the Annual Report.

The audited financial statements of the subsidiary companies will be made available to the Shareholders, on receipt of a request from any Shareholder of the Company and it has also been placed on the website of the Company. This will also be available for inspection by the Shareholders at the Registered Office during the business hours as mentioned in the Notice of AGM.

The consolidated Profit after tax of the Company and its subsidiaries & associates amounted to Rs. 628.78 Cr for the financial year 2017-18.

9. DIRECTORS & KEY MANAGERIAL PERSONNEL Independent Directors (IDs)

All IDs hold office for a fixed term and are not liable to retire by rotation. At the Annual General Meeting (AGM) held on 21^st August 2014, M/s Vice Admiral P J Jacob (Retd.), V Subramanian, S Santhanakrishnan, R Vijayaraghavan and Kamlesh Gandhi, were appointed as IDs for the fi rst term of five consecutive years from the conclusion of the fifty-second AGM, not liable to retire by rotation, and to receive remuneration by way of fees, reimbursement of expenses for participation in the meetings of the Board and / or Committees and profit related commission in terms of applicable provisions of the Act, 2013, within the overall limit, as determined by the Board from time to time.

Mr R Gopalan, was appointed as Non-Executive Independent Director effective 21^st June 2016 through Postal Ballot and he shall hold the office till the conclusion of the 57^th AGM of the Company.

On appointment, each ID has acknowledged the terms of appointment as set out in their letter of appointment. The terms cover, inter-alia, duties, rights to access information, disclosure of their interest / concern, dealing in Company’s shares, remuneration and expenses, insurance and indemnity. The IDs are provided with copies of the Company’s policies and charters of various Committees of the Board.

In accordance with Section 149(7) of the Act, 2013, all IDs have declared that they meet the criteria of independence as provided under Section 149(6) of the Act, 2013. The detailed terms of appointment of IDs is disclosed on the Company’s website in the following link: www.sundaram-clayton.com/Web%20fles/Terms%20of%20IDs.pdf.

Separate meeting of Independent Directors

During the year under review, a separate meeting of IDs was held on 15^th March 2018 and all the IDs were present at the Meeting.

Based on the set of questionnaires complete feedback on Non-Independent Directors and details of various activities undertaken by the Company were provided to IDs to facilitate their review / evaluation.

a) Non-Independent Directors (Non-IDs)

IDs used various criteria and methodology practiced in Industry, prescribed by Nomination and Remuneration Committee (NRC) for evaluation of Non-IDs M/s. Venu Srinivasan, Chairman and Managing Director, Dr. Lakshmi Venu and Sudarshan Venu, Joint Managing Directors, T K Balaji, K Mahesh and Gopal Srinivasan, Directors, Chairman of the Board and Board as a whole.

IDs evaluated the performance of all Non-IDs individually, through a set of questionnaires. They reviewed their interaction during the Board / Committee meetings and strategic inputs given by them to improve the risk management, internal controls and contribution to the Company’s growth.

IDs were satisfied fully with the performance of all Non-IDs.

b) Chairman

The IDs reviewed the performance of Chairman of the Board after taking into account his performance and benchmarked the achievement of the Company with industry under the stewardship of Chairman.

The IDs also placed on record, their appreciation of Chairman’s visionary leadership; setting tone, pace and opportunity for positive change and passion for constant improvement and admired the high standards of integrity and probity, quality and adequacy of leadership of Chairman and his versatile performance.

The IDs also endorsed that the Chairman is a very accomplished leader and is exceptionally well informed about the state of economy.

c) Board

The IDs also evaluated Board’s composition, size, mix of skills and experience, its meeting sequence, effectiveness of discussion, decision making, follow up action, so as to improve governance and enhance personal effectiveness of Directors.

The evaluation process focused on Board Dynamics and upon evaluation, IDs concluded that Board is well balanced in terms of diversity of experience with expert in each domain viz., Engineering, Finance, Legal and Administration. The Company has a Board with wide range of expertise in all aspects of business.

The IDs unanimously evaluated the pre-requisites of the Board viz., formulation of strategy, acquisition & allocation of overall resources, setting up policies, Directors’ selection process and cohesiveness on key issues and satisfied themselves that they were adequate.

They were satisfied with the Company''s performance in all fronts and fi nally concluded that the Board operates with global best practices.

d) Quality, Quantity and Timeliness of flow of Information between the Company, Management and the Board

All IDs have expressed their overall satisfaction with the support received from the management and the excellent work done by the management during the year under review and also the relationship between the top management and Board is smooth and seamless.

Directors retirement by rotation

In terms of the provisions of sub-section (6) read with explanation to Section 152 of the Act, 2013, two-thirds of the total number of Directors i.e., excluding IDs, are liable to retire by rotation and out of them, one-third are liable to retire by rotation at every AGM.

Dr. Lakshmi Venu and Mr Gopal Srinivasan, Directors are liable to retire by rotation, at the AGM, and being eligible, offer themselves for re-appointment.

As per the recent amendment to the SEBI (LODR) Regulations, effective 1^st April 2019, any appointment or continuance as a Non Executive Director who attained the age of 75 years, requires a special resolution of the Shareholders.

Mr K Mahesh, the Non-Executive Non-Independent Director (NE-NID) of the Company presently aged 74 years will attain 75 years of age by October 2018. His tenure as Director of the Company would continue beyond 1^st April 2019. The NRC and Board considered and reviewed the prof i le of Mr K Mahesh, based on his appropriate mix of skills, experience, competency and recommended his appointment to the shareholders of the Company for their approval.

The Directors have recommended the re-appointment of Directors for the approval of Shareholders. Brief resume of the Directors are furnished in the Notice convening the AGM of the Company.

Key Managerial Personnel (KMP)

In terms of Section 2(51) and Section 203 of the Act, 2013, Mr Venu Srinivasan, Chairman and Managing Director, Dr. Lakshmi Venu and Mr Sudarshan Venu, Joint Managing Directors, Mr V N Venkatanathan, Chief Financial Off cer and Mr R Raja Prakash, Company Secretary are ''Key Managerial Personnel'' of the Company as on date of this Report.

Upon reaching superannuation, Mr M Muthuraj retired as the Chief Executive Officer of the Company on 30^th April 2018.

Nomination and Remuneration Policy

The NRC of Directors reviews the composition of the Board to ensure that there is an appropriate mix of abilities, experience and diversity to serve the interests of all Shareholders of the Company.

Nomination and Remuneration Policy was approved by the Board at its meeting held on 24^th September 2014 and amended at the Board meeting held on 22^nd May 2018 in terms of Section 178 of the Act, 2013. The objective of such policy shall be to attract, retain and motivate executive management and devise remuneration structure to link to Company’s strategic long term goals, appropriateness, relevance and risk appetite.

NRC will identify, ascertain the integrity, qualification, appropriate expertise and experience, having regard to the skills that the candidate will bring to the Board / Company, whenever the need arises for appointment of Directors / KMP / SMP.

Criteria for performance evaluation, disclosures on the remuneration of Directors, criteria of making payments to Non-Executive Directors have been disclosed as part of Corporate Governance Report attached herewith.

Remuneration payable to Non-executive Independent Directors

The Shareholders through Postal Ballot on 22^nd June 2016 approved the remuneration by way of commission not exceeding 1% of the net profits in aggregate payable to Non-Executive and Independent Directors of the Company (NE-IDs) for every year, for a period of 5 years commencing from 1^st April 2016.

NE-IDs devote considerable time in deliberating the operational and other issues of the Company and provide valuable advice in regard to the management of the Company from time to time, and the Company also derives substantial benefit through their expertise and advice.

Evaluation of the Independent Directors and Committees of Directors

In terms of Section 134 of the Act, 2013 and the Corporate Governance requirements as prescribed under SEBI (LODR) Regulations, 2015, the Board reviewed and evaluated Independent Directors and its Committees viz., Audit & Risk Management Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders’ Relationship Committee, based on the evaluation criteria laid down by the NRC.

The Board concurred with the recommendations made by the NRC on the evaluation of Non-IDs based on the views expressed at the IDs’ meeting held on 15^th March 2018.

Hence, the Board carried out the evaluation of IDs (excluding the ID being evaluated) and the Board appointed Committees through a set of questionnaires.

Independent Directors

The performance of all IDs assessed against a range of criteria such as contribution to the development of business strategy and performance of the Company, understanding the major risks affecting the Company, clear direction to the management and contribution to the Board cohesion. The performance evaluation has been done by the entire Board of Directors, except the Director concerned being evaluated.

The Board noted that all IDs have understood the opportunities and risks to the Company''s strategy and are supportive of the direction articulated by the management team towards consistent improvement.

Committees

Board delegates specific mandates to its Committees, to optimize Directors’ skills and talents besides complying with key regulatory aspects.

- Audit and Risk Management Committee for overseeing financial reporting;

- Nomination and Remuneration Committee for selecting and compensating Directors / Employees;

- Stakeholders’ Relationship Committee for redressing investors grievances; and

- Corporate Social Responsibility Committee for overseeing CSR initiatives and inclusive growth.

The performance of each Committee was evaluated by the Board after seeking inputs from its Members on the basis of the specific terms of reference, its charter, time spent by the Committees in considering key issues, quality of information received, major recommendations / action plans and work of each Committee.

The Board was satisfied with overall effectiveness and decision making of all Committees. The Board reviewed each Committee''s terms of reference to ensure that the Company''s existing practices remain appropriate. Recommendations from each Committee are considered and approved by the Board prior to implementation.

Risk Management Committee

The Company occupied the position as one of the Top 500 listed companies as at 31^st March 2018. The Board constituted a separate Risk Management Committee on 22^nd May 2018 as required under the amended SEBI (LODR) Regulations. The details of composition of Committee and its charter is discussed in the Corporate Governance Report attached to this Report.

Number of Board meetings held

The number of Board meetings held during the financial year 2017-18 is provided as part of Corporate Governance Report attached to this Report.

10. AUDITORS Statutory Auditors

The Company at its f ifty f ifth AGM held on 19^th July 2017 appointed M/s Raghavan, Chaudhuri & Narayanan, Chartered Accountants, having Firm Registration No. 007761S allotted by The Institute of Chartered Accountants of India, as Statutory Auditors of the Company to hold office, for the fi rst term of five consecutive years, from the conclusion of the said AGM, subject to ratification at every AGM, at such remuneration in addition to applicable taxes, out of pocket expenses, travelling and other expenses as may be mutually agreed between the Board of Directors of the Company and the Auditors.

In terms of the above provisions, M/s Raghavan, Chaudhuri & Narayanan, Chartered Accountants have completed their fi rst year in the fi rst term of five consecutive years.

The Companies Amendment Act, 2017 has dispensed with the ratification of Statutory Auditor’s appointment at every AGM.

The Statutory Auditors of the Company were appointed for a period of f ive years in the last AGM held on 19^th July 2017 to hold off i ce till the conclusion of the 60^th AGM. Hence they will continue as Statutory Auditors for the year 2018-19 also.

The Company has obtained necessary certif i cate under Section 141 of the Act, 2013 conveying their eligibility for being Statutory Auditors of the Company for the year 2018-19.

The Auditors’ Report for the financial year 2017-18 does not contain any qualification, reservation or adverse remark and the same is attached with the annual financial statements.

Secretarial Auditor

As required under Section 204 of the Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company is required to appoint a Secretarial Auditor for auditing secretarial and related records of the Company.

As required under Section 204 of the Act, 2013, the Secretarial Audit Report for the year 2017-18, of Ms B Chandra, Practicing Company Secretary, Chennai is attached to this Report. The said Secretarial Audit Report does not contain any qualification, reservation or other remarks.

The Board at its meeting held on 22^nd May 2018 has re-appointed Ms B Chandra, Practicing Company Secretary, Chennai having Registration No. 7859 allotted by the Institute of Company Secretaries of India, as Secretarial Auditor for the financial year 2018-19.

Cost Auditor

In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board re-appointed Mr A N Raman, Cost Accountant, Chennai holding Certificate of Practice No. 5359 allotted by The Institute of Cost Accountants of India, as Cost Auditor for conducting Audit of cost records for the financial year 2018-19.

The Company has also received necessary certificate under Section 141 of the Act, 2013 from him conveying his eligibility. A sum of Rs 3 lakhs has been fixed by the board as remuneration in addition to reimbursement of all applicable taxes, travelling and out-of-pocket expenses payable to him and is also required to be ratified by the members, at the ensuing AGM as per Section 148(3) of the Act, 2013.

The Company has fled the Cost Audit Report of 2016-17 on 4^th September 2017 in XBRL format.

11. CORPORATE GOVERNANCE

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

A separate section on Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (LODR) Regulations, 2015 form part of this Annual Report.

The Chairman and Managing Director and the Chief Financial Officer of the Company have certified to the Board on financial statements and other matters in accordance with Regulation 17(8) of the SEBI (LODR) Regulations, 2015 pertaining to CEO/CFO certification for the financial year ended 31^st March 2018.

12. BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34 of the SEBI (LODR) Regulations, 2015, the Business Responsibility Report for the year 2017-18 describing the initiatives taken from an environment, social and governance perspectives, in the prescribed format is given as Annexure-VI to this Report.

13. POLICY ON VIGIL MECHANISM

The Company has adopted a Policy on Vigil Mechanism in accordance with the provisions of Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, which provides a formal mechanism for all Directors, Employees and other Stakeholders of the Company to report to the management, their genuine concerns or grievances about unethical behaviour, actual or suspected fraud and any violation of the Company’s Code of Business Conduct and Ethics.

The Code also provides a direct access to the Chairman of the Audit Committee to make protective disclosures to the management about grievances or violation of the Company’s Code.

The Board at its meeting held on 22^nd May 2018 has made an amendment to the Whistle Blower Policy for reporting any allegations of material nature on Directors / Employees within a reasonable time limit from the occurrence of such events.

The policy is disclosed on the Company’s website in the following link www.sundaram-clayton.com/Web%20fles/Investors/Whistle%20Blower%20Policy.pdf.

14. PUBLIC DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Section 76 of the Act 2013, for the year ended 31^st March 2018.

15. STATUTORY STATEMENTS

Information on conservation of energy, technology absorption, foreign exchange, etc:

Relevant information is given in Annexure-I to this Report, in terms of the requirements of Section 134(3)(m) of the Act 2013 read with the Companies (Accounts) Rules, 2014.

Material changes and commitments:

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

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

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

Annual Return:

Extract of Annual Return in the prescribed form is given as Annexure-II to this Report, in terms of the requirement of Section 134(3)(a) of Act 2013 read with the Companies (Accounts) Rules, 2014.

Employees'' remuneration:

Details of employees receiving the remuneration in excess of the limits prescribed under Section 197 of the Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as a statement and given in Annexure-III. In terms of fi rst proviso to Section 136(1) of the Act 2013 the Annual Report, excluding the aforesaid annexure is being sent to the Shareholders of the Company. The annexure is available for inspection at the Registered Office of the Company during business hours as mentioned in the Notice of AGM and any

Shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Off i ce of the Company.

Comparative analysis of remuneration paid:

A comparative analysis of remuneration paid to Directors and employees with the Company''s performance is given as Annexure-V to this Report.

Details of related party transactions:

There were no material related party transactions under Section 188 of the Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

Details of loans / guarantees / investments made:

During the year under review, the Company had not granted any loans or guarantees covered under Section 186 of the Act 2013.

Please refer note no.3 to Notes on accounts for the financial year 2017-18, for details of investments made by the Company.

Reporting of fraud:

The Auditors of the Company have not reported any fraud as specif ed under Section 143(12) of the Act, 2013.

Other laws

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

16. ACKNOWLEDGEMENT

The Directors gratefully acknowledge the continued support and co-operation received from the promoters of the Company, viz., T V Sundram Iyengar & Sons Private Limited, Southern Roadways Limited, Sundaram Industries Private Limited and Sundaram Finance Holdings Limited.

The Directors thank the vehicle manufacturers, vendors and bankers for their continued support and assistance.

The Directors wish to place on record their appreciation of the continued excellent work done by all the employees of the Company during the year.

The Directors specially thank the shareholders for their continued faith in the Company.

For and on behalf of the Board of Directors

Chennai VENU SRINIVASAN

22^nd May 2018 Chairman

---

Mar 31, 2017

The directors have pleasure in presenting the fifty-fifth annual report and the audited financial statements for the year ended 31^st March 2017.

1. FINANCIAL HIGHLIGHTS

(Rs. in Cr)

Details	Year ended 31.03.2017	Year ended 31.03.2016
Sales (including Excise duty) and other income	1589.67	1633.03
EBITDA	206.57	243.69
Less: Finance Cost	28.54	32.25
Depreciation	60.64	54.95
Profit before tax before exceptional items	117.39	156.49
Add : Exceptional Item (Income)	2.28	6.03
Profit before tax	119.67	162.52
Provision for tax	14.08	18.08
Profit for the year after tax	105.59	144.44
Add: Balance in Statement of Profit and Loss including General Reserve	381.03	334.02
Add: Transfer from Other Comprehensive Income	3.66	(2.28)
Total Comprehensive Income available
for appropriation	490.28	476.18
Appropriations: Dividend and Dividend Distribution tax	64.13	95.15
Surplus carried forward	426.15	381.03
	490.28	476.18

2. DIVIDEND

The board of directors of the Company at its meeting held on 3^rd November 2016, declared a first interim dividend of Rs.15 per share (300%) for the year 2016-2017, thereby absorbing a sum of Rs.30.35 Cr. The same was paid to the shareholders on 16^th November 2016.

The board again at its meeting held on 13^th March 2017, declared a second interim dividend of Rs.16.50 per share (330%) for the year 2016-2017, thereby absorbing a sum of Rs.33.38 Cr. The same was paid to the shareholders on 24^th March 2017.

Hence, the total amount of both dividends paid for the year ended 31^st March 2017 will aggregate to Rs.31.50 per share (630%) absorbing a sum of Rs.63.73 Cr on 2,02,32,085 equity shares of Rs.5/- each.

The Company has set-off its dividend distribution tax payable under Section 115-O(1A) of the Income Tax Act, 1961 against the dividend distribution tax paid by one of its subsidiary company on its dividend declared to the extent available.

The board does not recommend any further dividend for the year under consideration.

3. PERFORMANCE

The International Monetary Fund (IMF) referred to India as a “bright spot” in the global economy, however, 2016-17 was punctuated with several challenging developments such as below normal monsoon, demonetization of high value currency notes in India, which contributed to subdued growth across sectors.

Gross Domestic Product (GDP) in India registered a lower growth of 6.6% in 2016-17 (7.8% in 2015-16).

Global economic and geo political environment continued to be volatile during 2016.The GDP in the U.S. and EU markets registered a growth of 1.6% (2.6% in 2015) and 1.7% (1.5% in 2015) respectively.

The following table highlights the performance of the Company during 2016-17:

Particulars	FY 2016-17	FY 2015-16	Variance (in %)
Sales (Tonnage)	45,676	45,675	-
Sale of goods (Rs. in Cr)	1,295.3	1,346.4	(3.8)
Domestic sales (Rs. in Cr)	793.1	799.5	(0.8)
Export sales (Rs. in Cr)	502.2	546.9	(8.2)
Profit before Tax (Rs. in Cr)	119.7	162.5	(26.3)

4. DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Act, 2013, with respect to Directors’ Responsibility Statement, it is hereby stated -

i. that in the preparation of annual accounts for the financial year ended 31^st March 2017, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;

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

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

iv. that the directors had prepared the annual accounts for the financial year ended 31^st March 2017 on a “going concern basis”;

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

vi. that 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.

5. CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR activities have already been textured into the Company’s value system through Srinivasan Services Trust (SST), the CSR arm of the Company established in 1996 with the vision of building self-reliant rural community.

Over 21 years of service, SST has played a pivotal role in changing lives of people in rural India by creating self-reliant communities that are models of sustainable development.

The Company is eligible to spend on their ongoing projects / programmes, falling within the CSR activities specified under the Act 2013, as mandated by the Ministry of Corporate Affairs for carrying out the CSR activities.

The Committee formulated and recommended a CSR policy in terms of Section 135 of the Act, 2013, along with a list of projects / programmes to be undertaken for CSR spending in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Based on the recommendation of the CSR Committee, the board has approved the projects / programmes carried out as CSR activities by the following non-profitable organizations having an established track record for more than the prescribed years in undertaking similar programmes / projects, constituting more than 2% of average net profits, made during the three immediately preceding financial years, towards CSR spending for the current financial year 2016-2017 amounting to Rs.85 lakhs:

(Rs. in Lakhs)

S No	Name of the Trust	Amount spent
1.	Srinivasan Services Trust	50
2.	Sri Sathya Sai Loka Seva Trust	35
	Total	85

Presently, SST is working in 5,000 villages spread across Tamil Nadu, Karnataka, Maharashtra, Himachal Pradesh and Andhra Pradesh covering about 31,44,590 population and 7,19,890 families. Its major focus are Economic development, health care, quality education, environment and infrastructure.

Of the 5,000 villages, 3,172 villages (19,19,952 population and 4,27,048 families) have been funded by the Company and its subsidiary during the year.

Achievements in these 3,172 villages are:

Economic development:

- 2,96,003 families living in these villages have a monthly income of above Rs.15,000/- which make them financially secured.

- 2,985 farmers groups have been formed with 42,965 members.

- Improved agriculture practices enabled 1,92,147 farmers owning 2,08,925 hectares to increase the yields higher than the state average by 15%.

- 1,74,958 families earn more than Rs 3,500/- per month through livestock.

Women empowerment:

- Formed 8,115 Self Help Groups with 1,22,604 women as members.

- Out of 1,22,604 members, 1,17,762 members are in income generation activities. They earn a minimum income of Rs. 3000/per month.

Health care:

- 63,996 children in the age group below 5 are not malnourished.

- 3,99,710 women are free from anaemia.

- 2,87,009 households made access to toilet facilities.

- The morbidity percentage reduced from 9% to 5%.

- Enrolment in anganwadis increased from 86% to 100% and attendance is 99%.

- 1,441 anganwadis have met all the Integrated Child Development Services Scheme (ICDS) standards.

- 88% involvement of mother volunteers in anganwadis have ensured their proper functioning.

Quality education:

- 100% enrolment of children in schools. There are no drop outs in the schools.

- Number of percentage of slow learners reduced in schools from 27% to 8%.

- Out of 1,460 schools, 999 schools are now model schools.

- 93,007 illiterate women out of 1,33,505 have been made literate.

Environment and Infrastructure:

- 2,65,176 households dispose solid waste through individual and common compost pits. 89 tons of vermi compost generated per month from wastes.

- Sewage water from 2,64,583 households disposed through soak pits, kitchen gardens and drain.

- Safe drinking water made available to 2,994 villages.

Community takes care of their development needs. 8,853 social leaders are active in this effort.

As required under Section 135 of the Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the annual report on CSR containing the particulars of the projects / programmes approved and recommended by CSR Committee and approved by the board for the financial year 2016-17 are given by way of Annexure IV attached to this Report.

6. PERFORMANCE OF SUBSIDIARIES & ASSOCIATES

The following companies and bodies corporate are the subsidiaries and associates of the Company:

Subsidiaries

1. TVS Motor Company Limited, Chennai;

2. Sundaram-Clayton (USA) Limited, USA;

3. Sundaram Auto Components Limited, Chennai;

4. TVS Housing Limited, Chennai;

5. PT. TVS Motor Company Indonesia, Jakarta;

6. TVS Motor Company (Europe) B.V., Amsterdam, Netherlands;

7. TVS Motor (Singapore) Pte. Limited, Singapore;

8. Sundaram Holding USA Inc., Delaware, USA;

9. Green Hills Land holding LLC, South Carolina, USA;

10. Component Equipment Leasing LLC, South Carolina, USA;

11. Workspace Project LLC, South Carolina, USA; and

12. Premier Land Holding LLC, South Carolina, USA.

Associates

1. TVS Training and Services Limited, Chennai;

2. Sundram Non-conventional Energy Systems Limited, Chennai; and

3. Emerald Haven Realty Limited, Chennai.

SUBSIDIARIES

TVS Motor Company Limited (TVSM)

TVS Motor Company Limited is engaged in the business of manufacture of two and three wheelers. During the year 2016-17, TVSM achieved a turnover of Rs.13,363.43 Cr and earned a profit before tax of Rs.698.68 Cr.

TVSM for the year 2016-17, declared first interim dividend of Rs.1.25 per share (125%) absorbing a sum of Rs.70.25 Cr including dividend distribution tax and a second interim dividend of Rs.1.25 per share (125%) absorbing a sum of Rs.71.04 Cr including dividend distribution tax. The total amount of dividend for the year ended 31^st March 2017 aggregated to Rs.2.50 per share (250%) on 47,50,87,114 equity shares of Re.1 each.

Sundaram Auto Components Limited (SACL)

Sales of SACL grew 5% upto October 2016 but were affected during the period from November 2016 to March 2017 consequent to impact of demonetization. In addition, the change from BS III to BS IV emission norms resulted in OEMs’ reducing their inventory which lead to lower offtake from SACL. Consequently, the turnover of plastic components business declined marginally from Rs.552 Cr in 2015-16 to Rs.539 Cr in 2016-17.

Total turnover of SACL including Two wheeler distribution business grew by 4% and revenue increased from Rs.2795 Cr to Rs. 2915.95 Cr. SACL earned a profit before tax of Rs.34.93 Cr during the year 2016-17.

SACL was recognized and awarded certificates in the areas of new product development support, innovation and material handling from Takata, Daimler India and Hannon Automotive, respectively during the year.

SACL at their meeting held on 22^nd October 2016, declared first interim dividend of Rs.5 per share on 1,20,50,000 equity shares of Rs.10 each, absorbing a sum of Rs.7.25 Cr including dividend distribution tax. SACL at their meeting held on 3^rd March 2017 declared second interim dividend of Rs.1.50 per share on 1,45,50,000 equity shares of Rs.10 each, absorbing a sum of Rs.2.63 Cr including dividend distribution tax. Hence, the total amount of dividend paid per share, aggregated to Rs.6.50 (65%) for the year ended 31^st March 2017 thereby absorbing a sum of Rs.9.88 Cr including dividend distribution tax.

TVS Housing Limited (TVSH) / Emerald Haven Realty Limited (EHRL)

EHRL is the developer of Nedungundram, Chennai project of TVSH. Phase 1 was developed as apartments and all the 448 apartments have been sold and customers have taken possession. Phase 2 was launched as villas and row houses and as of 31^st March 2017, 98% of the 120 villas and row houses have been sold and customers have taken possession of the same. During the year, EHRL launched 15 Public Purpose Plots and successfully sold over 73% of the plots and construction of villas are in full progress.

PT.TVS Motor Company Indonesia (PT TVSM)

The industry for the year 2016-17 has suffered a decline of 8%. The bebek segment declined by 26%, the sports motorcycle segment dropped by 12% and the matic segment was the least affected with a marginal decline of 4%.

The segment share of matic has now gone upto 78%. The continued decline of two-wheeler industry was attributed to slower economic growth due to subdued commodity prices and further tightening of credit by multi finance companies.

PT TVSM focus to improve export of products from Indonesia has been successful. The total two-wheeler sales increased from 17,100 vehicles in 2015-16 to 26,750 vehicles in 2016-17.

Export of two-wheeler sales increased from 15,000 to 25,000 numbers registering a growth of 67% over previous year. PT TVSM continues to focus on African, LATAM and ASEAN countries. The increased sales and focus on cost reduction helped PT TVSM to reduce EBITDA loss from 6.42 Mn USD in 2015-16 to 3.15 Mn USD in 2016-17.

TVS Motor Company (Europe) B.V & TVS Motor (Singapore) Pte. Limited

TVSM had earlier incorporated both these entities with a view to serve as special purpose vehicles for making and protecting the investments made in overseas operations of PT TVSM.

Sundaram-Clayton (USA) Limited

Sundaram-Clayton (USA) Limited, a wholly owned subsidiary of the Company is engaged in the business of providing Professional Employer Organisation (“PEO”) services to the employees of the Company. The Company earned revenue of USD 10,064 and net income after adjustment of expenses amounted to USD 387 for the year ended 31^st March 2017.

Sundaram Holding USA Inc (SHUI), and its subsidiaries

The Company alongwith its subsidiary viz., SACL has made an investment of 5.3 Mn USD in SHUI, a Company established under the applicable provisions of Laws of United States of America for carring out the business of the Company. SHUI’s wholly owned subsidiaries are:

1. Green Hills Land Holding LLC, South Carolina, USA;

2. Component Equipment Leasing LLC, South Carolina, USA;

3. Workspace Project LLC, South Carolina, USA; and

4. Premier Land Holding LLC, South Carolina, USA.

SHUI has acquired land in Dorchester County, USA for its plant, where it will manufacture High Pressure Die Cast and Gravity Cast parts. Construction at the site is expected to begin during the first half of 2017-18 and commercial production expected to commence towards the end of 2018-19.

ASSOCIATES

TVS Training and Services Limited (TVS TSL)

TVS TSL is engaged in the business of establishing and providing vocational training services to various industries and is participating in the National Skill Development Projects. During the year ended 31^st March 2017, the Company had an income of Rs. 15.17 Cr and loss of Rs.0.42 Cr.

Sundram Non-Conventional Energy Systems Limited (SNCES)

SNCES is engaged in the business of generation of power. During the year, SNCES earned revenue of Rs.3.64 Cr and profit before tax was Rs.2.90 Cr.

Financial position of all subsidiaries and associate companies are provided as part of consolidated financial statements in Form AOC-1 in the manner required under Section 129 read with the Companies (Accounts) Rules, 2014 of the Act, 2013.

7. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of the Act, 2013 read with the Companies (Accounts) Rules, 2014 and Regulation 33 of SEBI (LODR) Regulations along with a separate statement containing the salient features of the financial performance of subsidiaries / associates in the prescribed form. The audited consolidated financial statements together with Auditors’ Report form part of the Annual Report.

The audited financial statements of the subsidiary companies will be made available to the shareholders, on receipt of a request from any shareholder and it has also been placed on the website of the Company. This will also be available for inspection by the shareholders at the registered office during business hours.

The consolidated profit after tax of the Company and its subsidiaries & associates amounted to Rs. 547.07 Cr for the financial year 2016-17 as compared to Rs.472.40 Cr in the previous year.

8. DIRECTORS & KEY MANAGERIAL PERSONNEL

Independent Directors (IDs)

At the annual general meeting held on 21^st August 2014, M/s. Vice Admiral P J Jacob (Retd.), V Subramanian, S Santhanakrishnan, R Vijayaraghavan and Kamlesh Gandhi, were appointed as IDs for the first term of five consecutive years from the conclusion of the fifty-second Annual General Meeting and to receive remuneration by way of fees, reimbursement of expenses for participation in the meetings of the board and / or committees and profit related commission in terms of applicable provisions of the Act 2013, as determined by the board from time to time.

During the year, Mr R Gopalan, was appointed as a Non-executive independent director effective 21^st June 2016 through postal ballot and he shall hold office till the conclusion of the 57^th Annual General Meeting (to be held in 2019).

On appointment, each ID has acknowledged the terms of appointment as set out in their letter of appointment. The terms cover, inter alia, duties, right to access information, disclosure of their interest / concern, dealing in Company’s shares, remuneration and expenses, insurance and indemnity. The IDs are provided with copies of the Company’s policies and charters of various committees of the board.

In accordance with Section 149(7) of the Act, 2013, all IDs have declared that they meet the criteria of independence as provided under Section 149(6) of the Act, 2013.

The detailed terms of appointment of IDs are disclosed on the Company’s website in the following link:www.sundaram-clayton.com/Web%20files/Terms%20of%20IDs.pdf.

Separate meeting of Independent Directors

During the year under review, a separate meeting of IDs was held on 13^th March 2017 and all the Independent Directors were present at the Meeting.

Complete feedback on Non-Independent Directors and details of various activities undertaken by the Company were provided to them to facilitate their review / evaluation through a set of questionnaire.

Non-Independent Directors (Non-IDs) and their evaluation

The Independent Directors (IDs) used various criteria and methodology as practiced in Industry for evaluation of Non-IDs viz., M/s. Venu Srinivasan, Chairman and Managing Director, Dr. Lakshmi Venu and Sudarshan Venu, Joint Managing Directors, T K Balaji, K Mahesh and Gopal Srinivasan, Directors.

IDs evaluated the performance of all Non-IDs individually, through a set of questionnaires. They reviewed their interaction during the board / committee meetings and strategic inputs given by them to improve risk management, internal controls and contribution to the Company’s growth.

IDs were satisfied with the performance of all Non-IDs.

Chairman

The IDs reviewed the performance of Chairman of the Board by benchmarking the achievement of the Company with industry under his stewardship. The IDs appreciated the probity, quality and leadership of Chairman and his proactive role on strategic issues and passion for customer centricity, improving the quality of the products and for guarding the values of the Company.

Board

The IDs also evaluated board’s composition, size, mix of skills and experience, its meeting sequence, effectiveness of discussion, decision making, follow up action, so as to improve governance and enhance personal effectiveness of directors.

The board upon evaluation concluded that it is well balanced in terms of diversity of experience with expert in each domain viz., Engineering, Finance, Legal and Administration. The Company has a board with wide range of expertise in all aspects of business.

The IDs unanimously evaluated the prerequisites of the board viz., formulation of strategy, acquisition & allocation of overall resources, setting up policies, directors’ selection process including sucession planning and cohesiveness on key issues.

They were satisfied with the Company’s performance in all fronts and finally concluded that the board operates with best global practices.

Quality, Quantity and Timeliness of flow of Information between the Company, Management and the Board

All IDs have expressed their overall satisfaction with the support received from the management and the excellent work done by the management during the last year.

The IDs appreciated the management for their hard work and commitment to meet the corporate goals and also expressed that the relationship between the top management and board is smooth and seamless.

Directors retirement by rotation

In terms of Section 152 of the Act 2013, two-thirds of the total number of directors i.e., excluding IDs, are liable to retire by rotation and out of which, one-third are liable to retire by rotation at every annual general meeting.

Mr Sudarshan Venu, Joint Managing Director and Mr K Mahesh, director are liable to retire by rotation, at the ensuing AGM, and being eligible, offer themselves for re-appointment.

The nomination and remuneration committee of directors and the board recommended their re-appointment. Their brief resumes have been furnished in the Notice convening the AGM of the Company. Appropriate resolutions for their re-appointment are being placed for approval of the shareholders at the ensuing AGM.

Key Managerial Personnel (KMP)

During the year, Mr M Muthuraj, President was appointed as Chief Executive Officer of the Company in place of Mr C N Prasad, effective 7^th February 2017.

Mr Venu Srinivasan, Chairman and Managing Director, Dr. Lakshmi Venu and Mr Sudarshan Venu, Joint Managing Directors, Mr M Muthuraj, Chief Executive Officer, Mr V N Venkatanathan, Chief Financial Officer and Mr R Raja Prakash, Company Secretary are ‘Key Managerial Personnel’ of the Company, in terms of Section 2(51) and Section 203 of the Act, 2013.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee of Directors (NRC) reviews the composition of the board to ensure an appropriate mix of abilities, experience and diversity to serve the interests of all shareholders of the Company.

Nomination and Remuneration Policy was approved by the board at its meeting held on 24^th September, 2014 in terms of Section 178 of the Act, 2013. The objective of such policy shall be to attract, retain and motivate executive management and remuneration structured to link to Company’s strategic long term goals, appropriateness, relevance and risk appetite of the Company.

The process of appointing a director / KMP / SMP is that, when there is a need or a vacancy arises, or is expected, the NRC will identify, ascertain the integrity, qualification, appropriate expertise and experience, having regard to the skills that the candidate will bring to the board / Company in addition to what the existing members hold.

Criteria for performance evaluation, disclosures on the remuneration of directors, criteria of making payments to non-executive directors have been disclosed as part of Corporate Governance Report attached herewith.

Remuneration payable to Non-executive Independent Directors

The shareholders through postal ballot on 22^nd June 2016 approved the remuneration by way of commission not exceeding 1% of the net profits in aggregate payable to non-executive and independent directors of the Company (NE-IDs) for every year, for a period of 5 years commencing from 1^st April 2016.

NE-IDs devote considerable time in deliberating the operational and other issues of the Company and provide valuable advice in regard to the management of the Company from time to time, and the Company also derives substantial benefit through their expertise and advice.

Evaluation of the Independent Directors and committees of directors

In terms of Section 134 of the Act, 2013 and the Corporate Governance requirements as prescribed under SEBI (LODR) Regulations, the board reviewed and evaluated Independent directors and its committees viz., Audit & Risk Management Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders Relationship Committee based on the evaluation criteria laid down by the NRC.

Independent Directors

The performance of all Independent directors (IDs) was assessed against a range of criteria such as contribution to the development of business strategy and performance of the Company, understanding the major risks affecting the Company, clear direction to the management and contribution to the board cohesion. The performance evaluation has been done by the entire board of directors except the director concerned being evaluated.

The board noted that all IDs have understood the opportunities and risks to the Company’s strategy and are supportive of the direction articulated by the management team towards consistent improvement.

Committees

Board delegates specific mandates to its various committees, to optimize directors’ skills and talents besides complying with key regulatory aspects.

- Audit and Risk Management Committee for overseeing financial reporting and risk minimisation;

- Nomination and Remuneration Committee for selecting and compensating directors / employees;

- Stakeholders’ Relationship Committee for redressing investors grievances; and

- Corporate Social Responsibility Committee for overseeing CSR initiatives.

The performance of each committee was evaluated by the board after seeking inputs from its members on the basis of the specific terms of reference, its charter, time spent by the committees in considering key issues, major recommendations, action plans and work of each committee.

The board is satisfied with overall effectiveness and decision making of all committees. The board reviewed each committee’s terms of reference to ensure that the Company’s existing practices remain appropriate. Recommendations from each committee are considered and approved by the board prior to implementation.

Number of board meetings held:

The number of board meetings held during the financial year 2016-17 are provided as part of Corporate Governance Report prepared in terms of SEBI (LODR) Regulations.

9.AUDITORS

Statutory Auditors

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

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

The Audit and Risk Management Committee and the Board of Directors of the Company have recommended the appointment of M/s. Raghavan, Chaudhuri and Narayanan, Chartered Accountants, Bengaluru (ICAI Firm Registration Number 007761S) as Statutory Auditors of the Company, subject to the approval of the shareholders. They have given their consent for the said appointment and confirmed that their appointment, if made, would be within the limits mentioned under the provisions of Section 141 of the Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.

They will hold office as statutory auditors for the first term of five years from the conclusion of the 55^th Annual General Meeting till the conclusion of 60^th Annual General Meeting of the Company, subject to ratification of their appointment by Members at every Annual General Meeting held during their tenure of office as statutory auditors.

The Auditors’ Report for the financial year 2016-17 does not contain any qualification, reservation or adverse remark and the same is attached with the annual financial statements.

Secretarial Auditor

Ms B Chandra , Practising Company Secretary, Chennai, was appointed as Secretarial Auditor for carrying out the secretarial audit for the financial year 2016-17.

As required under Section 204 of the Act, 2013, the Secretarial Audit Report for the year 2016-17, given by her is attached to this report. The Secretarial Audit Report does not contain any qualifications, reservations or other remarks.

The Board at its meeting held on 3^rd May 2017 has re-appointed Ms B Chandra, Practising Company Secretary as Secretarial Auditor for the financial year 2017-18.

Cost Auditor

In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the board, re-appointed Mr A N Raman, Cost Accountant, Chennai holding Certificate of practice No. 5359 allotted by The Institute of Cost Accountants of India, as a Cost Auditor for conducting Audit of cost records for the financial year 2016-17.

The Company has also received necessary certificate under Section 141 of the Act, 2013 from him conveying his eligibility. A sum of Rs.3 lakhs has been fixed by the board as remuneration in addition to reimbursement of all applicable taxes, travelling and out-of-pocket expenses payable to him and is also required to be ratified by the members, at the ensuing AGM as per Section 148(3) of the Act, 2013. The Company has filed the Cost Audit Report of 2015-16 on 13^th September 2016.

10. CORPORATE GOVERNANCE

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

A separate section on the Company’s Corporate Governance and a certificate from the statutory auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (LODR) Regulations forms part of this Annual Report.

The chairman and managing director and the chief financial officer of the Company have certified to the board on financial statements and other matters in accordance with Regulation 17(8) of SEBI (LODR) Regulations pertaining to CEO & CFO certification for the financial year ended 31^st March 2017.

11. BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34 of SEBI (LODR) Regulations, the Business Responsibility Report for the year 2016-17 describing the initiatives taken from environment, social and governance perspectives, in the prescribed format is given as Annexure - VI.

12. POLICY ON VIGIL MECHANISM

The Audit and Risk Management Committee has adopted a Policy on Vigil Mechanism in accordance with the provisions of the Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, which provides a formal mechanism for all directors, employees and other stakeholders of the Company to report to the management, their genuine concerns or grievances about unethical behaviour, actual or suspected fraud and any violation of the Company’s Code of conduct or ethics policy.

The policy also provides a direct access to the Chairperson of the Audit and Risk Management Committee to make protective disclosures to the management about grievances or violation of the Company’s Code of Conduct.

The policy is disclosed on the Company’s website in the following link: www.sundaram-clayton.com/Web%20files/Investors/Whistle%20Blowei%020Policy.pdf.

13. PUBLIC DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Section 76 of the Act, 2013, for the year ended 31^st March 2017.

14. STATUTORY STATEMENTS

Information on conservation of energy, technology absorption, foreign exchange, etc.,

Relevant information is given in Annexure I to this report, in terms of the requirements of Section 134(3)(m) of the Act, 2013 read with the Companies (Accounts) Rules 2014.

Material changes and commitments

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

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

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

Annual Return

Extract of Annual Return in the prescribed form is given as Annexure II to this report, in terms of the requirement of Section 134(3)(a) of Act, 2013 read with the Companies (Accounts) Rules, 2014.

Employee’s remuneration

Details of employees receiving the remuneration as prescribed under Section 197 of the Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure III. In terms of first proviso to Section 136(1) of the Act, 2013 the Annual Report, excluding the aforesaid annexure is being sent to the shareholders of the Company. The annexure is available for inspection at the Registered Office of the Company during business hours and any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

Comparative analysis of remuneration paid

A comparative analysis of remuneration paid to Directors and employees with the Company’s performance is given as Annexure V to this report .

Details of material related party transactions

There were no material related party transactions under Section 188 of the Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

Details of loans / guarantees / investments made

During the year under review, the Company had not granted any loans or guarantees covered under Section 186 of the Act, 2013.

Please refer note number - 3 to Notes on accounts for the financial year 2016-17 for details of investments made by the Company.

Reporting of fraud

The auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act, 2013.

Other laws

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

15. ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co-operation received from the promoters of the Company, viz., T V Sundram Iyengar & Sons Private Limited, Southern Roadways Limited, Sundaram Industries Private Limited and Sundaram Finance Limited.

The directors thank the vehicle manufacturers, vendors and bankers for their continued support and assistance.

The directors wish to place on record their appreciation of the excellent work done by all the employees of the Company during the year.

The directors specially thank the shareholders for their continued faith in the Company.

For and on behalf of the board

Chennai VENU SRINIVASAN

3^rd May 2017 Chairman

---

Mar 31, 2016

The directors have pleasure in presenting the fifty fourth annual report and the audited financial statements for the year ended 31st March 2016.

1. FINANCIAL HIGHLIGHTS

(Rs. in Cr)

Details Year ended Year ended 31.03.2016 31.03.2015

Sales and other income 1517.17 1,401.11

Profit before finance cost and depreciation 235.78 178.05

Less: Finance Cost 32.83 36.88

Depreciation 54.95 59.82

Profit after finance cost and depreciation 148.00 81.35

Add : Exceptional Item (Income) 6.03 3.06

Profit before tax 154.03 84.41

Less: Provision for :

Income tax 12.00 9.50

Tax relating to earlier years (1.57) -

Deferred tax 4.00 3.75

Profit after tax 139.60 71.16

Surplus brought forward from previous year 103.23 77.63

Total 242.83 148.79

Appropriations:

First interim dividend paid 42.49 18.21

Second interim dividend paid 40.46 8.09

Third interim dividend payable - 12.14

Dividend tax paid 0.06 -

Transfer to general reserve - 7.12

Balance carried to Balance Sheet 159.82 103.23

Total 242.83 148.79

2. DIVIDEND

The board of directors of the Company at its meeting held on 9th February 2016, declared a first interim dividend of Rs.21/- per share (420%) for the year 2015-16, absorbing a sum of Rs.42.55 Cr. including dividend distribution tax. The same was paid to the shareholders on 20th February 2016.

The board at its meeting held on 22nd March 2016, declared a second interim dividend of Rs.20/- per share (400%) for the year 2015-2016, absorbing a sum of Rs.40.46 Cr. The same was paid to the shareholders on 28th March 2016.

Hence, the total amount of both dividends paid for the year ended 31st March 2016 will aggregate to Rs. 41/- per share (820%) absorbing a sum of Rs.83.01 Cr on 2,02,32,085 equity shares of Rs.5/- each.

The Company has set-off its dividend distribution tax payable under Section 115-O(1A) of the Income Tax Act, 1961 against the dividend distribution tax paid by one of its subsidiary company on its dividend declared to the extent available.

The board does not recommend any further dividend for the year under consideration.

3. PERFORMANCE

During the year 2015-16, the domestic macro-economic conditions largely remained consistent with that of the previous year. The Gross Domestic Product (GDP) registered a growth of 7.4% (2014-15: 7.3%). The Consumer Price Index (CPI) has been subdued at 4.9%.

Global economic environment continued to be weak and uncertain during 2015-16. In the US, the sluggish economy continued and consumer sales activity remained relatively tepid. The GDP in the US market registered a growth of 2.4% (2014:2.4%). The GDP in EU registered a growth of 1.5% (2014: 0.9%).

The following table highlights the performance of the Company during 2015-16:

Particulars FY FY Variance 2015-16 2014-15 (in %)

Sales (Tonnage) 45,675 44,065 3.6

Sale of goods (Rs. in Cr) 1,343.4 1,283.8 4.6

Domestic sales (Rs. in Cr) 796.5 752.9 5.8

Export sales (Rs. in Cr) 546.9 530.9 3.0

Profit before Tax (Rs. in Cr) 154.0 84.4 82.5

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

I. Industry Structure and Development:

Domestic

The segment wise performance in the Indian automotive industry is given in the following table.

FY FY Variance Category 2015-16 2014-15 (in %)

Two Wheelers 1,89,37,104 1,84,33,027 2.7

Passenger Vehicles 34,43,567 32,22,577 6.9

Commercial Vehicles 7,87,393 7,01,887 12.2

(Source: SIAM)

The Indian auto industry (domestic sales and exports) posted an overall growth of 3.5% (Source: SIAM). The industry''s performance was muted during FY15-16 with motorcycle, tractor, light commercial vehicle and construction equipment segments remaining weak.

Exports

The following table highlights the North American and European truck registration figures in vehicle units:

(in Nos)

FY FY Variance Market Category 2015-16 2014-15 (in %)

North America Class 8 Trucks 289,109 286,094 1.1

North America Class 4-7 Trucks 234,736 216,785 8.3

Europe Medium & Heavy trucks 270,099 226,117 19.5

(Source: FTR & ACEA)

Class 8 trucks reached the end of the cyclical upturn by mid of 2015. The sales and factory shipments declined by over 12% in the second half of the financial year.

II. Business Outlook and Overview

With no visible shift in the economic momentum, GDP growth rate in India for FY 2016-17 is likely to hover around 7.3% to 7.5%. A number of factors like low inflation, comfortable current account deficit (CAD), robust services growth, mild recovery in agriculture and supportive fiscal policy may help sustain growth rate at current levels.

In FY 2016-17, implementation of the seventh pay commission and government outlays under various schemes such as MUDRA, OROP are expected to support urban / semi-urban segments like passenger vehicle and two-wheeler. Rural demand will be contingent on healthy monsoon.

Given the economic outlook, the automobiles and auto-component sectors are expected to grow at similar levels in FY 2016-17.

Over the medium to long term, growth in the auto component industry is likely to be higher than the underlying automotive industry growth given the increasing localization by OEMs, higher component content per vehicle. Auto component export is another key growth driver. The "Make in India" pitch may further boost the growth of the component industry.

Globally, IMF continues to lower the GDP growth forecast. For 2016, the forecast has been reduced from 3.6% to 3.4%. Growth in advanced economies is expected to remain at 2.1%.

In the US, consumer spending and employment growth has been healthy, keeping the economy in the positive range. Instability in the financial markets may result in growth slipping to near recession conditions. Current data indicates that the US economy is continuing on its long-term, near 2% GDP growth rate.

The US truck market (Class 8) volumes are expected to significantly decline by over 20-25% in 2016. The market is expected to downshift to a lower, but more sustainable level.

The EU truck markets are expected to continue recovering in 2016 supported by gradually improving economic outlook. Lower fuel prices, credit availability and deferred replacement demand are all positive factors that are expected to support growth in 2016.

III. Opportunities & Threats

The Company supplies aluminum castings in machined condition for commercial vehicles, passenger cars and two wheeler segments of the automotive industry.

The revenue of the Company is derived from Medium & Heavy Commercial Vehicles (MHCV) (50%), followed by car industry (26%) and two wheeler industry (24%).

In the medium to long term, the projected growth of domestic auto industry, and ambitious export plans of the Indian OEMs are likely to benefit the Company.

In view of stringent emission norms and fuel economy regulations, the thrust towards light-weighting is bound to increase leading to higher content of aluminum in all vehicle types. The Company is well placed to leverage these emerging opportunities. This will provide for increased growth opportunities, since the company is already a preferred source for aluminum castings to major OEM''s in India and abroad.

India is emerging as one of the major manufacturing hubs, thanks to availability of well-educated engineers, skilled workforce and good supply base.

Several Indian die casting companies and OEMs are either setting up new capacities or expanding existing capacities resulting in increased competition.

Intense competition makes it extremely difficult to seek price increases to compensate the effects of inflation bringing the margins under severe pressure. However, the Company''s supply contracts provide for periodic price adjustments indexed to the international prices of aluminum and this should offer some protection against volatility of commodity prices.

IV. Risks and concerns Economy

There are possible risks on the horizon, both external and domestic. Spill-overs from weak global growth and potential global financial market volatility could be disruptive.

The international markets remain fragile. There are rising uncertainties concerning China''s economy and its impact on both emerging and developed economies. After 2016, recession risks start to rise considerably.

Overall, globally downside risks continue to persist, reflecting global headwinds and geo-political uncertainty.

In India, delayed monsoon could pose challenges for rural growth. Uncertainties surrounding inflation path still remains (emanating from likely upturn in commodity prices, especially oil).

Industry specific

The Indian commercial vehicle industry has strong correlation with the agricultural growth, infrastructure development, the mining industry and is cyclical.

Competition has increased in the Indian market due to entry of new players and expansion plans of existing ones. The Company is aware of the increasing competition and is taking customer focused measures to remain competitive in the market place.

As no major economic recovery in China is expected, international prices of aluminum is expected to remain at levels witnessed in FY 2015-16.

Forex

With significant exports, import of raw materials and capital goods and foreign currency liabilities, the Company is always exposed to currency fluctuations. The Company has a well-defined forex hedging policy to mitigate the risks.

Contractual

The stipulation and requirements of the automobile industry demands high quality products. Robust quality management systems meeting international standards like TS 16949 are in place to ensure excellent product quality. However, appropriate recall and product liability insurance in line with standard industry practice have been taken.

Just-in-time delivery is another important contractual obligation. Robust quality and project management systems are in place to avoid delay in deliveries due to quality issues or project implementation.

Capacity utilization

The Company adds capacity to meet the projected demand of customers. The Company closely monitors the progress of customer projects / volumes and appropriately deploys the assets to protect from both underutilization and capacity shortages to meet the demand.

Risk Management Policy

The Board has established a Risk Management Policy which formalizes the Company''s approach to overview and manage material business risks. The policy is implemented through a top down and bottom up approach identifying, assessing, monitoring and managing key risks across the Company''s business units.

Risks and effectiveness of their management are internally reviewed and reported regularly to the Board. The Management has reported to the Board that the Company''s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

The board is satisfied that there are adequate systems and procedures in place to identify, assess, monitor and manage risks. The Audit Committee also reviews reports by members of the management team and recommends suitable action. Risk Mitigation Policy has been approved by the board.

V. Internal control systems and their adequacy

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded. Information provided to management is reliable and timely. Company ensures adherence to all statutes.

Internal Financial Controls

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

VI. Operations Review

A. Manufacturing

The Company has been using Total Quality Management (TQM) as the foundation of its management. The Company implemented the best practices like Total Productivity Management (TPM) and Lean Manufacturing in its manufacturing facilities. It also has in place best-in- class practices for safety, pollution control, work environment, water and energy conservation.

Continuous improvement projects are implemented to improve the product quality and productivity in all the manufacturing locations. The Company''s journey of achieving manufacturing excellence was recognized and rewarded by the following customers during FY 2015-16.

- Hyundai - Award for disaster management

- Cummins - Best supplier - Six Sigma category

- Daimler - Special award for globally competitive supplies

- DAF-PACCAR - Certificate of honor for excellent PPM

B. Quality

Achieving customer delight by consistently providing products of excellent quality is the prime motto of the Company. This is achieved through state-of-art technology, training, effective quality system, continuous improvement and total employee involvement.

Poka-yokes, process audits, use of statistical tools for process optimization and online process controls also contribute towards improving and achieving consistency in product quality. The quality system is certified for ISO/ TS 16949 requirements.

TQM is a way of life in the Company. 100% employee involvement has been successfully achieved for many years.

Employees have completed 733 projects by applying statistical tools through Quality Control Circles (QCC) in 2015-16. The average number of suggestions implemented per employee was 42.

C. Cost Management

Cost management is a continuous journey and the Company manages the same through deployment of costs across all departments. A cross functional team is working on projects focussed on Value Added / Value Engineering (VA/VE) and operational efficiency. TPM and lean initiatives are deployed Company-wide to achieve reduction in manufacturing cost.

D. Information Technology

The Company uses ERP system that integrates all business processes across the Company. Suppliers and customers are also integrated into the system for better planning and execution. During the year, several dashboards were added to improve the productivity, quality and reduce the cost of operations. Projects were also implemented to further enhance the Information Security.

VII. Human Resource Development

The Company considers employees as vital and most valuable assets. Human Resource Development (HRD) is aligned to business needs to enhance business performance and results. HRD is practised through an overall HRD framework with its constituents as resourcing, employee engagement, performance & compensation management, competency based development, career & succession planning and organization development. Each of these constituent has a structured approach and process to deliver.

As a part of the long term strategies of the Company, collaborative education program has been initiated with three reputed institutes to develop role-ready engineers with Company-specific knowledge at the entry level.

Career development workshop is conducted to identify high potential employees. Such employees are groomed for taking up higher responsibilities. A reward and recognition system is in place to motivate and also provide fast track growth for the high potential employees.

Our engineers and executives are sponsored for advanced study offered by both Indian and foreign institutions. Customized technical and leadership competency improvement programs are developed and delivered through reputed institutions.

The Company continuously measures and reports employee engagement every year and identifies improvement areas to work on.

An excellent industrial relations environment continues to prevail at all the manufacturing units of the Company.

As on 31st March 2016, the Company had around 2,255 employees on its rolls.

VIII. Environment & Safety

The Company is fully committed to the ultimate goal of employee safety. Safety management is integrated with the overall Environment, Health and Safety (EHS).

The Company has been certified under Integrated Management System (IMS) combining ISO 14001 and OHSAS 18001 systems and procedures.

Cautionary statement

Statements in the management discussion and analysis report describing the Company''s objectives, projections, estimates and expectations may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations include, among others, economic conditions affecting demand/supply and price conditions in the domestic and overseas market in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.

5. DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the the Act 2013, with respect to Directors'' Responsibility Statement, it is hereby stated -

i. that in the preparation of annual accounts for the financial year ended 31st March 2016, the applicable Accounting Standards had been followed and that there were no material departures;

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

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

iv. that the directors had prepared the accounts for the financial year ended 31st March 2016 on a "going concern basis";

v. that 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

vi. that 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.

6. CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR activities have already been textured into the Company''s value system through Srinivasan Services Trust (SST), the CSR arm of the Company, established by the group companies in 1996 with the vision of building self-reliant rural community.

Over 20 years of service, SST has played a pivotal role in changing lives of people in rural India by creating self-reliant communities that are models of sustainable development.

The Company is eligible to spend on their ongoing projects / programs, falling within the CSR activities specified under the Act, 2013, as mandated by the Ministry of Corporate Affairs for carrying out the CSR activities.

The Committee formulated and recommended a Corporate Social Responsibility Policy in terms of Section 135 of the Act, 2013, along with a list of projects / programmes to be undertaken for CSR spending in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Based on the recommendation of the CSR Committee, the board has approved the projects / programs carried out as CSR activities by SST, having a track record of more than the prescribed years in undertaking similar programmes / projects.

During the year 2015-16, the Company had spent Rs.47 Lakhs, constituting more than 2% of average net profits, for the immediate past three financial years, towards CSR activities through SST.

Presently, SST is working in 3,449 villages spread across Tamil Nadu, Karnataka, Maharashtra, Himachal Pradesh and Andhra Pradesh covering about 20,90,000 population and 4,63,500 families. Its major focus areas are Economic development, health care, quality education, environment and infrastructure.

Of the 3,449 villages, 2,654 villages (16,72,620 population and 3,67,170 families) have been funded by the Company during the year.

Achievements in 2,654 villages are:

Economic development:

- 2,27,667 families living in these villages have a monthly income of above Rs.15,000/-. They have financial security.

- 1880 farmers groups have been formed with 31,323 members.

- Improved agriculture practices enabled 1,51,862 farmers owning 1,64,124 hectares to increase the yields than the state average by 15%.

- 1,36,050 families earn more than Rs 3,500/- per month through livestock.

Women empowerment:

- Formed 7,064 Self Help Groups. These groups have 1,06,720 women as members.

- Of the 1,06,720 members, 99,170 members are in income generation activities. They earn a minimum income of Rs. 2,500/- per month.

Health care:

- 60,512 children in the age group below 5 are not malnourished.

- 2,75,970 women are freed from anemia.

- 2,32,436 households made access to toilet facilities.

- The morbidity percentage reduced from 9% to 5%.

- Enrolment in anganwadis increased from 86% to 100% and attendance is 99%.

- 1,073 anganwadis have met all the Integrated Child Development Services Scheme (ICDS) standards.

- 88% involvement of mother volunteers in the functioning of anganwadis. They volunteer their time to ensure proper functioning.

Quality education:

- 100% enrolment of children in schools. There are no drop outs in the schools.

- Number of percentage of slow learners reduced in schools from 27% to 14%.

- Out of 1,204 schools, 807 schools are now model schools.

- 73,345 illiterate women out of 1,18,872 have been made literates.

Environment and Infrastructure:

- 2,14,120 households dispose solid waste through individual and common compost pits. 82 tons of vermi compost generated per month from wastes.

- Sewage water from 2,18,234 households disposed through soak pits, kitchen gardens and drain.

- Safe drinking water is available to 2,137 villages.

Community takes care of their development needs. 5,302 social leaders are active in this effort.

As required under Section 135 of the Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the annual report on CSR containing the particulars of the projects / programmes approved and recommended by CSR Committee and approved by the board for the financial year 2015-16 are given by way of Annexure IV attached to this Report.

7. FINANCIAL PERFORMANCE & POSITION OF SUBSIDIARIES & ASSOCIATE COMPANIES

The following are the subsidiaries and associates of the Company:

Name of the Company Status

TVS Motor Company Limited Subsidiaries of

Sundaram-Clayton (USA) Limited Sundaram-Clayton Limited

Sundaram Auto Components Limited

TVS Housing Limited

TVS Motor Company (Europe) B.V.

TVS Motor (Singapore) Pte. Limited Subsidiaries of

PT. TVS Motor Company Indonesia TVS Motor Company Limited

Sundaram Business Development

Consulting (Shanghai) Company Limited

Sundaram Holding USA Inc. Subsidiary of Sundaram Auto Components Limited

TVS Training and Services Limited

Sundram Non-Conventional Energy Associates of Systems Limited Sundaram-Clayton Limited

Emerald Haven Realty Limited

SUBSIDIARIES

TVS Motor Company Limited (TVSM)

TVS Motor Company Limited is engaged in the business of manufacture of two and three wheelers. During the year 2015-16, TVSM achieved a turnover of Rs. 11,295 Cr and earned a profit after tax of Rs. 432 Cr during the year 2015-16.

TVSM declared a first interim dividend of Re.1/- per share (100%) for the year 2015-16 absorbing a sum of Rs. 55.65 Cr including dividend distribution tax. It also declared a second interim dividend of Rs. 1.50 per share (150%) for the year 2015-16 absorbing a sum of Rs. 85.07 Cr including dividend distribution tax.

Hence, the total amount of both dividends for the year ended 31st March 2016 aggregated to Rs.2.50 per share (250%) on 47,50,87,114 equity shares of Re.1/- each.

Sundaram-Clayton (USA) Limited

Sundaram-Clayton (USA) Limited, a wholly owned subsidiary of the Company is engaged in the business of providing Professional Employer Organisation ("PEO") services to the employees of the Company. The Company earned revenue of USD 10,137 and net income after adjustment of expenses amounted to USD 319 for the year ended 31st March 2016.

Sundaram Auto Components Limited (SACL)

During the year, SACL, a wholly owned subsidiary of TVSM, achieved a turnover of Rs.2737 Cr including Rs.491 Cr in Plastics Component business. SACL earned a profit after tax of Rs.28.64 Cr during the year 2015-16.

SACL increased its customer base by addition of new customers for manufacture of cluster components and heating, ventilating and air-conditioning parts.

SACL productionized 314 new parts for various customers.

SACL received the following awards:

- "Outstanding Supplier for achieving Delivery Target" from TOYODA GOSEI

- "Q1" certification from FORD India

- "SQ mark" certification from Hyundai Motors India Ltd.

- "Best Supplier Kaizen award" from India Japan Lighting Pvt. Ltd.

SACL on 24th December, 2015, declared a first interim dividend of Rs.4.00 per share (40%) for the year 2015-16 absorbing a sum of Rs.5.56 Cr including dividend distribution tax.

SACL again on 7th March, 2016 declared a second interim dividend of Rs.3.00 per share (30%) for the year 2015-16 absorbing a sum of Rs.4.18 Cr including dividend distribution tax.

Hence, the total amount of both dividends paid for the year ended 31st March, 2016 aggregates to Rs.7.00 per share (70%) thereby absorbing a sum of Rs.9.74 Cr, including dividend distribution tax.

TVS Housing Limited (TVSH) - Subsidiary / Emerald Haven Realty Limited (EHRL) - Associate

EHRL is the developer of the Nedungundram, Chennai project of TVSH. Phase 1 was developed as apartments and Phase 2 was launched as villas and row houses. As of 31st March 2016, all the 448 apartments have been sold and customers have taken possession of the apartment. Despite the tough real estate market condition in Chennai, the response for the villa and row house have been quite good. As the phase 2 is nearing completion, the Company has already sold about 90% of the units. The Company is confident that the remaining units would be sold during 2016-17.

PT. TVS Motor Company Indonesia (PT. TVSM)

During 2015-16, motorcycle industry in Indonesia declined by 12% (from 7.6 million units in 2014-15 to 6.6 million units in 2015-16). The decline was mainly due to lower economic growth and weak consumer sentiments due to subdued commodity prices and further tightening of credit. While the bebek segment declined by 33%, sports motorcycle segment went down by 23%. The scooter category marginally declined by 5%. Within 2 wheelers, the scooter segment continued to dominate with a category share of 75%.

During the year, PT. TVSM launched the 110 cc Dazz scooter with Fuel Injection System in Indonesian market. It also launched the new Apache 200 cc sports motorcycle. PT. TVSM continued its focus on exports to ASEAN and African countries. PT. TVSM commenced its exports to Latin American market by entering Colombia.

The decline in two wheeler industry resulted in lower domestic sales during 2015-16. PT. TVSM sold total of 17,100 vehicles as against 23,300 vehicles sold in the previous year. However, the focus on ASEAN and African markets helped PT. TVSM to export 15,000 no''s, registering an increase of 4% over the previous year. The EBITDA loss for the year of 6.8 Mn USD is marginally lower than EBITDA loss of 7.7 Mn USD OF 2014-15. Focus during 2016-17 will be to build on the portfolio and substantially reduce the EBITDA loss.

TVS Motor Company (Europe) B.V & TVS Motor (Singapore) Pte. Limited

TVSM had earlier incorporated both these entities with a view to serve as special purpose vehicles for making and protecting the investments made in overseas operations of PT. TVSM.

Sundaram Business Development Consulting (Shanghai) Company Limited (SBDC)

SBDC was initially established to explore options of sourcing auto components and local assembly of two wheelers etc., in China. After a complete review, board felt that it may not be viable to carry out manufacturing activities in China and therefore steps were taken for closure of operations of SBDC. All required formalities were completed in April 2016. Hence in the books a provision of Rs.1.07 Cr has been made for diminution in the value of investments.

Sundaram Holding USA Inc.,

The Company made an investment of USD 250 consisting of 250 shares with face value of USD 1 each in Sundaram Holding USA Inc., (SHUI) constituting 25% of its paid up share capital. SHUI was incorporated under the applicable provisions of laws of United States of America for carrying out the business of the Company in USA.

SACL, another subsidiary of the Company has also invested USD 750 consisting of 750 shares with face value of USD 1 each in SHUI constituting 75% of its paid up share capital.

Hence, SHUI became the subsidiary of SACL effective 9th September 2015, and thereby the subsidiary of the Company by virtue of the provisions of Section 2(87) of the Act, 2013.

ASSOCIATES

TVS Training and Services Limited (TVS TSL)

TVS TSL is engaged in the business of establishing and providing vocational training services to various industries and is participating in the National Skill Development Projects. During the year the Company earned an income of Rs. 12.65 Cr and profit after tax for the year ended 31st March 2016 was Rs.0.36 Cr.

Sundram Non-Conventional Energy Systems Limited (SNCES)

SNCES is engaged in the business of generation of power. During the year the Company earned revenue of Rs. 2.71 Cr and profit after tax was Rs.1.41 Cr.

Financial position of all subsidiaries and associate companies are provided as part of consolidated financial statements in Form AOC-1 in the manner required under Section 129 read with the Companies (Accounts) Rules, 2014 of the Act, 2013.

8. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of the Act, 2013 read with the Companies (Accounts) Rules, 2014 and Regulation 33 of SEBI (LODR) Regulations, 2015 along with a separate statement containing the salient features of the financial performance of subsidiaries / associates, in the prescribed form. The audited consolidated financial statements together with auditor''s report forms part of the Annual Report.

The audited financial statements in respect of each of its subsidiary companies will be made available to the shareholders, on receipt of a request from any shareholder of the Company and it has also been placed on the website of the Company. This will also be available for inspection by the shareholders at the registered office during the business hours.

The consolidated profit after tax of the Company and its subsidiaries & associates amounted to Rs. 408.24 Cr for the financial year 2015-16 as compared to Rs. 345.19 Cr in the previous year.

9. DIRECTORS & KEY MANAGERIAL PERSONNEL

Independent Directors (IDs)

At the annual general meeting held on 21st August 2014, M/s. Vice Admiral P J Jacob (Retd.), V Subramanian, S Santhanakrishnan, R Vijayaraghavan and Kamlesh Gandhi, were appointed as IDs for the first term of five consecutive years from the conclusion of the fifty second AGM , not liable to retire by rotation, and to receive remuneration by way of fees, reimbursement of expenses for participation in the meetings of the board and / or committees and profit related commission in terms of applicable provisions of the Act 2013, within the overall limit, as determined by the board from time to time.

On appointment, each ID has acknowledged the terms of appointment as set out in their letters of appointment. The appointment letter covers, interalia, the terms of appointment, duties, remuneration and expenses, rights of access to information, other directorships, dealing in Company''s shares, disclosure of Director''s interests, insurance and indemnity. The IDs are provided with copies of the Company''s policies and charters of various committees of the board.

Mr Suresh Kumar Sharma, an independent director of the Company, ceased to be a director of the Company with effect from 23rd March 2016, due to his sad and untimely demise. The board placed on record its appreciation for the outstanding contribution made by Mr Suresh Kumar Sharma during his tenure as director of the Company.

As required under the provisions of Companies Act, 2013, the board proposed the appointment of Mr R Gopalan as Non-executive Independent director for approval of shareholders through process of postal ballot.

In accordance with Section 149(7) of the Act, 2013, all IDs have declared that they met the criteria of independence as provided under Section 149(6) of the Act, 2013.

The detailed terms of appointment of IDs is disclosed on the Company''s website in the following link http://www.sundaram-clayton.com/ Web%20files/Terms%20of%20IDs.pdf.

Separate meeting of Independent Directors (IDs)

The IDs were fully kept informed of the Company''s activities in all its spheres. During the year under review, a separate meeting of IDs was held on 14th March, 2016 and the IDs reviewed the performance of:

(i) non-IDs viz., M/s Venu Srinivasan, Chairman and Managing Director, Dr. Lakshmi Venu and Sudarshan Venu, Joint Managing Directors, K Mahesh, T K Balaji and Gopal Srinivasan, Directors; and

(ii) the board as a whole.

They also reviewed the performance of Chairman after taking into account the views of Executive and Non-Executive Directors.

They also assessed the quality, quantity and timeliness of flow of information between the Company''s Management and the Board that are necessary for the Board to effectively and reasonably perform their duties. All the IDs were present at the meeting.

Woman director

In terms of Section 149 of the Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and Regulation 17 of SEBI (LODR) Regulations, 2015, the Company is required to have a woman director on its board.

Dr Lakshmi Venu, joint managing director, is already on the board of the Company as a director from 22nd March, 2010 and hence, the Company fulfills the requirement of the Act, 2013 and SEBI (LODR) Regulations, 2015 regarding the appointment of woman director on the board of the Company.

Non-executive and non-independent directors (NE-NIDs)

In terms of the provisions of sub-section (6) read with explanation to Section 152 of the Act 2013, two thirds of the total number of directors i.e., excluding IDs, are liable to retire by rotation and out of which, one third are liable to retire by rotation at every AGM.

Mr Gopal Srinivasan and Mr T K Balaji, directors are liable to retire by rotation, at the AGM, and being eligible, offer themselves for re-appointment.

The directors, therefore, recommend their re-appointment as directors of the Company.

Key Managerial Personnel (KMP)

In terms of Section 2(51) and Section 203 of the Act, 2013, Mr Venu Srinivasan, Chairman and Managing Director, Dr. Lakshmi Venu, Joint Managing Director, Mr C N Prasad, President & Chief Executive Officer, Mr V N Venkatanathan, Chief Financial Officer and Mr R Raja Prakash, Company Secretary are KMP of the Company.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee of Directors (NRC) reviews the composition of the board, to ensure that there is an appropriate mix of abilities, experience and diversity to serve the interests of all shareholders and the Company.

In accordance with the requirements under Section 178 of the Act, 2013, Nomination and Remuneration Policy was formulated to govern the terms of nomination / appointment and remuneration of (i) Directors, (ii) KMP and (iii) Senior Management Personnel (SMP) of the Company. The same was approved by the board at its meeting held on 24th September 2014. There is no change in the policy during the year under review.

The NRC also reviews succession planning of both SMP and board. The Company''s approach in recent years is to have a greater component of performance linked remuneration for SMP.

The process of appointing a director / KMP / SMP is, that when a vacancy arises, or is expected, the NRC will identify, ascertain the integrity, qualification, appropriate expertise and experience, having regard to the skills that the candidate will bring to the Board / Company, and the balance of skills added to that of which the existing members hold.

The NRC will review the profile of persons and the most suitable person is either recommended for appointment by the board or is recommended to shareholders for their election. The NRC has discretion to decide whether qualification, expertise and experience possessed by a person are sufficient / satisfactory for the concerned position.

The NRC will ensure that any person(s) who is / are appointed or continues in the employment of the Company as its executive chairman, managing director, whole-time director shall comply with the conditions as laid out under Part I of Schedule V to the Act 2013. The NRC will ensure that any appointment of a person as an independent Director of the Company will be made in accordance with the provisions of Section 149 read with Schedule IV to the Act, 2013 alongwith any other applicable provisions and SEBI (LODR) Regulations, 2015.

Criteria for performance evaluation, disclosures on the remuneration of directors, criteria of making payments to non-executive directors have been disclosed as part of Corporate Governance Report attached herewith.

Evaluation of the board, committees and directors

In terms of Section 134 of the Act 2013 and the Corporate Governance requirements as prescribed under SEBI (LODR) Regulations, 2015, the board reviewed and evaluated its own performance from the perspectives of Company''s performance, strategy and implementation, risk management and corporate ethics, based on the evaluation criteria laid down by the NRC.

Board

The board discussed and assessed its own composition, size, mix of skills and experience, its meeting sequence, effectiveness of discussion, decision making, follow up action, quality of information and the performance and reporting by the Committees viz., Audit Committee, NRC, Stakeholders Relationship Committee (SRC) and Corporate Social Responsibility Committee (CSR).

The board upon evaluation concluded that it is well balanced in terms of diversity of experience encompassing all the activities of the Company. The Company endeavours to have a diverse board representing a range of experience at policy-making levels in business and technology, and in areas that are relevant to the Company''s global activities.

The board also noted that corporate responsibility, ethics and compliance are taken seriously, and there is a good balance between the core values of the Company and the interests of stakeholders. The board satisfied with the Company''s performance in all fronts viz., new product development, operations, sales and marketing, finance management, international business, employee relations and compliance with statutory / regulatory requirements and finally concluded that the board operates effectively and is closely aligned to the culture of the business.

Directors

The performance of individual directors including all Independent Directors are assessed against a range of criteria such as contribution to the development of business strategy and performance of the Company, understanding the major risks affecting the Company, clear direction to the management and contribution to the board cohesion. The performance evaluation has been done by the entire board of directors, except the director concerned being evaluated.

The board noted that all directors have understood the opportunities and risks to the Company''s strategy and are supportive of the direction articulated by the management team towards consistent improvement.

Committees

The performance of each committee was evaluated by the board after seeking inputs from its members on the basis of the criteria such as matters assessed against terms of reference, time spent by the committees in considering matters, quality of information received, work of each committee, overall effectiveness and decision making and compliance with the corporate governance requirements and concluded that all the committees continued to function effectively, with full participation by all its members and the members of executive management of the Company.

The board reviewed each committee''s terms of reference to ensure that the Company''s existing practices remain appropriate. Recommendations from each committee are considered and approved by the board prior to implementation.

Number of board meetings held

The number of board meetings held during the financial year 2015-16 are provided as part of Corporate Governance Report prepared in terms of the SEBI (LODR) Regulations 2015.

10. AUDITORS

Statutory Auditors

The Company at its AGM held on 21st August 2014 appointed M/s Sundaram & Srinivasan, Chartered Accountants, Chennai, having Firm Registration No. 004207S allotted by The Institute of Chartered Accountants of India, as statutory auditors of the Company to hold office, for the transitional period of three consecutive years from the conclusion of the said AGM, subject to ratification at every AGM, at such remuneration in addition to all applicable taxes, out of pocket expenses, travelling and other expenses as may be mutually agreed between the Board and the Auditors.

The Auditors'' Reports for the financial year 2015-16 does not contain any qualification, reservation or adverse remark and the same is attached with the annual report.

It is therefore proposed to re-appoint them as statutory auditors for the last year in the transitional period of three consecutive years, from the conclusion of this AGM, subject to ratification by the members at the AGM.

The Company has obtained necessary certificate under Section 141 of the Act 2013 conveying their eligibility for being statutory auditors of the Company for the year 2016-17.

Cost Auditor

As per Section 148 of the Act, 2013, read with the Companies (Cost Records and Audit) Rules 2014, as amended, the cost audit records maintained by the Company in respect of its engine parts, manufactured by the Company specified under Central Excise Tariff Act heading in Table B to Rule 3 of the above rules, are required to be audited by a Cost Auditor.

In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the board, subject to the approval of the Central Government, has re-appointed Mr A N Raman, Cost Accountant holding Certificate of practice No. 5359 allotted by The Institute of Cost Accountants of India, as a Cost Auditor for conducting Cost Audit for the financial year 2016-17.

The Company has also received necessary certificate under Section 141 of the Act 2013 from him conveying his eligibility. A sum of Rs 3.00 lakhs has been fixed by the board as remuneration in addition to reimbursement of all applicable taxes, travelling and out-of-pocket expenses payable to him for the financial year 2016 -17 and is also required to be ratified by the members at the ensuing general meeting as per Section 148(3) of the Act 2013.

Secretarial Auditor

As per Section 204 of the Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company is required to appoint a Secretarial Auditor for auditing secretarial and related records of the Company.

The Secretarial Audit Report for the year 2015-16, given by Ms B Chandra, Practising Company Secretary, Chennai for auditing the secretarial and related records is attached to this report. The Secretarial Audit Report does not contain any qualification, reservation or other remarks.

Ms B Chandra, Practising Company Secretary, Chennai, was re- appointed as Secretarial Auditors for carrying out the secretarial audit for the financial year 2016-17.

11. CORPORATE GOVERNANCE

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

A separate section on Corporate Governance and a certificate from the statutory auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (LODR) Regulations, 2015, forms part of this Annual Report.

The chairman and managing director and the chief financial officer of the Company have certified to the board on financial statements and other matters in accordance with Regulation 17 (8) of the SEBI (LODR) Regulations 2015 pertaining to CEO/CFO certification for the financial year ended 31st March 2016.

12. POLICY ON VIGIL MECHANISM

The Company has adopted a Policy on Vigil Mechanism in accordance with the provisions of Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations 2015, which provides a formal mechanism for all directors, employees and other stakeholders of the Company to report to the management, their genuine concerns or grievances about unethical behaviour, actual or suspected fraud and any violation of the Company''s Code of conduct or ethics policy.

The policy also provides a direct access to the Chairperson of the Audit Committee to make protective disclosures to the management about grievances or violation of the Company''s Code of Conduct.

The policy is disclosed on the Company''s website in the following link http://www.sundaram-clayton.com/Web%20files/Investors/Whistle% 20Blower%20Policy.pdf.

13. PUBLIC DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Section 76 of the Act, 2013, for the year ended 31st March 2016.

14. STATUTORY STATEMENTS

Information on conservation of energy, technology absorption, foreign exchange, etc.,

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure I to this report, in terms of the requirements of Section 134(3)(m) of the Act, 2013, read with the Companies (Accounts) Rules 2014.

Material changes and commitments

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

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

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

Annual Return

Extract of Annual Return in the prescribed form is given as Annexure II to this report, in terms of the requirement of Section 134(3)(a) of Act, 2013, read with the Companies (Accounts) Rules, 2014.

Employee''s remuneration

Details of employees receiving the remuneration in excess of the limits prescribed under Section 197 of the Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure III. In terms of first proviso to Section 136(1) of the Act, 2013, the Annual Report, excluding the aforesaid annexure is being sent to the shareholders of the Company. The annexure is available for inspection at the Registered Office of the Company during business hours and any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

Comparative analysis of remuneration paid

A comparative analysis of remuneration paid to Directors and employees with the Company''s performance is given as Annexure V to this report.

Details of related party transactions

There were no material related party transactions under Section 188 of the Act 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

Details of loans / guarantees / investments made

During the year under review, the Company had not granted any loans or guarantees covered under Section 186 of the Act 2013.

Please refer note Number IX to Notes on accounts for the financial year 2015-16, for details of investments made by the Company

Other laws

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

15. ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co-operation received from the promoters of the Company, viz., T V Sundram Iyengar & Sons Private Limited, Southern Roadways Limited, Sundaram Industries Private Limited and Sundaram Finance Limited.

The directors thank the vehicle manufacturers, vendors and bankers for their continued support and assistance.

The directors wish to place on record their appreciation of the continued excellent work done by all the employees of the Company during the year.

The directors specially thank the shareholders for their continued faith in the Company.

For and on behalf of the board

Chennai VENU SRINIVASAN

12th May 2016 Chairman

---

Mar 31, 2015

Dear Members,

The directors have pleasure in presenting the fifty third annual report and the audited accounts for the year ended 31st March 2015.

1. FINANCIAL HIGHLIGHTS

(Rs. in Cr)

Details Year ended Year ended 31.03.2015 31.03.2014

Sales and other income 1,401.11 1,232.54

Profit before finance cost and depreciation 178.05 143.82

Less: Finance Cost 36.88 35.65

Depreciation 59.82 53.21

Profit after finance cost and depreciation 81.35 54.96

Add : Exceptional Item (Income) 3.06 5.83

Profit before tax 84.41 60.79

Less: Provision for :

Income tax 9.50 5.50

Deferred tax 3.75 1.63

Profit after tax 71.16 53.66

Surplus brought forward from

previous year 77.63 68.49

Total 148.79 122.15

Appropriations:

First interim dividend paid 18.21 18.21

Second interim dividend paid 8.09 7.59

Third interim dividend payable 12.14 13.15

Dividend tax paid - 0.20

Transfer to general reserve 7.12 5.37

Balance carried to Balance Sheet 103.23 77.63

Total 148.79 122.15

2. DIVIDEND

The board of directors (the board) at their meeting held on 4th February 2015, declared a first interim dividend of Rs.9.00 per share (180%) absorbing a sum of Rs.18.21 Cr for the year 2014-15 and the same was paid to the shareholders on 14th February 2015.

The board at its meeting held on 20th March 2015, declared a second interim dividend of Rs.4 per share (80%) absorbing a sum of Rs. 8.09 Cr for the year 2014-15 and the same was paid to the shareholders on 30th March 2015.

The board, at its meeting held on 8th May 2015, declared a third interim dividend of Rs. 6 per share (120%) for the year 2014-15 absorbing a sum of Rs 12.14 Cr. The same will be paid to the shareholders on or after 18th May 2015.

Hence, the total amount of dividend including the third interim dividend payable, for the year ended 31st March 2015 will aggregate to Rs.19 per share (380%) on 2,02,32,085 equity shares of Rs. 5/- each.

The Company has set-off its dividend distribution tax payable under Section 115-O(1A) of the Income Tax Act, 1961 against the dividend distribution tax paid by one of its subsidiary companies on the dividend declared.

The board does not recommend any further dividend for the year under consideration.

3. PERFORMANCE

During the year 2014-15, Gross Domestic Product (GDP) registered a growth rate of 7.4% as against the 6.9% achieved in 2013-14 (Source: RBI). The Indian auto industry also has posted growth of 8.3% (Source: SIAM).

During 2014, GDP estimates in US increased to 2.4% as against 2.2% in 2013 (Source: World Bank) and Europe's GDP estimates at 0.8% in 2014 as against -0.4% in 2013 (Source: World Bank).

In this background, North American class 8 truck segment grew by 14% (Source: FTR), while, the sale of European medium and heavy trucks declined by 6% (Source: ACEA)

The following table highlights the performance of the Company during 2014-15:

Particulars 2014-15 2013-14 Variance (in %)

Sales (Tonnage) 44065 39505 12

Sale of goods (Rs. in Cr) 1257.6 1143.8 10

Domestic sales (Rs. in Cr) 726.7 573.9 27

Export sales (Rs. in Cr) 530.9 569.9 -7

Profit before Tax (Rs. in Cr) 84.4 60.8 39

5. DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(3)(c) read with 134(5) of the Act 2013, with respect to Directors' Responsibility Statement, it is hereby stated -

i. that in the preparation of annual accounts for the financial year ended 31st March 2015, the applicable Accounting Standards had been followed and that there were no material departures;

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

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

iv. that the directors had prepared the accounts for the financial year ended 31st March 2015 on a "going concern basis."

v. that 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

vi. 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.

6. CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR activities have already been textured into the Company's value system through Srinivasan Services Trust (SST), established by the group companies in 1996 with the vision of building self-reliant rural community.

SST, the CSR arm of the Company, with the vision of building self-reliant rural communities, was established in 1996. Over 19 years of service, SST has played a pivotal role in changing lives of people in many villages in rural India by creating self-reliant communities that are models of sustainable development.

The Company is therefore eligible to spend on their ongoing projects / programs, falling within the CSR activities specified under the Act 2013, as mandated by the Ministry of Corporate Affairs (MCA) for carrying out the CSR activities and also projects undertaken by other non-profitable organizations having a track record of more than the prescribed years in undertaking similar projects and programmes.

The CSR Committee of directors of the Company formulated and recommended a Corporate Social Responsibility policy in terms of Section 135 of the Act 2013 along with a list of projects / programmes to be undertaken for CSR spending in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Based on the recommendation of the CSR Committee, the board has approved the projects / programs carried out as CSR activities by the following non-profitable organizations having a track record of more than the prescribed years in undertaking similar programmes / projects, for CSR spending not less than 2% of average net profits, made during the immediately preceding three financial years, for the current financial year 2014-2015.

Amount spent S. No. Name of the Trust (Rs. in Lakhs)

1. Sri Sathya Sai Lokaseva Trust 10.00

2. Sri Sathya Sai Central Trust 15.00

3. Andhra Pradesh Chief Minister's Relief Fund 11.00

Total 36.00

As required under Section 135 of the Act 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the annual report on CSR activities containing the particulars of the projects / programmes approved and recommended by CSR Committee and approved by the board are given by way of Annexure IV attached to this Report.

7. FINANCIAL PERFORMANCE & POSITION OF SUBSIDIARIES & ASSOCIATE COMPANIES

The following are the subsidiaries and associates of the Company:

Name of the Company Status

Sundaram-Clayton (USA) Limited Subsidiaries of TVS Motor Company Limited Sundaram-Clayton Limited

Sundaram Auto Components Limited TVS Housing Limited TVS Motor Company (Europe) B.V. TVS Motor (Singapore) Pte. Limited Subsidiaries of PT. TVS Motor Company Indonesia TVS Motor Company Limited Sundaram Business Development Consulting (Shanghai) Company Limited

TVS Training and Services Limited Sundram Non-Conventional Energy Associates of Systems Limited Sundaram-Clayton Limited Emerald Haven Realty Limited

Subsidiaries of the Company

Sundaram - Clayton (USA) Limited

Sundaram-Clayton (USA) Limited, a wholly subsidiary of the Company is engaged in the business of providing Professional Employer Organization ("PEO") services to the employees of the Company. The Company earned a revenue of USD 6,598 and net income after adjustment of expenses amounted to USD 263 for the year ended 31st March 2015.

TVS Motor Company Limited (TVSM)

TVS Motor Company Limited (TVSM), a listed company, is engaged in the business of manufacture of two and three wheelers. During the year, TVSM achieved a turnover of Rs. 10130.83 Cr and earned a profit after tax of Rs. 347.83 Cr during the year 2014-15.

TVSM declared first interim dividend of Re.0.75 per share (75%) for the year 2014-15 absorbing a sum of Rs. 41.95 Cr including dividend distribution tax. It also declared a second interim dividend of Rs.1.15 per share (115%) for the year 2014-15 absorbing a sum of Rs.65.56 Cr including dividend distribution tax.

Hence, the total amount of dividend including the second interim dividend for the year ended 31st March 2015 will aggregate to Rs.1.90 per share (190%) on 47,50,87,114 equity shares of Re.1/- each.

Sundaram Auto Components Limited (SACL)

During the year, SACL, a wholly owned subsidiary of TVSM, has achieved a turnover of Rs.415 Cr in Plastics component business and earned a profit after tax of Rs.25.32 Cr.

SACL was awarded the best supplier "System Rating" by Visteon CCS for the year 2014-15. During the year, SACL secured new businesses for manufacture of exterior painted parts and assemblies, safety critical air bag cover parts, interior assemblies and Heating, Ventilating and Air-Conditioning (HVAC) parts. During the year, SACL productionized 140 new parts for various customers.

SACL on 28th January, 2015, declared an interim dividend of Rs.3.50 per share (35%) for the year 2014-15 absorbing a sum of Rs.485.10 lakhs including dividend distribution tax.

SACL on 23rd April, 2015 recommended a final dividend of Rs.2.50 per share (25%) for the year 2014-15, for approval of shareholders, absorbing a sum of Rs.346.49 lakhs including dividend distribution tax.

Hence, the total amount of dividend including the final dividend recommended, for the year ended 31st March, 2015 will aggregate to Rs.6 per share (60%) on 1,15,50,000 equity shares of Rs.10/- each absorbing a sum of Rs.831.59 lakhs including dividend distribution tax.

TVS Housing Limited (TVSH) & Emerald Haven Realty Limited (EHRL)

TVSH, a wholly owned subsidiary of TVSM, and EHRL an associate of TVSM, in terms of the arrangement entered into between them launched Phase I of development at its land at Nedungundram, Chennai and is successfully nearing completion. Similarly, Phase II of the development at Nedungundram (Project Green Hills - Villas) successfully launched during the year.

PT.TVS Motor Company Indonesia (PT TVS)

During the year, motorcycle industry in Indonesia declined by 3%. The decline was more pronounced in the last quarter of the financial year when the industry plunged by 17% due to weak consumer sentiments arising out of poor commodity prices and the credit squeeze on hire purchase. The scooter category grew by 6% triggered by new product launches to end the year with a share of 70%. The sports motorcycle category and bebek category declined by 10% and 25% respectively.

PT TVS, a wholly owned subsidiary of TVSM, introduced two variants of 125cc sports motorcycle designed for specific customer segment during the later part of the year. During 2014-15, PT TVS sold 23,300 vehicles as against 19,200 vehicles sold during 2013-14, thereby registering a growth of 21%. While the domestic sales remained flat, exports grew by 40%. PT TVS continued its focus on exports and exported more than 14,000 units to ASEAN, Middle East and African countries.

During 2014-15, the loss at EBITDA level was marginally lower at USD 8 Mn compared to loss of USD 9 Mn recorded during 2013-14. During 2015-16, PT TVS plans to launch a new 200cc sports motorcycle and a new variant of its 110cc Dazz scooter with fuel injection system.

During the year under review, TVSM has made an additional investment of USD 4 Mn in 4,00,000 ordinary shares of USD 10 each (Rs.24.92 Cr) in PT TVS, to meet its fund requirements.

TVS Motor Company (Europe) B.V & TVS Motor (Singapore) Pte. Ltd

TVSM had earlier incorporated both these entities as its wholly owned subsidiaries, with a view to serve as special purpose vehicles (SPVs) for making and protecting its investments made in the overseas operations of PT TVS.

Considering the change in the evaluation, TVSM has now initiated steps to voluntarily wind up TVSM Europe, subject to such regulatory approvals / consents as may be required, both under Indian / Foreign laws. The other overseas entity viz TVS Motor Singapore Pte. Ltd will continue to hold the investment in PT TVS.

During the year under review, TVSM has made an additional investment of Rs. 2.01 Cr in the ordinary shares of TVS Motor Singapore Pte. Ltd and the shares were allotted in April 2015.

Sundaram Business Development Consulting (Shanghai) Company Limited (SBDC)

SBDC, a wholly owned subsidiary of TVSM was initially established to explore options of sourcing, local assembly of two wheeler etc., in China for TVSM. After a complete review of the proposed activities through SBDC by TVSM, it was advised that local manufacturing operations may not be required in China. Hence, the board of TVSM has decided to retain the "Representative office" in China but to close down the operations of SBDC.

Associates of the Company

TVS Training and Services Limited (TVS TSL)

TVS TSL, an associate of the Company, is engaged in the business of establishing, managing and administering educational and vocational institutions. During the year, TVS TSL earned an income of Rs. 8.42 Cr and loss after adjustment of expenses was Rs. 0.27 Cr.

Sundram Non-Conventional Energy Systems Limited (SNES)

SNES, an associate of the Company, is engaged in the business of generation of power. During the year, it has earned Rs. 2.99 Cr and the profit after tax was Rs. 1.49 Cr.

Financial position of all subsidiaries and associate companies are provided as part of consolidated financial statements in Form AOC-1 in the manner required under Section 129 read with the Companies (Accounts) Rules, 2014, of the Act 2013.

8. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of the Act, 2013 read with the Companies (Accounts) Rules, 2014 and the Listing Agreement with the Stock Exchanges along with a separate statement containing the salient features of the financial performance of subsidiaries / associates.

The audited financial statements in respect of each of its subsidiary companies will be made available to the shareholders, on receipt of a request from any shareholder of the Company and it has also been placed on the website of the Company. This will also be available for inspection by the shareholders at the registered office during the business hours.

9. DIRECTORS & KEY MANAGERIAL PERSONNEL

Independent Directors (IDs)

During the year, M/s. Vice Admiral P J Jacob (Retd.), V Subramanian, S Santhanakrishnan, Suresh Kumar Sharma, R Vijayaraghavan and Kamlesh Gandhi , were appointed as IDs for the first term of five consecutive years from the conclusion of the fifty-second Annual General Meeting and to receive remuneration by way of fees, reimbursement of expenses for participation in the meetings of the board and / or committees and profit related commission in terms of applicable provisions of the Act 2013 within the overall limit approved by the shareholders vide their resolution passed 21st August 2014, at the annual general meeting as determined by the board from time to time in terms of Section 197 and 198 and any other applicable provisions of the Act 2013.

On appointment, each ID has acknowledged the terms of appointment as set out in their letter of appointment. The appointment letter covers, inter alia, the terms of appointment, duties, remuneration and expenses, rights of access to information, other directorships, dealing in Company's shares, disclosure of Director's interests, insurance and indemnity. The IDs are provided with copies of the Company's policies and charters of various committees of the board.

All IDs have declared that they met all the criteria of independence as provided under Section 149(6) of the Act 2013 and Clause 49 of the Listing Agreement. The detailed terms of appointment of IDs are disclosed on the Company's website with following link http:// www.sundaramclayton.com/Web%20files/Terms%20of%20IDs.pdf.

Separate meeting of Independent Directors (IDs)

The IDs were fully kept informed of the Company's activities in all its spheres. During the year under review, a separate meeting of IDs was held on 20th March, 2015 and the IDs reviewed the performance of:

i) non-IDs viz., M/s. Venu Srinivasan, chairman and managing director, Dr Lakshmi Venu and Sudarshan Venu, joint managing directors, K Mahesh, T K Balaji and Gopal Srinivasan, directors; and

ii) the board as a whole.

They reviewed the performance of Chairman after taking into account the views of executive and non-executive directors.

They also assessed the quality, quantity and timeliness of flow of information between the Company's Management and the board that are necessary for the board to effectively and reasonably perform their duties. All the IDs were present at the meeting.

Woman director

In terms of Section 149 of the Act 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and Clause 49 of the Listing Agreement, the Company is required to have a woman Dr Lakshmi Venu, joint managing director is already on the board of the Company from 22nd March, 2010 and hence, the Company fulfills the requirement of Section 149 of the Act 2013.

Non-executive and non-independent directors (NE-Non IDs)

In terms of the provisions of sub-section (6) read with explanation to Section 152 of the Act 2013 two-thirds of the total number of directors

i.e., excluding IDs, are liable to retire by rotation and out of which, one- third are liable to retire by rotation at every annual general meeting.

Mr K Mahesh, director, and Mr Sudarshan Venu, Joint Managing Director who are liable to retire by rotation, at the AGM, and being eligible, offer themselves for re-appointment.

Executive directors

During the year, the board, at its meeting held on 11th September, 2014, based on the recommendation of the NRC, re-designated Dr Lakshmi Venu as joint managing director considering her increased role and responsibility in the management of the Company, subject to the approval of the shareholders at the AGM.

The other terms and conditions of her appointment and remuneration, as earlier approved by the board as well as by the shareholders of the Company on 30th September 2011 and 21st August 2014 would remain unchanged.

During the year, the board, at its meeting held on 11th September, 2014, on the recommendation of the NRC, appointed Mr Sudarshan Venu, as JMD since he was actively involved in all spheres of the management of the Company and handling wider responsibilities for exploring new business opportunities - both in India and abroad subject to the approval of the shareholders at the AGM. The terms and conditions of appointment and remuneration as approved by the board is subject to the approval of the shareholders at the AGM.

Both the NRC and the board observed that the proposed appointment of Mr Sudarshan Venu as JMD also satisfies the requirements of the provisions of sub-section (3) of Section 196 of the Act 2013 and also part I of Schedule V of the Act 2013, dealing with the eligibility for appointment of managing directors.

Mr Sudarshan Venu as JMD of both the subsidiary company, namely TVS Motor Company Limited (TVSM) and the Company, would be entitled to draw remuneration from one or both the companies, provided that the total remuneration drawn from both the companies does not exceed the higher maximum limit admissible from any one of the companies.

Brief resume of directors

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

The directors, therefore, recommend their appointment / re-appointment as directors of the Company.

Key Managerial Personnel (KMPs)

At the board meetings held on 8th May 2014 and 11th September 2014, Mr Venu Srinivasan, CMD, Dr Lakshmi Venu, JMD, Mr Sudarshan Venu JMD, Mr C N Prasad, President & Chief Executive Officer, Mr V N Venkatanathan, Chief Financial Officer and Mr R Raja Prakash, Company Secretary were designated as 'Key Managerial Personnel' of the Company in compliance with the requirement of Section 203 of the Act 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee of Directors (NRC) reviews the composition of the board, to ensure that there is an appropriate mix of abilities, experience and diversity to serve the interests of all shareholders and the Company.

During the year, in accordance with the requirements under Section 178 of the Act 2013 and Clause 49 of Listing Agreement, the NRC formulated a Nomination and Remuneration Policy to govern the terms of nomination / appointment and remuneration of (i) Directors, (ii) Key Managerial Personnel (KMPs) and (iii) Senior Management Personnel (SMPs) of the Company. The same was approved by the board at its meeting held on 24th September 2014. The NRC also reviews succession planning of both SMPs and board. The Company's approach in recent years is to have a greater component of performance linked remuneration for SMPs.

The process of appointing a director / KMPs / SMPs is, that when a vacancy arises, or is expected, the NRC will identify, ascertain the integrity, qualification, appropriate expertise and experience, having regard to the skills that the candidate will bring to the board / company, and the balance of skills added to that of which the existing members hold.

The NRC will review the profile of persons and the most suitable person is either recommended for appointment by the board or is recommended to shareholders for their election. The NRC has discretion to decide whether qualification, expertise and experience possessed by a person are sufficient / satisfactory for the concerned position.

The NRC will ensure that any person(s) who is / are appointed or continues in the employment of the Company as its executive chairman, managing director, whole-time director shall comply with the conditions as laid out under Part I of Schedule V to the Act 2013. The NRC will ensure that any appointment of a person as an independent director of the Company will be made in accordance with the provisions of Section 149 read with Schedule IV of the Act 2013 along with any other applicable provisions and Clause 49 of the Listing Agreement.

Criteria for performance evaluation, disclosures on the remuneration of directors, criteria of making payments to non-executive directors have been disclosed as part of Corporate Governance Report attached herewith.

Evaluation of the board, committees and directors

In terms of Section 134 of the Act 2013 and the Corporate Governance requirements as prescribed under Clause 49 of the Listing Agreement, the board reviewed and evaluated its own performance from the perspectives of Company Performance, Strategy and Implementation, Risk Management, Corporate ethics, based on the evaluation criteria laid down by the NRC.

The board discussed and assessed its own composition, size, mix of skills and experience, its meeting sequence, effectiveness of discussion, decision making, follow up action, quality of information and the performance and reporting by the Committees viz., Audit Committee, Nomination and Remuneration Committee (NRC), Stakeholders Relationship Committee (SRC) and Corporate Social Responsibility Committee (CSR).

The board upon evaluation concluded that it is well balanced in terms of diversity of experience encompassing all the activities of the Company. The Company endeavours to have a diverse board representing a range of experience at policy-making levels in business and technology, and in areas that are relevant to the Company's global activities.

The performance of individual directors including all Independent directors assessed against a range of criteria such as contribution to the development of business strategy and performance of the Company, understanding the major risks affecting the Company, clear direction to the management and contribution to the board cohesion. The performance evaluation has been done by the entire board of directors, except the director concerned being evaluated. The board noted that all directors have understood the opportunities and risks to the Company's strategy and are supportive of the direction articulated by the management team towards consistent improvement.

The board also noted that corporate responsibility, ethics and compliance are taken seriously, and there is a good balance between the core values of the Company and the interests of stakeholders. The board satisfied with the Company's performance in all fronts viz., new product development, operations, sales and marketing, finance management, international business, employee relations and compliance with statutory / regulatory requirements and finally concluded that the board operates effectively and is closely aligned to the culture of the business.

The performance of each committee was evaluated by the board after seeking inputs from its members on the basis of the criteria such as matters assessed against terms of reference, time spent by the committees in considering matters, quality of information received, work of each committee, overall effectiveness and decision making and compliance with the corporate governance requirements and concluded that all the committees continued to function effectively, with full participation by all its members and the members of executive management of the Company.

The board reviewed each committee's terms of reference to ensure that the Company's existing practices remain appropriate. Recommendations from each committee are considered and approved by the board prior to implementation.

Number of board meetings held

The number of board meetings held during the financial year 2014-15 is provided as part of Corporate Governance Report prepared in terms of Clause 49 of the Listing Agreement.

10. AUDITORS

Statutory Auditors

The Company, in terms of Section 139 (1) and (2) of the Act 2013 is required to appoint a statutory auditor for a term of five consecutive years i.e., till the conclusion of sixth annual general meeting and ratify their appointment, during the period, in every annual general meeting, till the sixth such meeting by way of passing of an ordinary resolution.

However, the period, for which any firm has held office as auditor prior to the commencement of the Act 2013 will be taken into account for calculating the period of five consecutive years, as per the fourth proviso to Section 139(2) of the Act 2013 read with Rule 6(3) of the Companies (Audit and Auditors) Rules, 2014,

In view of these requirements, M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, who has been the statutory auditors of the Company for a period of more than 10 years, were appointed as statutory auditors of the Company for the transitional period of three consecutive years at the annual general meeting held on 21st August 2014, subject to the approval and ratification by the shareholders at each annual general meeting during the transitional period.

The Company has obtained necessary certificate under Section 141 of the Act 2013 conveying their eligibility for the above appointment.

The audit committee and the board reviewed their eligibility criteria, as laid down under Section 141 of the Act 2013 and recommended the ratification of the re-appointment for second year from the conclusion of the ensuing AGM till the conclusion of the next annual general meeting as auditors of the Company.

The notes on financial statements referred to in the Auditors' Report are self explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remarks.

Cost Auditor

The board, subject to the approval of the Central Government, has re-appointed Mr A N Raman, Cost Accountant holding Certificate of practice No. 5359 allotted by The Institute of Cost Accountants of India, as a Cost Auditor for conducting Cost Audit for the financial year 2015-16, in terms of the Companies (Cost Records and Audit) Amendment Rules, 2014.

The Company has also received necessary certificate under Section 141 of the Act 2013 from him conveying his eligibility. A sum of Rs.3 lakhs has been fixed by the board, as remuneration in addition to reimbursement of service tax, travelling and out-of-pocket expenses payable to him and is also required to be ratified by the members, at the ensuing AGM as per Section 148(3) of the Act 2013. The Company does not require to carry out Cost Audit for the year 2014-15 and thereby filing of Cost Audit Report does not arise.

As required under the Cost (Cost Accounting Records) Rules, 2011, the Company has filed the Cost Audit Report for the year 2013-14 in XBRL format along with Cost Compliance Report.

Secretarial Auditors

As required under Section 204 of the Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company is required to appoint a Secretarial Auditor for auditing secretarial and related records of the Company.

Accordingly, Ms B Chandra, Practising Company Secretary, Chennai, was appointed as Secretarial Auditors for carrying out the secretarial audit for the financial year 2014-15. As required by Section 204 of the Act, 2013, the Secretarial Audit Report for the year 2014-15, given by Ms B Chandra, Practising Company Secretary, Chennai for auditing the secretarial and related records is attached to this report. The Secretarial Audit Report does not contain any qualification, reservation or other remarks.

11. CORPORATE GOVERNANCE

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

A separate section on Corporate Governance and a certificate from the statutory auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement(s) with the Stock Exchange(s) form part of this Annual Report.

The Chief Executive Officer and the Chief Financial Officer of the Company have certified to the board on financial statements and other matters in accordance with the Clause 49 (IX) of the Listing Agreement pertaining to CEO/CFO certification for the financial year ended 31st March 2015.

12. POLICY ON VIGIL MECHANISM

The board at its meeting held on 24th September 2014, adopted a Policy on Vigil Mechanism in accordance with the provisions of the Act 2013 and as per the revised Clause 49 of the Listing Agreement, which provides a formal mechanism for all directors, employees and other stakeholders of the Company, to report to the management their genuine concerns or grievances about unethical behaviour, actual or suspected fraud and any violation of the Company's Code of Business Conduct or Ethics policy.

The Policy also provides a direct access to the Chairperson of the Audit Committee to make protective disclosures to the management about grievances or violation of the Company's Code of Business Conduct and Ethics.

The Policy is disclosed on the Company's website with the following link http://www.sundaramclayton.com/Web%20files/Investors/ Whistle%20Blower%20Policy.pdf.

13. PUBLIC DEPOSITS

The Company has not accepted any deposit from the public within the meaning of Chapter V of the Act 2013, for the year ended 31st March 2015.

14. DISCLOSURES

Information on conservation of energy, technology absorption, foreign exchange etc:

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure I to this report, in terms of the requirements of Section 134(3)(m) of the Act 2013 read with the Companies (Accounts) Rules 2014;

Annual Return:

Extract of Annual Return in the prescribed form is given as Annexure II to this report, in terms of the requirement of Section 134(3)(a) of Act 2013 read with the Companies (Accounts) Rules, 2014.

Employee's remuneration:

Details of employees receiving the remuneration in excess of the limits prescribed under Section 197 of the Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as a statement and given in Annexure III. In terms of first proviso to Section 136(1) of the Act 2013 the Annual Report, excluding the aforesaid annexure is being sent to the shareholders of the Company. The annexure is available for inspection at the Registered Office of the Company during business hours and any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

Comparative analysis of remuneration paid A comparative analysis of remuneration paid to directors and employees with the Company's performance is given as Annexure V to this report.

Details of related party transactions

There were no material related party transactions under Section 188 of the Act 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014.

Details of loans / guarantees / investments made

During the year under review, the Company had not granted any loans or guarantees covered under Section 186 of the Act 2013.

Please refer note No. IX to Notes on accounts for the financial year 2014-15, for details of investments made by the Company.

Other laws

During the year under review, there were no cases filed pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013.

15. ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co- operation received from the promoters of the Company, viz., T V Sundram Iyengar & Sons Private Limited, Southern Roadways Limited, Sundaram Industries Private Limited and Sundaram Finance Limited.

The directors thank the vehicle manufacturers, vendors and bankers for their continued support and assistance.

The directors wish to place on record their appreciation of the continued excellent work done by all the employees of the Company during the year.

The directors specially thank the shareholders for their continued faith in the Company.

For and on behalf of the board

Chennai VENU SRINIVASAN 8th May 2015 Chairman

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Mar 31, 2014

Dear Members,

The directors have pleasure in presenting the fifty second annual report and the audited accounts for the year ended 31st March 2014.

1. FINANCIAL HIGHLIGHTS

(Rs. in Cr)

Details Year ended Year ended

31.03.2014 31.03.2013

Sales and other income 1,232.54 1,056.68

Profit before finance cost and depreciation 143.82 127.87

Less: Finance Cost 35.65 44.32

Depreciation 53.21 51.25

Profit after finance cost and depreciation 54.96 32.30

Add : Exceptional Item (Income) 5.83 –

Profit before tax 60.79 32.30 Less: Provision for :

Income tax 5.50 –

Deferred tax 1.63 (3.12)

Profit after tax 53.66 35.42

Surplus brought forward from previous year 68.49 63.16

Total 122.15 98.58

Appropriations:

First interim dividend paid 18.21 17.07

Second interim dividend paid 7.59 9.48

Third interim dividend payable 13.15 –

Dividend tax paid 0.20 –

Transfer to general reserve 5.37 3.54

Balance carried to Balance Sheet 77.63 68.49

Total 122.15 98.58

2. DIVIDEND

The board of directors (the board) at their meeting held on 29th October 2013, declared a first interim dividend of Rs.9.00 per share (180%) absorbing a sum of Rs.18.21 Cr for the year 2013-14 and the same was paid to the shareholders on 9th November 2013.

The board at its meeting held on 18th March 2014, declared a second interim dividend of Rs.3.75 per share (75%) absorbing a sum of Rs.7.79 Cr for the year 2013-14 and the same was paid to the shareholders on 28th March 2014.

The board, at its meeting held on 14th May 2014, declared a third interim dividend of Rs. 6.50 per share (130%) for the year 2013-14 absorbing a sum of Rs.13.35 Cr including dividend distribution tax. The same will be paid to the shareholders on or after 24th May 2014. Hence, the total amount of dividend including the third interim dividend payable, for the year ended 31st March 2014 will aggregate to Rs.19.25 per share (385%) on 2,02,32,085 equity shares of Rs. 5/- each.

The Company has set-off its dividend distribution tax payable under Section 115-O(1A) of the Income Ta x Act, 1961 against the dividend distribution tax paid by one of its subsidiary companies on the dividend declared.

The board does not recommend any further dividend for the year under consideration.

3. MINIMUM PUBLIC SHAREHOLDING REQUIREMENTS (MPS)

The Securities and Exchange Board of India (SEBI) vide its circular dated June 4, 2010, required all listed companies to raise the Minimum Public Shareholding (MPS) upto 25% within three years. Further, SEBI vide its various circulars prescribed the manner and norms for achieving the MPS.

During the year, the Company in order to comply with the MPS requirements for increasing its public shareholding from 20% to 25%, (i) issued and allotted 12,64,501 equity shares at Rs.293/- per share (face value per share - Rs.5/-, premium per share- Rs.288/-) on 11th July 2013 to Qualified Institutional Buyers (QIBs) on a preferential basis, in terms of Section 81(1A) of the Companies Act, 1956 and Chapter VIII-A of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended; and (ii) one of the Promoters of the Company, also divested 4 equity shares for complying with the MPS requirement, by way of ''Offer for Sale'' (OFS) route. Consequently, the public shareholding increased to 25%, as mandated by SEBI effective 12th July 2013.

Hence, the shareholding of the Promoters have come down from 80% to 75%, by which the Company is in compliance with the provisions of the Listing Agreement and Rules specified under Securities Contract (Regulations) Rules, 1957. The new shares issued by the Company, after listing, commenced trading on the Stock Exchanges effective 15th July 2013.

The entire issue proceeds of Rs.37.05 Cr were used for repaying the working capital demand loan of the Company.

4. PERFORMANCE

During the year 2013-14, Gross Domestic Product (GDP) was estimated to register a growth of 4.6% as against the 5% achieved in 2012-13 (Source: RBI). The Indian auto industry also has posted moderate growth of 4% (Source: SIAM).

During 2013, GDP estimates in US declined to 1.9% as against 2.8% in 2012 (Source: FTR / IMF) and Europe''s GDP estimates at -0.5% in 2013 as against -0.7% in 2012 (IMF).

In this background, North American class 8 truck segment declined by 7% (Source FTR), while, the sale of European medium and heavy trucks grew by 8% (Source ACEA) mainly due to the pre-buy effect in 2013 ahead of enforcement of Euro 6 norms in January 2014.

The following table highlights the performance of the Company during 2013-14:

Particulars 2013-14 2012-13 Growth (in %)

Sales (Tonnage) 39505 35625 11

Sale of goods (Rs. in Cr) 1143.80 974.72 17

Domestic sales (Rs. in Cr) 573.92 517.84 11

Export sales (Rs. in Cr) 569.88 456.88 25

Profit before Tax (Rs. in Cr) 60.79 32.30 88

6. SUBSIDIARY COMPANIES

As on date of this report, the following are the subsidiaries of the Company:

Name of the Company Subsidiary of

TVS Motor Company Limited Sundaram-Clayton Limited Sundaram-Clayton (USA) Limited

Sundaram Auto Components Limited

TVS Housing Limited

TVS Motor Company (Europe) B.V. TVS Motor Company Limited

TVS Motor (Singapore) Pte. Limited

Sundaram Business Development

Consulting (Shanghai) Company

Limited

PT. TVS Motor Company Indonesia TVS Motor (Singapore) Pte. Limited

During the year, TVS Motor Company Limited (TVSM), the subsidiary company disinvested 7,35,00,000 nos. of equity shares of Rs.10/- each of TVS Energy Limited (TVS Energy), constituting 90.46% of paid up capital in TVS Energy to and in favour of Green Infra Limited (GIL), New Delhi.

Consequently, TVS Energy and its two subsidiaries, namely TVS Wind Energy Limited and TVS Wind Power Limited, ceased to be subsidiaries of TVSM and of the Company, effective at the close of business hours of 16th August 2013.

Both the Company and TVSM continue to hold the required percentage of equity shares of Green Infra BTV Limited (earlier known as TVS Energy) for the purpose of fulfilling the norms of captive consumption.

7. CONSOLIDATED FINANCIAL STATEMENTS

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

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

The board, at its meeting held on 14th May 2014, passed necessary resolution for complying with all the conditions enabling the circulation of annual report of the Company without attaching all the documents referred to in Section 212(1) of the Act 1956 of the subsidiary companies to the shareholders of the Company.

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

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

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

8. DIRECTORS

The Ministry of Corporate Affairs (MCA) has notified majority of the provisions inter alia relating to selection, manner of appointment, roles, functions, duties, re-appointment of independent directors (IDs) and the relevant rules under the Companies Act, 2013 (the Act 2013) and made them effective1st April 2014.

The existing composition of the Company''s board is fully in conformity with the applicable provisions of the Act 2013 and Clause 49 of the Listing Agreement having the following directors as non-executive IDs, namely M/s. Vice Admiral P J Jacob, V Subramaninan, Suresh Kumar Sharma, S Santhanakrishnan, R Vijayaraghavan and Kamlesh Gandhi.

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

It is, therefore, proposed to appoint them as IDs for a consecutive period of five years at the Annual General Meeting (AGM). Necessary declarations have been obtained from them, as envisaged under the Act, 2013.

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

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

In terms of the provisions of sub-section (6) read with explanation to Section 152 of the Act 2013, two-third of the total number of directors i.e., excluding IDs, are liable to retire by rotation and out of which, one-third is liable to retire by rotation at every annual general meeting.

M/s. T K Balaji and Sudarshan Venu, directors of the Company, are therefore, liable to retire by rotation, at this AGM, and being eligible, offer themselves for re-appointment.

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

The board, therefore, recommends their appointment / re-appointment as directors of the Company.

9. AUDITORS

Statutory Auditors

The Company, in terms of Section 139 (1) and (2) of the Act, 2013 is required to appoint a statutory auditor for a term of five consecutive years i.e., till the conclusion of sixth annual general meeting and ratify their appointment, during the period, in every annual general meeting, till the sixth such meeting by way of passing of an ordinary resolution.

The period, for which any firm has held office as auditor prior to the commencement of the Act, 2013 will be taken into account for calculating the period of five consecutive years, as per the fourth proviso to Section 139(2) of the Act, 2013 read with Rule 6(3) of the Companies (Audit and Auditors) Rules, 2014.

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, who were earlier appointed as statutory auditors of the Company, were functioning as auditor for more than ten years. Hence, they are eligible to be appointed for the transitional period of three years in terms of the aforesaid provisions and rules under the Act 2013.

It is proposed to appoint them as statutory auditors for the transitional period of three years, subject to the approval and ratification by the shareholders at this AGM and at subsequent AGM, held during the transitional period.

The Company has obtained necessary certificate under Section 141 of the Act 2013, conveying their eligibility for the above appointment. The audit committee and the Board reviewed their eligibility criteria, as laid down under Section 141 of the Act 2013 and recommended their appointment as auditors for the aforesaid period by the members.

Cost Auditor

As required under the Companies (Cost Accounting Records) Rules 2011, the Company filed the Cost Audit Report along with Cost Compliance Report for the financial year 2012-13 in XBRL format.

The board, subject to the approval of the Central Government, has re-appointed Mr A N Raman, practising cost accountant, holding Membership No.5359, allotted by The Institute of Cost Accountants of India, as Cost Auditor for conducting the Cost Audit for the financial year 2014-15. The audit committee recommended his appointment and remuneration, subject to the compliance of all the requirements as stipulated in circular no.15/2011 dated 11th April 2011 issued by the MCA.

The Company has also received necessary certificate under Section 141 of the Act 2013, conveying his eligibility for re-appointment. The remuneration fixed by the board, based on the recommendation of the audit committee, is required to be ratified by the members at the AGM, as per the requirement of Section 148(3) of the Act 2013.

Secretarial Auditor

As required under Section 204 of the Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company is required to appoint a Secretarial Auditor for auditing the secretarial and related records of the Company.

Accordingly, Ms B Chandra, practising company secretary has been appointed as Secretarial Auditor for carrying out the secretarial audit for the financial year 2014-2015 and the secretarial audit report given by her will be attached with Board''s report to the shareholders, as required.

10.CORPORATE GOVERNANCE

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

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

The chairman and managing director (CEO) and the executive vice president - finance (CFO) of the Company have certified to the board on financial statements and other matters in accordance with Clause 49(V) of the Listing Agreement pertaining to CEO/CFO certification for the financial year ended 31st March 2014.

11. STATUTORY STATEMENTS

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

As per the requirements of Section 217(1)(e) of the Act 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, the information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure I to this report.

Particulars of employees

The particulars required pursuant to Section 217(2A) of the Act 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, are given in Annexure II to this report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Act 1956 the Directors'' Report excluding the said Annexure is being sent to all the shareholders of the Company. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

Public Deposits

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

Directors'' Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Act 1956 with respect to Directors'' Responsibility Statement, it is hereby stated:

(i) that in the preparation of annual accounts for the financial year ended 31st March 2014, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

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

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

(iv) that the directors had prepared the accounts for the financial year ended 31st March 2014 on a "going concern basis".

12.ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co-operation received from the promoters of the Company, viz., T V Sundram Iyengar and Sons Limited, Southern Roadways Limited, Sundaram Industries Limited and Sundaram Finance Limited.

The directors thank the vehicle manufacturers, vendors and bankers for their continued support and assistance.

The directors wish to place on record their appreciation of the continued excellent work done by all the employees of the Company, during the year.

The directors specially thank the shareholders for their continued faith in the Company.

For and on behalf of the board

Chennai VENU SRINIVASAN

14th May 2014 Chairman

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Mar 31, 2013

To The Shareholders

The directors have pleasure in presenting the fifty first annual report and the audited accounts for the year ended 31st March 2013.

1. FINANCIAL HIGHLIGHTS

(Rupees in Crores)

Details Year ended Year ended 31.03.2013 31.03.2012

Sales and other income 1,056.68 1,051.23

Profit before finance cost and depreciation 127.87 141.34

Less: Finance Cost 44.32 38.42

Depreciation 51.25 47.34

Profit after finance cost and depreciation 32.30 55.58

Add : Exceptional Item (Income) 25.34

Profit before tax 32.30 80.92

Less: Provision for :

Income tax 10.35

Deferred tax (3.12) (1.72)

Profit after tax 35.42 72.29

Surplus brought forward from previous year 63.16 26.84

Total 98.58 99.13

Appropriations:

First interim dividend paid 17.07

Second interim dividend payable 9.48

Interim dividend payable 21.81

Dividend tax payable 3.54

Tax relating to earlier years 3.39

Transfer to general reserve 3.54 7.23

Balance carried to Balance Sheet 68.49 63.16

Total 98.58 99.13



2. DIVIDEND

The board of directors of the Company (the board) at their meeting held on 8th February 2013, declared an interim dividend of Rs.9.00 per share (180%) absorbing a sum of Rs.17.07 Cr for the year 2012-13 and the same was paid to the shareholders on 19th February 2013.

The board, at its meeting held on 8th May 2013, declared a second interim dividend of Rs. 5/- per share (100%) for the year 2012-13 absorbing a sum of Rs. 9.48 Cr including dividend distribution tax. The same will be paid to the shareholders on 17th May 2013. Hence, the total amount of dividend including the second interim dividend payable, for the year ended 31st March 2013 will aggregate to Rs.14/- per share (280%) on 1,89,67,584 equity shares of Rs. 5/- each.

The board of directors of the Company do not recommend any further dividend for the year under consideration.

3. INSTITUTIONAL PLACEMENT PROGRAMME (IPP)

During the year, the board, at its meeting held on 8th February, 2013 approved a proposal, subject to the approval of the shareholders in terms of Section 81(1A) of the Companies Act, 1956, (the Act), for additional issue and allotment of 12,64,501 New Equity Shares of Rs.5/- each, at a price to be determined at a later stage, by offering the said New Equity Shares to Qualified Institutional Buyers (QIBs), as defined in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("ICDR Regulations"), as amended, pursuant to an Institutional Placement Programme (IPP) in accordance with Chapter VIII-A of the ICDR Regulations.

The objective of the proposal was to facilitate (a) increasing the minimum public shareholding of the Company to 25 per cent, in the manner prescribed by the Securities and Exchange Board of India (SEBI) and also (b) raising the additional capital to partially meet the funding requirements of the Company.

The proposal was approved by the shareholders, by way of a special resolution, in terms of Section 81 (1A) of the Act, through postal ballot process on 20th March 2013.

As authorized by the shareholders, the board constituted an IPP committee of directors for taking all such steps for determining the terms and conditions for the offer and issue of the aforesaid New Equity Shares to QIBs, in consultation with lead managers, advisors, underwriters and such other intermediaries and authorities, as may be required, after due consideration of the prevailing market conditions and other relevant factors.

This proposal will also ensure that the Company complies with the requirement of achieving minimum public shareholding of atleast 25% in terms of Securities Contracts (Regulation) Rules,1957 and Clause 40A of the Listing Agreement.

4. PERFORMANCE

The year 2012 witnessed a downward trend in economic developments in the country, influenced by the negative sentiment in macro-economic scenario across overseas and domestic markets. The slowdown that commenced in 2011 continued through 2012 and is expected to prevail over the current year as well.

During the year 2012-13, the GDP is likely to register a growth rate of only 5% as against 6.5% achieved in 2011-12. This growth rate is significantly lower than the estimates at the beginning of the year.

During 2012, GDP in US grew by 2.2% as against 1.47% in 2011. (Source: BEA). GDP growth in the European Union was flat in 2012 compared to 1.5% in 2011 (Source: Eurostat / IMF).

In this background, North American class 8 truck segment witnessed a growth of 9% (Source ACT), while, the sale of European medium and heavy trucks suffered decline of 10% (Source ACEA).

The following table highlights the performance of the Company during 2012-13:

Particulars 2011-12 2012-13 (in %)

Sales (Tonnage) 36488 35625 -2.4

Sale of goods (Rs. Cr.) 972.91 974.72 0.2

Domestic sales (Rs. Cr.) 559.64 517.84 -7.5

Export sales (Rs. Cr.) 413.27 456.88 10.5

Profit before Tax (Rs. Cr.) 80.92* 32.30

* includes exceptional income and figures of Anusha Investments Limited consequent upon amalgamation and demerger of non-automotive business to Sundaram Investment Limited.

5. SUBSIDIARY COMPANIES

As on date of this report, the following are the subsidiaries of the Company:

6. CONSOLIDATED ACCOUNTS

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

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

The board, at its meeting held on 8th May 2013, passed necessary resolution for complying with all the conditions enabling the circulation

of annual report of the Company without attaching all the documents referred to in Section 212(1) of the Companies Act, 1956 (the Act) of the subsidiary companies to the shareholders of the Company.

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

A statement giving the following information in aggregate of each subsidiary including subsidiaries of subsidiaries consisting of (a) capital

(b) reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in the subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend has been attached with the consolidated balance sheet of the Company in compliance with the conditions of the said circular issued by MCA.

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

7. DIRECTORS

In terms of the Articles of Association of the Company, M/s Gopal Srinivasan, Vice Admiral P J Jacob (Retd.), S Santhanakrishnan and Suresh Kumar Sharma, directors, will be retiring at this annual general meeting and, being eligible, offer themselves for re-appointment.

The brief resume of these directors and other information have been detailed in the Notice convening the annual general meeting of the Company. Appropriate resolutions for their re-appointment are being placed for approval of the shareholders at the ensuing annual general meeting. The directors recommend their re-appointment as directors of the Company.

During the year, Mr Sudarshan Venu, director of the Company was also appointed as director in the rank of whole-time director, in TVS Motor Company Limited, the subsidiary company, effective 1st February 2013, subject to the terms and conditions, as approved by the shareholders of the subsidiary company, through postal ballot process on 18th March 2013 in accordance with the applicable provisions of the Act.

8. AUDITORS

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, the statutory auditors of the Company, retire at the ensuing annual general meeting and are eligible for re-appointment.

The Company has also received a letter from them, stating that the appointment, if made, will be within the limit prescribed under Section 224(1B) of the Act.

9. COST AUDITOR

In terms of the Companies (Cost Accounting) Records Rules, 2011, the Company had filed the Cost Compliance Report for the financial year

2011-12 with the Ministry of Corporate Affairs (MCA) in XBRL format. Consequent to the MCA''s industry specific Cost Audit Order No. 52/26/CAB-2010 dated 24th January 2012, the Company appointed Mr A N Raman, a practicing cost accountant, as Cost Auditor for auditing the cost accounting information for the financial year 2012-13 and a report in this regard will be filed with the Central Government within the stipulated time. The Central Government has approved the appointment of Mr A N Raman as Cost Auditor for the said financial year.

The board, at its meeting held on 8th May 2013, re-appointed Mr A N Raman as Cost Auditor of the Company for the financial year

2013-14, subject to approval of the Central Government. The Company has received a letter from the cost auditor, stating that the appointment, if made, will be within the prescribed limit under Section 224(1B) of the Act.

10. CORPORATE GOVERNANCE

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

A separate section on corporate governance and a certificate from the statutory auditors of the Company regarding compliance of conditions of corporate governance, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges form part of the Annual Report. The chairman and managing director (CEO) and the executive vice president - finance (CFO) of the Company have certified to the board on financial statements and other matters in accordance with Clause 49(V) of the Listing Agreement pertaining to CEO/CFO certification for the financial year ended 31st March 2013.

11. STATUTORY STATEMENTS

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

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

Particulars of employees

The particulars required pursuant to Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975 as amended, are given in Annexure II to this report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Act, the Directors'' Report excluding the said Annexure is being sent to all the shareholders of the Company. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

Public Deposits

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

Directors'' Responsibility Statement

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

(i) that in the preparation of annual accounts for the financial year ended 31st March 2013, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(ii) that the directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

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

(iv) that the directors had prepared the accounts for the financial year ended 31st March 2013 on a "going concern basis".

12. ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co-operation received from the promoters of the Company, viz., T V Sundram Iyengar and Sons Limited, Southern Roadways Limited, Sundaram Industries Limited and Sundaram Finance Limited.

The directors thank the vehicle manufacturers, vendors and bankers for their continued support and assistance.

The directors wish to place on record their appreciation of the continued excellent work done by all the employees of the Company during the year.

The directors specially thank the shareholders for their continued faith in the Company.

For and on behalf of the board

Chennai VENU SRINIVASAN

8th May 2013 Chairman

---

Mar 31, 2011

Directors' report to the shareholders

The directors have pleasure in presenting the forty-ninth annual report and the audited accounts for the year ended 31st March 2011.

1.FINANCIAL HIGHLIGHTS

(Rupees in lakhs)

Details Year ended Year ended 31.03.2011 31.03.2010

Sales and other income 82,941.55 53,896.83

Gross profit before interest and depreciation 10,796.62 7,175.07

Less: Interest - Net 2,187.69 2,052.35 Depreciation 4,083.09 3,755.89

Profit before tax 4,525.84 1,366.83

Less: Provision for :

Income tax 661.52 90.00

Deferred tax 138.48 41.28

Profit after tax 3,725.84 1,235.55

Add:Tax relating to earlier years 70.68 (75.98)

3,796.52 1,159.57 Surplus brought forward from previous year 1,482.39 1,110.25

Total 5,278.91 2,269.82

Appropriations:

First Interim dividend paid 948.38 189.68

Dividend tax paid 3.75 -

Second Interim dividend payable 1,232.89 474.19

Dividend tax payable 37.78 -

Transfer to general reserve 372.59 123.56

Balance carried to Balance Sheet 2,683.52 1,482.39

5,278.91 2,269.82

2. DIVIDEND The board of directors at their meeting held on 28th January 2011, declared first interim dividend of Rs.2.50 per share (50%) absorbing a sum of Rs.9.48 Cr for the year 2010-11 and the same was paid to the shareholders on 7th February 2011.

The board of directors at their meeting held on 12th August 2011 declared a second interim dividend of Rs.3.25 per share (65%) absorbing a sum of Rs.12.33 Cr for the year 2010-11. Hence, the total amount of dividend including the second interim dividend payable, for the year ended 31st March 2011 will aggregate to Rs.5.75 per share (115%) on 3,79,35,168 equity shares of Rs.5/- each. The board of directors do not recommend any further dividend for the year under consideration.

3. PERFORMANCE

The global economic conditions continued to be strong and positive in 2010-11, resulting in a strong growth for the automotive sector. The Indian economy posted a remarkable recovery in terms of overall growth figures more importantly, in terms of certain fundamentals, which justify optimism for India in the medium to the long term. The data on National Income released by the Central Statistical Organisation estimates the growth of GDP at 8.6% in Financial Year (FY) 2010-11.

During the FY 2010-11, the domesticautomotive demand has recorded highest peaks in the history, with growth at 26.2% compared to FY 2009-10.

During the year under review, the medium / heavy commercial vehicles segment recorded a positive growth of 32% and the light commercial vehicle segment also registered a positive growth of 23%. Car segment achieved a positive growth of 30% and two wheeler segment registered a growth of 26% (Source: SIAM).

During 2010-11, economies across the world were on a steady growth path and the positive upswing in the World economy was better during second half of 2010.

- GDP in US surged by 2.9% in 2010 as against -2.6% in 2009. (Source: FTR).

- GDP in European Union (EU) was positive at 1.8% in 2010 compared to -4.3% in 2009 (Source: Eurostat / IMF)

In thisbackground, North American class 8 trucks market witnessed a positive growth of 28% (Source: FTR). Similarly, the Europe medium and heavy trucks witnessed a positive growth of 6% (Source: ACEA).

Particulars 2010-11 2009-10 Growth%

Sales (Tonnage) 32,239 23,193 39

Sales (Rs. Cr) 764.86 492.68 55

Domestic sales (Rs. Cr) 478.12 319.96 49

Export sales (Rs. Cr) 286.74 172.72 66

PBT (Rs. Cr) 45.26 13.67 231



5. RESTRUCTURING OF COMPANIES

It may be recalled that the board of directors earlier in August 2010 approved a draft composite Scheme of arrangement and amalgamation among the Company (the Scheme), and its wholly owned subsidiaries, namely Sundaram Investment Limited (SIL), TVS Investments Limited (TVSI) and Anusha Investments Limited (AIL) and their respective shareholders under Sections 391-394 of the Companies Act, 1956, (the Act), subject to the approval of the shareholders and other regulatory approvals, as may be required under the applicable securities laws.

Committee of directors formed for this purpose is in consultation with Merchant Bankers and Valuers for finalising the draft scheme and will be presenting it to the board of directors within the next 6 to 8 weeks.

The directors intend to take steps for finalising the Scheme dur ing the current financial year, seek the approval of the Stock Exchanges and complete the process of getting the approval of Hon'ble High Court of Madras.

6. SUBSIDIARY COMPANIES

As of 31st March 2011, the following are the subsidiaries of the Company:

S. No Name of the Company Subsidiary of

1. Anusha Investments Limited Sundaram-Clayton Limited

2. TVS Motor Company Limited Sundaram-Clayton Limited

3. Sundaram Auto Components Limited TVS Motor Company Limited

4. TVS Energy Limited TVS Motor Company Limited

5. TVS Housing Limited TVS Motor Company Limited

6. TVS Motor (Singapore) Pte Limited TVS Motor Company Limited

7. TVS Motor Company (Europe) B.V TVS Motor Company Limited

8. PT. TVS Motor Company Indonesia TVS Motor (Singapore) Pte Limited

9. TVS Wind Power Limited TVS Energy Limited

10.TVS Wind Energy Limited TVS Energy Limited

11.TVS Investments Limited Sundaram-Clayton Limited

12.Sundaram Investment Limited Sundaram-Clayton Limited

13.TVS Electronics Limited TVS Investments Limited

14.TVS Capital Funds Limited TVS Investments Limited

15.TVS-E Access (India) Limited TVS Investments Limited

16.TVS-E Servicetec Limited TVS Investments Limited

17.Sravanaa Properties Limited TVS Investments Limited

18.Tumkur Property Holdings Limited TVS Electronics Limited

19.Prime Property Holdings Limited TVS Electronics Limited

Performance of major unlisted subsidiaries:

Anusha Investments Limited (AIL)

During the year, the wholly owned subsidiary, namely AIL, has earned a total income of Rs.2,268.26 lakhs, which included a dividend income of Rs.1,755.82 lakhs. The profit for the year before tax stood at Rs.2,066.98 lakhs. The Company paid dividend of Rs.255/- per share (255%) on 5,00,000 equity shares of Rs.100/- each during the year 2010-11.

TVS Investments Limited (TVSI)

During the year, another wholly owned subsidiary, namely TVSI, has earned a total income of Rs.1,430.43 lakhs. The profit for the year before tax stood at Rs.113.61 lakhs.

7. CONSOLIDATED ACCOUNTS

As required under the Listing Agreement with the Stock Exchanges, Consolidated Financial Statements of the Company and all its subsidiaries are attached. The Consolidated Financial Statements have been prepared in accordance with the relevant Accounting Standards as prescribed under Section 211 (3C) of the Companies Act, 1956 (the Act). These financial statements disclose the assets, liabilities, income, expenses and other details of the Company, its subsidiaries and associates.

The Ministry of Corporate Affairs (MCA) vide its circular no.2 in file No. 51/12/2007-CL-III dated 8th February 2011 has granted general exemption under Section 212(8) of the Act, for holding companies from attaching annual reports of subsidiaries along with the annual report of the holding companies without seeking any approval of the Central Government. However, this is subject to fulfilment of conditions as stipulated in the said circular granting general exemption to the holding company and passing of a resolution by the board of directors in this regard.

The board of directors at their meeting held on 5th May 2011 passed necessary resolution for complying with all the conditions enabling the circulation of annual report of the Company without attaching all the documents referred to under Section 212(1) of the Act of the subsidiary companies to the shareholders of the Company.

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

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

8. DIRECTORS

M/s.Gopal Srinivasan, Vice Admiral P J Jacob (Retd), Suresh Kumar Sharma and S Santhanakrishnan, directors will be retiring at this annual general meeting and, being eligible, offer themselves for re-appointment in terms of Articles of Association of the Company.

The brief resume of the aforesaid directors to be re-appointed and other connected information have been detailed in the Notice convening the annual general meeting of the Company. Appropriate resolutions for their re-appointment are being placed for approval of the shareholders at the ensuing annual general meeting. The directors recommend their re-appointment as directors of the Company.

9. AUDITORS

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, the statutory auditors of the Company, retire at the ensuing annual general meeting and are eligible for re-appointment.

The Company has received a letter from them, stating that the appointment, if made, will be within the prescribed limit under Section 224(1B) of the Act.

10.CORPORATE GOVERNANCE

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

A separate section on Corporate Governance and a certificate from the statutory auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s) form part of the Annual Report.

The managing director (CEO) and the executive vice president - finance (CFO) of the Company have certified to the board on financial statements and other matters in accordance with the clause 49(V) of the Listing Agreement pertaining to CEO/CFO certification for the financial year ended 31st March 2011.

11. STATUTORY STATEMENTS

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

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

Particulars of employees

The particulars required pursuant to Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975 as amended, are given in Annexure II to this report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Act, the Directors' Report (excluding Annexure II) is being sent to all the shareholders of the Company. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

Public Deposits

The Company has not accepted any deposit from the public within the meaning of Section 58A of the Act for the year ended 31st March 2011.

Directors' Responsibility Statement

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

(i) that in the preparation of annual accounts for the financial year ended 31st March 2011, the applicable Accounting Standards had been followed and that there were no material departures;

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

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

(iv) that the directors had prepared the accounts for the financial year ended 31st March 2011 on a "going concern basis".

12.ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co-operation received from M/s. T V Sundram Iyengar and Sons Limited, Madurai.

The directors thank the vehicle manufacturers, vendors and bankers for their continued support and assistance.

The directors wish to place on record their appreciation of the continued excellent work done by all the employees of the Company during the year.

The directors specially thank the shareholders for their continued faith in the Company.

For and on behalf of the board

Chennai GOPAL SRINIVASAN VENU SRINIVASAN

12th August 2011 Director Managing Director

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Mar 31, 2010

The directors have pleasure in presenting the forty-eighth annual report and the audited accounts for the year ended 31st March 2010.

FINANCIAL HIGHLIGHTS

Rs. in lakhs

Details Year ended Year ended

31.03.2010 31.03.2009

Sales and other income 53,896.83 52,869.87

Gross profit before interest and

depreciation 7,175.07 6,008.07

Less: Interest - Net 2,052.35 2,207.17

Depreciation 3,755.89 3,105.06

Profit before tax 1,366.83 695.84

Less: Provision for:

Income tax 90.00 -

Fringe benefit tax - 51.00

Deferred tax 41.28 12.18

Profit after tax 1,235.55 632.66

Add: Dividend tax set off - 56.41

1,235.55 689.07

Surplus brought forward from previous year 1,110.25 866.64

Total 2,345.80 1,555.71

Appropriations:

Tax relating to earlier years 75.98 2.78

First Interim dividend paid 189.68 189.73

Second Interim dividend payable 474.19 -

Proposed dividend - 189.68

Transfer to general reserve 123.56 63.27

Balance carried to Balance Sheet 1,482.39 1,110.25

2,345.80 1,555.71

2. DIVIDEND

The board of directors of the Company at its meeting held on 25th January 2010, declared first interim dividend of Re.0.50 per share (10%) absorbing a sum of Rs.1.90 Cr for the year 2009-10 and the same was paid to the shareholders on 8th February 2010.

The board at its meeting held on 13th August 2010 declared a second interim dividend of Rs.1.25 per share (25%) absorbing a sum of Rs.4.74 Cr for the year 2009-10. Hence the total amount of dividend including the second interim dividend, for the year ended 31st March 2010 will aggregate to Rs.1.75 per share (35%) on 3,79,35,168 equity shares of Rs.5/- each.

3. BONUS SHARES

During the year, the Company issued and allotted 1,89,67,584 equity shares of Rs.5/- each on 14th October 2009 in the ratio of 1:1 to the eligible holders of equity shares of Rs.5/- each as on the record date, i.e., 12th October 2009 as bonus equity shares by capitalizing an equivalent amount standing to the credit of the general reserve account of the Company. As a result, the Companys paidup equity share capital now stands at Rs.18.97 Cr. The said issue and allotment of bonus shares was completed within the stipulated period of two months of its declaration by the board of directors in terms of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.

4. PERFORMANCE

During 2009-10, economies across the world (barring few) showed signs of recovery and moved to growth phase after experiencing difficult market conditions due to economic slowdown in the automotive sector in previous years.

The Indian economy is able to bounce back quickly and strongly growing at 7.2% in 2009-10. The automotive sector in India grew steadily at the beginning of the year, gained momentum in all segments in the second half of the year. It has ended the year with a record growth and performance.

During the year under review, the medium / heavy commercial vehicles segment recorded a positive growth of 34% and the light commercial vehicle segment also registered a positive growth of 43%. Car segment achieved a positive growth of 26% and two wheeler segment registered a growth of 26%.

The Companys export business remained affected by the economic downturn in the key markets namely, US and Europe. US manufacturing showed signs of improvement during second half of the year, whereas the depressed conditions continued in Europe throughout 2009-10.

In this backdrop, North American class 8 trucks market witnessed a negative growth of 42%, while the class 5-7 trucks market witnessed a negative growth of 38%. Similarly, the Europe medium and heavy trucks witnessed a negative growth of 60%.

This corresponds to the sale of 19,499 tonnes of castings sold by the Company in the year 2009-10 as against 17,633 tonnes of castings sold in 2008-09. The Company achieved sales of Rs.492.68 Cr during 2009-10 as against Rs.492.37 Cr in 2008-09. Exports registered a decline and stood at Rs.172.72 Cr against Rs.197.49 Cr achieved in 2008-09. The Company achieved profit of Rs.12.36 Cr as against Rs.6.33 Cr in previous year, registering a growth of 95%.

6. RESTRUCTURING OF COMPANIES

Effective 3rd June 2009, the Company has become a subsidiary of T V Sundram Iyengar & Sons Limited, as was reported last year. The present holding of the Indian promoters is 80% in the share capital of the Company. In view of the guidelines on mandatory minimum public holding in the listed companies, ways to bring about reduction in the promoters holding from the existing 80% to 75%, have to be examined so that the public shareholding fulfills the stipulated percentage of 25%. . The Company is examining various alternatives in this regard.

In the meantime, in order to bring greater focus on automotive related businesses, a proposal is being considered for demerging the non-automotive related investments and other connected activity therewith to Sundaram Investment Limited (SIL), whose entire share capital is being presently held by the Company. SIL has thus become a wholly owned subsidiary of the Company effective 13th August 2010. The proposed demerger subject to the approval of shareholders and sanction by the Honble High Court of Madras in terms of the provisions of Section 391 - 394 of the Companies Act, 1956 is being embodied in a composite Scheme of Arrangement. Upon the Scheme of Arrangement being approved by the Honble High Court, the existing number of shares, held by the shareholders in the Company will be distributed as per the Scheme, equally between the Company and SIL. Thus, the shareholders of the Company will hold same number of shares of Rs. 51- each in both the companies, namely, the Company and SIL. The details of the composite Scheme of Arrangement will be circulated to the shareholders for approval at a Court convened meeting to be held in due course.

The proposed Scheme of Arrangement also envisages that the existing wholly owned subsidiary of the Company, TVS Investments Limited (TVSI), which, upon becoming a wholly owned subsidiary of SIL following the sanction of the Scheme by the Honble High Court of Madras, will as part of the same Scheme, be merged with SIL and SIL will be renamed as TVS Investments Limited with the approval of the Honble High Court of Madras. As part of the composite Scheme of Arrangement, M/s Anusha Investments Limited (AIL), a wholly owned subsidiary of the Company, is also proposed to be merged with the Company. By this process of rationalisation, the ability to concentrate on core businesses of the respective companies and correspondingly the shareholders value wilt get increased.

7. SUBSIDIARY COMPANIES

As of 31st March 2010, the following are the subsidiaries of the Company:

S. No Name of the Company Subsidiary of

Automotive related investments

1. Anusha Investments Limited Sundaram-Clayton Limited

2. TVS Motor Company Limited Sundaram-Clayton Limited

3. Sundaram Auto Components Limited TVS Motor Company Limited

4. TVS Energy Limited TVS Motor Company Limited

5. TVS Motor (Singapore) Pte Limited TVS Motor Company Limited

6. TVS Motor Company (Europe) B.V TVS Motor Company Limited

7. PT TVS Motor Company Indonesia TVS Motor (Singapore) Pte Limited Non automotive related investments

8. TVS Investments Limited Sundaram-Clayton Limited

9. TVS Electronics Limited TVS Investments Limited

10. TVS Capital Funds Limited TVS Investments Limited

11. TVS-E Access (India) Limited TVS Investments Limited

12. TVS-E Servicetec Limited TVS Investments Limited

13. Sravanaa Properties Limited TVS Investments Limited

14. Tumkur Property Holdings Limited TVS Electronics Limited

15. Prime Property Holdings Limited TVS Electronics Limited

The Company on 15th June 2010 invested an amount of Rs.4.50 Cr in the equity share capital of TVS Energy Limited, a subsidiary of the Company in terms of section 4(1 )(c) of the Companies Act, 1956.

TVS Motor Company Limited, Chennai (TVS Motor), a subsidiary of the Company acquired the entire paid-up capital consisting of Rs. 5 lakhs of TVS Housing Limited, Chennai (TVS Housing). TVS Housing became a wholly owned subsidiary of TVS Motor on 21st June 2010 and hence it became a subsidiary of the Company in terms of section 4(1 )(c) of the Companies Act, 1956.

Performance of Subsidiaries:

Anusha Investments Limited (AIL)

During the year, the wholly owned subsidiary, namely Anusha Investments Limited (AIL), has earned a total income of Rs.2062.70 lakhs, which included dividend income of Rs.1641.81 lakhs. The profit for the year stood at Rs. 1902.87 lakhs. The Company has declared a dividend of Rs.240/- per share on 5,00,000 equity shares of Rs.100/- each for the year 2009-10.

TVS Investments Limited (TVSI)

During the year, TVS Investments Limited (TVSI) has earned a total income of Rs.6387.04 lakhs. The profit for the year stood at Rs.1717.81 lakhs. TVSI has not declared any dividend for the year 2009-10.

8. CONSOLIDATED ACCOUNTS

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

Pursuant to the application in terms of Section 212(8) of the Companies Act, 1956 made by the Company to the Central Government, seeking exemption from attaching the balance sheet and profit and loss account of its subsidiaries along with the report of the board of directors and that of the auditors thereon, with the Companys accounts, the Company has obtained the approval of the Central Government vide letter No.47/559/2010-CL-lll dated 11th June 2010.

The annual accounts, reports and other documents of the subsidiary companies will be made available to the members on receipt of a request from them.

The annual accounts of the subsidiary companies will be available at the registered office of the Company and at the respective subsidiary companies concerned, for inspection by any member during the business hours of any working day.

9. DIRECTORS

The directors are happy to report that Mr Venu Srinivasan, managing director of the Company has been conferred in January 2010 with Padmashri, a prestigious adoration by Government of India in appreciation of his significant contribution for the promotion of trade and industry.

Mr Venu Srinivasan also received the distinguished civilian honour "Order of Diplomatic Service Merit" from the President of Republic of Korea in the year 2010, in recognition of his valuable contribution in promoting Korea-India bilateral relations and for meritorious service to the extension of national prestige overseas for the promotion of friendship with other nations.

Mr T R Sridharan who was appointed as an additional director effective 25th January 2010 will vacate his office in terms of Section 260 of the Companies Act, 1956 at the ensuing annual general meeting and is eligible for appointment, as a director of the Company. In terms of Section 257 of the Companies Act, 1956, a notice has been received from a member of the Company signifying the proposal for the appointment of Mr T R Sridharan as a director, at the ensuing annual general meeting.

Dr Lakshmi Venu, who was appointed as an additional director effective 22nd March 2010 will vacate her office in terms of Section 260 of the Companies Act, 1956 at the ensuing annual general meeting and is eligible for appointment, as a director of the Company. In terms of Section 257 of the Companies Act, 1956, a notice has been received from a member of the Company signifying the proposal for the appointment of Dr Lakshmi Venu as a director, at the ensuing annual general meeting. Dr Lakshmi Venu was also appointed as Director-Strategy in the rank of managing director for a period of five years effective 22nd March 2010 on such terms and conditions subject to the approval of the shareholders at the ensuing annual general meeting of the Company. The abstract of the terms of appointment and memorandum of interest was circulated to members on 6th April 2010 pursuant to section 302 of the Companies Act, 1956.

M/s.Suresh Krishna, T K Balaji and K Mahesh, directors will be retiring at this annual general meeting and, being eligible, offer themselves for re-appointment.

The brief resume of the aforesaid directors to be re-appointed and/or appointed and other connected information have been detailed in the Notice convening the annual general meeting of the Company. Appropriate resolutions for their re-appointment and/or appointment are being placed for approval of the shareholders at the ensuing annual general meeting. The directors recommend their re-appointment / appointment as directors of the Company.

10. AUDITORS

M/s. Sundaram & Srinivasan, Chartered Accountants, retire at the ensuing annual general meeting and are eligible for re-appointment.

The Company has received a letter from them, stating that the appointment, if made, will be within the prescribed limit prescribed under section 224(1 B) of the Companies Act, 1956.

11.CORPORATE GOVERNANCE

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

A separate section on Corporate Governance and a cartificate from the statutory auditors of the Company regarding complia.ice of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement(s) with the Stock Exchange(s) form part of the Annual Report.

The managing director (CEO) and executive vice president - finance (CFO) of the Company have certified to the board on financial statements and other matters in accordance with the clause 49(V) of the Listing Agreement pertaining to CEO/CFO certification for the financial year ended 31st March 2010.

The Ministry of Corporate Affairs issued a Corporate Governance Voluntary Guidelines 2009 in the second half of December 2009. The guidelines broadly outline conditions for appointment of directors, their remuneration / responsibilities, risk management by the board, the enhanced role of audit committee, rotation of audit partners / firms and conduct of secretarial audit. The Company, while generally meeting the various requirements, has already commenced taking steps for appropriate action for compliance of the relevant items of the guidelines.

12. STATUTORY STATEMENTS

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

As per the requirements of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, the information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure I to this report.

Particulars of employees

The particulars required pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, are given in Annexure II to this report.

However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors Report (excluding Annexure II) is

being sent to all the shareholders of the Company. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the registered office of the Company.

Public Deposits

The Company has not accepted any deposit from the public within the meaning of Section 58A of the Companies Act, 1956 for the year ended 31st March 2010.

Directors Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby stated:

(i) that in the preparation of annual accounts for the financial year ended 31st March 2010, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

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

(iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with

the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the directors had prepared the accounts for the financial year ended 31st March 2010 on a "going concern basis".

13. ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co-operation received from M/s.T V Sundram Iyengar and Sons Limited, Madurai.

The directors thank the vehicle manufacturers, vendors and bankers for their continued support and assistance.

The directors wish to place on record their appreciation of the continued excellent work done by all the employees of the Company during the year.

The directors specially thank the shareholders for their continued faith in the Company.



For and on behalf of the board

Chennai GOPALSRINIVASAN VENUSRINIVASAN

13th August 2010 Director Managing Director