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Directors Report of TVS Motor Company Ltd.

Mar 31, 2022

DIRECTORS'' REPORT TO THE SHAREHOLDERS

The Directors have the pleasure in presenting the 30^th annual report and the audited accounts of the Company for the year ended 31^st March 2022.

1. COMPANY PERFORMANCE

Key Performance Snapshot

The Company registered sales of 31.37 lakh units of two-wheelers in 2021-22. The Company registered its highest turnover and profit before tax until now of $ 20,791 Cr and $ 1,213 Cr, respectively, in spite of many critical headwinds.

Macro Overview

The year was marked by the severe second wave of the pandemic, supply chain disruptions and the onset of a super cycle of commodity price increases. The last quarter also witnessed the outbreak of geopolitical unrest and strife, which though localized to some extent, affected the entire globe.

However, 2021-22 will be remembered for the unparalleled resilience of human spirit across the world, even more so in the Indian populace, the Indian economy, industry, and the Company. In response to the pandemic 11.4 billion and 1.86 billion doses of vaccine were delivered globally and in India, respectively. The Company ensured 100% vaccination coverage of all its employees. The vaccination coverage was also facilitated for employee families. Many employees from TVS and SST also provided exception service as voluntary CoVID frontline warriors.

Robust growth of Indian economy in fiscal 2022 as activities return to pre-CoVID levels

The Indian economy bounced back after the CoVID-induced shock in fiscal 2021. It withstood the second wave of the CoVID pandemic that hit India in April-June 2021 and the third wave in January 2022 as vaccination levels increased and the people and the government learned to adapt their responses through experiences gained during the first wave. Increased vaccination coverage, reduction in mortality rates and ease of restrictions gave a fillip to private consumption and supported recovery of aggregate demand. The recovery was also supported by increased spending by the government, strong pick up in export demand, and the RBI continuing to support the incipient recovery by maintaining a low interest rate regime. The Indian economy regained its tag of being one of the fastest growing economies in the world.

As per the second advance of the National Statistical Office, the economy was estimated to have grown by 8.9% during fiscal 2022. Real GDP growth returned to pre-pandemic levels, though capacity utilization and consumer confidence are yet to reach pre-pandemic levels, signalling further growth potential.

Mobility Industry Performance - India overview

The domestic two-wheeler industry declined by 11% in 2021-22 on the back of a 13% decline in 2020-21. The industry size is at 13.47 million units, similar to 2011-12 levels of 13.41 million units. The 2-wheeler industry saw sharp changes in the growth momentum over the quarters. Q1 2021-22 grew by 85% partially due to the low industry base of last year and all subsequent quarters witnessed declines, over the comparable periods of last year - Q2 (12.5%), Q3 (25%) and Q4 (23.3%).

Compared to the two-wheeler industry decline of 11% in 2021-22, the Company''s performance in domestic was at a 6% decline in sales volume.

Mobility Industry Performance - International Business overview

In the International Business, exports of two-wheelers in 2021-22 were at 10.9 lakh units with a growth of 43% over 2020-21 against an industry growth of 36% for two-wheeler exports from India. The Company achieved a milestone of exceeding 1 million units in two-wheeler export. Threewheeler exports during the year reached 1.63 lakh units, a growth of 41% over 2020-21.

Mobility Industry Performance - Electric Vehicles (EV) Overview

The Company continued its expansion in its EV footprint and the buildout of the infrastructure as this category gains momentum. The Company has created a dedicated vertical with over 600 engineers and adopted the Centres of Competency (COCs) with agile working approach. The EV 2W industry predominantly operates in the scooter form, and today is ~10% of the total scooter Industry (ICE EV). TVS has sold more than 10,000 EV vehicles in 2021-22 with a geographical presence equivalent to 50% of the EV industry. Further, there have been alliances and joint initiatives with partners like TATA Power, JIO BP, BESCOM among others to expedite the creation of the charging infrastructure.

New Product Launches

The Company''s new product launches have been well received by consumers, experts, and the trade. TVS RAIDER 125 (Sporty commuter motorcycle) consumer''s appreciation of the products manifested as advance orders that continue to be very strong across the country and global markets like South Asia and Latin America. TVS Jupiter 125 (executive commuter scooter) is an extension of the Company''s leading Scooter Brand, TVS Jupiter. TVS Apache 160 4V (premium segment) was another successful premium product variant that was launched. TVS HLX 150 5 speed is a very significant product launch targeting the African commercial use market where the Company enjoys strong market presence.

These new offerings that were designed and developed through pandemics and lockdowns have been true to the TVS DNA of customer-centric innovation and quality that ensured that they have become the most awarded launches in their respective categories. The TVS Jupiter 125 is the most awarded Scooter launch of the year. The TVS Raider became the second offering from the TVS stable to be adjudged INDIAN MOTORCYCLE OF THE YEAR (IMOTY) 2022 - the first 125 segment motorcycle ever to win this accolade.

BMW Association

The Company expanded its strategic association with BMW. Through the association, the Company is targeting joint development of new platforms and future technologies, including urban-centric electric vehicles. The products will be targeted for the global urban centric markets and the "cool" next gen consumers.

Corporate Social Responsibility

The Company has always recognized its social responsibility as an integral and critical part of its value system. The Company also places on record its gratitude to all the CoVID frontline warriors from within and outside the Company, for the outstanding service to society through the second wave of the pandemic and after. The Company and its CSR arm, the Srinivasan Services T rust (SST) undertook many initiatives including donation of relief materials to Public Health Centres in villages, Government General Hospitals at Chennai, and Corona Care Centres in SST villages during Second wave of CoVID-19. In the last 26 years, SST has been on the forefront of various empowerment activities including organizing more than 60,000 women into Self-Help Group (SHGs), repairing and renovating the government infrastructure for more than 2,500 villages and desilting more than 290 water bodies.

SST''s significant contributions and innovations for driving social impact received recognition as it won the ''Outstanding Social Innovation'' award at the CK Prahalad Awards 2021 in the ''Bottom of the Pyramid'' category.

TVS Motor Company became the First Indian 2W & 3W maker to have become a signatory to the world''s largest sustainability initiative, the United Nations Global Compact (UNGC). This will ensure enhanced collaborations and actions towards wider development of goals, particularly the sustainable development goals (SDGs).

Cost & Price Management

The Company responded to the unprecedented increases in commodity costs through various Company-wide initiatives. These included premiumisation across products through a variants based strategy, focus on building volume share from the export segment, continued focus on reduction of material and fixed costs, waste elimination and enhancing the supply chain effectiveness. While price increases also

had been taken to mitigate the impact of the raw material costs, the head room for passing on cost increase is very limited since for the last 3 years the prices of 2-Wheeler in India have seen sharp increases and the increasing prices are impacting demand.

All of these actions required significant rigour, expertise and agility that allowed the Company to, in addition to reducing cost, improve value delivery to all stakeholders, especially our consumers.

2. FINANCIAL HIGHLIGHTS

The Company for the full financial year reported its highest ever annual turnover and profit before tax of $ 20,791 Cr and $ 1,213 Cr respectively.

Year ended ^Details 31-03-2022		Year ended 31-03-2021
SALES Quantitative	(Numbers in lakhs)
Motorcycles	17.32	13.42
Mopeds	4.83	6.26
Scooters	9.23	9.61
Three Wheelers	1.72	1.24
Total vehicles sold	33.10	30.53
Financials	(Rupees in Crores)
Revenue from operations 20790.51		16750.54
Other Income	18.99	32.97
Profit / loss before Depreciation, Finance Costs, Exceptional items and Tax Expense	1980.73	1461.52
Less: Depreciation / Amortization / Impairment	611.44	493.68
Profit / loss before Finance Costs, Exceptional items and Tax Expense	1369.29	967.84
Less: Finance Costs	125.92	141.60
Profit / loss before Exceptional items and Tax Expense	1243.37	826.24
Add / less: Exceptional items	(30.16)	-
Profit / loss before Tax Expense	1213.21	826.24
Less: Tax Expense (Current & Deferred)	319.65	214.20
Profit / loss for the year	893.56	612.04
Other Comprehensive Income / loss	(64.31)	107.09
Total Comprehensive Income	829.25	719.13
Less: Dividend on Equity Shares	178.16	166.28
Balance carried forward	651.09	552.85

3. DIVIDEND

The Board of Directors of the Company (the Board) at their meeting held on 18^th March 2022, declared an interim dividend of $ 3.75 per share (375%) on 47,50,87,114 equity shares of $ 1/- each for the year 2021-22 absorbing a sum of $ 178.16 Cr. The same was paid before 5^th April 2022.

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.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENTS Two-wheeler

The domestic two-wheeler industry recorded a sale of 13.4 Mn units in 2021-22, a decline of 11% from 15.1 Mn units in 2020-21. It witnessed a growth of 85% in Q1 due to the low base in the previous year. However, for the rest of the year, the industry declined and did not recover. This decline was due to weakened demand in both urban and rural markets, with the rural markets being severely impacted. While the monsoon remained favourable, the non-agri rural services sector underperformed significantly. This manifested itself in lower demand in the entry and mid-level segments of commuter motorcycles and mopeds. The rural markets felt the combined effect of savings depletion, income erosion, broad inflation, fuel inflation and rising vehicle prices due to commodity cost increases.

The scooter industry declined by 10.9%, with 3.98 Mn units sold in 2021-22 compared to 4.48 Mn units in 2020-21. The category share was 29.7% in 2021-22 compared to 32% in 2020-21. This was primarily led by the pandemic impact and subsequent stringent lockdown norms. The slow resumption of schools and colleges and continued work from home practices impacted the resurgence of the scooter segment. The upward momentum in vehicle prices and petrol prices further slowed the demand trajectory.

The motorcycle industry declined by 10% over last year. The category share of motorcycle grew by 0.5% to reach 66.8% in 2021- 22. The premium motorcycle sales declined by 24% from 1.39 Mn units in 2020-21 to 1.05 Mn units in 2021-22 and the category share declined by 1.4% to reach 9.2%. The commuter motorcycle category share grew 1.7% to 53.2% while volumes declined by 8% to 7.17 Mn units in 2021-22 from 7.80 Mn units in 2020-21. The Premium motorcycle segment decline was primarily due to the semi-conductor shortages that have affected the supply chain. The Commuter Motorcycle segment relative resilience on the other hand reflects the continuing need for mobility to fulfill economic and social responsibilities. However, there is an increased tendency of postponement of purchase, especially in replacement buyers

and down-trading due to escalating vehicle acquisition costs has impacted volumes.

In the international market, the two-wheeler industry grew by 36% in 2021-22 over 2020-21, making it the best year for exports from India. The industry saw a revival post CoVID, bouncing back to the levels of 2019-20 with strong growth of personal mobility needs and the marginal impact of pent-up demand post lockdowns. Supplies remained stable with timely availability of raw materials for meeting the market demand.

Three-wheeler

The overall three-wheeler small passenger industry (3 plus 1 segment) grew by 31% in 2021-22 (from 4.43 lakh units in 2020-21 to 5.82 lakh units in 2021-22). The domestic industry grew by 65% and exports market grew by 26% in 2021-22 over last year.

Electric two-wheelers

On VAHAN, electric two-wheeler today accounts for 4.5% of the total two-wheeler registrations. However, this underrepresents the consumer mindspace that it enjoys. The last year has seen the consumer perspective of the transition to EV move from "IF" to "WHEN". Large numbers of consumers today are actively considering EVs for their respective needs.

The industry saw a robust growth of ~5.6x. The growing sensitivity to climate impact and the improved Total Cost to Operation (TCO) proposition considering rising fuel prices saw accelerated consumer interest in the category. The FAME II enhancement, Production Linked Incentive (PLI), state subsidy and other EV related infrastructure initiatives of the government reinforced consumer faith in the segment.

BUSINESS OUTLOOK & OVERVIEW

As we step into fiscal 2023, the Company remains sanguine about the prospects for its business. The RBI, in its April 2022 monetary policy announcement, has projected GDP growth for fiscal 2023 at 7.2%. Further, 19 of the 22 high frequency indicators including railway freight, e-way bill volumes and coal production have returned to pre-pandemic levels and point towards a strong continuing recovery in the broader economy. This gathering momentum is expected to drive the remaining 3 indicators (automotive sales, steel consumption and air passenger traffic) also to positive territory. Growth in fiscal 2023 is expected to be holistic, supported by following factors:

â¢ Strong rural demand supported by favorable rabi output and increase in crop prices.

â¢ A pickup in urban consumption demand due to increasing vaccination coverage, ease of restrictions and an increase in contact-intensive services that bore the brunt of the pandemic.

â¢ Improving consumer sentiment as also indicated by RBI''s Consumer Confidence survey (April 2022) and a return to pre-pandemic levels.

TVS Raider was launched in September 2021 to cater to the aspirations of global customers. Designed for Gen Z, TVS Raider is the most stylish offering in the 125cc segment, The''distinctly young'' motorcycle offers first-in-class

â¢ Normal monsoon as per the initial forecast of the India Meteorological Department

â¢ Uptick in capex spends by the Central and State governments as also private corporates

The focus of the Union Budget for fiscal 2023 on increasing Capital Expenditure (CapEx) despite walking a fiscal tightrope is extremely heartening as it creates a platform for higher growth. The Government''s thrust on CapEx coupled with initiatives such as the PLI scheme is expected to give a push for improvement in investment activity. The lift in the consumption cycle is tied to broad based pick-up in economic activity, which the Indian government is trying to engineer through focus on investments. This is expected to enhance the growth potential of the Indian economy and, it is hoped, will bring endurance to growth in the medium term. The International Monetary Fund (IMF) projects India to remain the fastest growing major economy in the world in calendar year 2022.

GDP Growth (constant prices) for major global economies (CY 2022)

Longer term, the Indian economy is expected to increase by ~2.5x to $6.5 trillion by 2030 with a real GDP growth rate in the range of 6-6.5%. Per capita income and vehicle ownership is expected to double by 2030 led by formalization, digitization and urbanization.

The two greatest risks for the economy at this stage stems from inflationary pressures and supply side concerns. The super cycle of commodity prices that began in fiscal 2022 was further fueled due to the war between Russia and Ukraine. It led to a significant spike in oil and commodity prices, thereby further exerting significant upward pressure on inflation. Taking cognizance of the spike in prices, the Government pro-actively increased subsidy on fertilizers inorder to absorb shocks on farm input prices due to rise in commodity prices. Supply chain challenges and increasing logistics costs due to the war and CoVID-19 induced lockdowns in China are key areas of concern and will be monitored carefully.

The improving road infrastructure and economic environment with our current mass transit systems will further drive the demand for mobility for the masses. This demand is today best served by the 2-wheeler segment, making its fundamentals very attractive in light of a resurgent India.

Due to the strong product line-up, unwavering focus on consumer, quality, cost, and the strong new launches the Company is confident about outperforming the industry, inspite of the global challenges and a tough business environment.

Domestic Moped and Economy motorcycle segments have lately underperformed and are likely to return to growth, with some buoyancy expected in rural agriculture led markets. However, with considerable improvement in the urban markets across India, the Company is positive about the performance of the scooter segment. This segment will see significant demand from students, working women and the broader replacement segment is likely to perform better in line with the re-opening of school, colleges along with offices. Export of two-wheelers is likely to see a growth during the year fuelled by strong demand for TVS products and due to its operations in diverse geographies that mitigates overall risk. Some of geographies which are agriculture dependent and have surplus of crude oil will act as a hedge against the countries which may face adverse impact due to high fuel and food prices.

Electric two-wheeler

The Company has setup a vertical to rapidly ramp up its product pipeline and presence globally. The PLI and FAME II initiatives of the government will be fully leveraged by the Company and strategically build a sustained dominant play in this segment. The industry is slated to grow rapidly and the Company has robust plans for this segment. In addition, with the strategic association with BMW, the Company will be exploring the joint design and development of urban EV options for the global markets.

New Product Launches and Initiatives

During the year 2021-22, the following new products and variants were launched.

features such as reverse LCD cluster, multiple ride modes, first-in-category under seat storage and best in class performance.

TVS Raider is delighting customers in the segment with its distinct style, features and performance and has gotten rave reviews from auto journalists across traditional and digital media. TVS Raider has also become the most awarded commuter motorcycle of the year winning more than 8 awards including the coveted "Indian motorcycle of the year 2022".

The TVS Apache RTR Series has always led the premium segment by being a pioneer in race performance and l introduced many industry firsts I and best-in-class offerings. It f has proudly upheld the tradition of catering to the evolving customer needs this year as

Taking the legacy of TVS Jupiter forward, the all new TVS Jupiter 125 was launched in October''21 marking its entry into the 125cc scooter segment. Jupiter 125 was conceptualised keeping the affluent Indian commuter in mind who has progressed and

well. Though the year started in lockdown, Apache was able to establish itself as a dominant player in the premium segment.

Leading the segment with its technological prowess, the TVS Apache RTR 160 4V was introduced with first-in-class features - 3 ride modes (Urban, Rain, Sport), SmartXonnect and LED Headlamp with DRL. It received a welcoming response from customers across the country. In addition, there was also the successful launch of Apache RTR 160 4V Special Edition in Matte Black.

Leading the two-wheeler industry with another important milestone, was the crossing of 1 lakh AOG (Apache Owners'' Group) members, the first domestic OEM to have achieved this feat. This advocacy momentum on the ground and in the digital space further strengthens the brand. This experience is further enhanced by the exquisite brand experience due to many initiative including, APP (Apache Pro Performance), Apache Riding Experience (ARE), TVS Training School, Women''s Training and Selection, and the One Make Championship, which continue to grow the aspiration for the brand.

The TVS Apache RR310 with its aspirational and excitement quotient continues to increase its footprint with the premium dealership network expansion and a best-in-class product offering. The flagship product was the first to have an offering under the TVS Built to Order (BTO) - an industry first factory customization offering that allows the customers to customize and personalize their bike with the Web Configurator or TVS ARIVE App (industry first Augmented Reality App for virtual experience). The offering has received overwhelming response.

The brand continued to evolve by keeping customers engaged with consistent interaction on social media and brand experience programs. On-ground brand experience activities helped to create brand advocacy, with its involvement among both genders alike.

As we move into the new financial year, we have already taken steps to make a bigger impact and build a stronger connect with all our customers. With more exciting offerings in the line-up, the TVS Apache Series will continue to focus on brand building and engagement as we progress.

moved up in life. Keeping the core philosophy of "Zyada" (MORE) intact, Jupiter 125 takes it a notch above and promises to offer "Zyada se bhi Zyada" on all counts.

The progressive neo masculine styling and features reinforce the premiumisation journey of the scooter customer. The feature rich scooter is truly bigger and more spacious with industry-first features such as the largest under-seat storage, segment-leading longest seat, progressive neo masculine styling, unrivalled mileage and much more.

The launch was a grand success, and the product has been gaining great acceptance in the market. Within 5 months of launch, Jupiter 125 has sold more than 93k units. In order to build awareness and establish product superiority, a complete 360^o campaign was executed in the TV, print, outdoor and digital channels, highlighting the brand proposition and key differentiating features of the brand.

TVS Jupiter reached 4.5 Mn happy customers during FY''21-22.

To continue the journey of providing "Zyada ka Fayda" TVS Jupiter ZX SmartXonnect was launched in March 2022, making it "The only 110cc

scooter in India to offer fully digital console, navigation and voice assist feature"

SmartXonnect Bluetooth connectivity is being introduced in the new top-of-the line variant (ZX Disc) with best-in-class technology features like fully digital console, Bluetooth connectivity with Voice Assist, Navigation Assist, and SMS/ Call alerts to cater to tech-savvy customers.

The scooter now comes with new Silver Oak colour inner panels that differentiate this flagship variant from the rest of the trims to step up the desirability quotient further. Apart from these advanced features, the new variant of TVS Jupiter ZX also offers a new Dual Tone seat with a new design pattern for Zyada style. Additionally, this variant in the TVS Jupiter series also gets a rear backrest to provide added comfort and convenience to the pillion. TVS Jupiter

ZX SmartXonnect is available in two new colour options of Matte Black & Copper Brown.

To establish awareness of the new variant launch the Company has adopted a 360^o approach for promotion through TV commercial, Digital and On-Ground visibility actions across key markets.

TVS Moped has crossed a new milestone of 1.5 Crore Happy customers since its launch in 1980. To celebrate this milestone a new edition ''TVS XL100 Win Edition'' was launched in a Heavy Duty variant and a special colour "coral silk" in the Comfort Variant.

New colour ''Coral Silk'', the premium shade with satin matte finish was introduced in the TVS XL100 Comfort i-Touchstart Variant that has many appealing style features like Stylish Front Visor, Long and comfortable dual tone seat, Cushion Backrest, and stylish Chrome Accents. The TVS XL100 Comfort i-Touchstart comes with an innovative first of its kind in the two-wheeler segment, electric start technology ''i-Touchstart'' (Silent start) with integrated starter generator system and with EcoThrust Fuel Injection Technology which offers 15% more mileage. It also comes with useful features like Mobile charging option and Sync Braking Technology.

The launch of the TVS XL100 Comfort & TVS XL100 Win Edition i-Touchstart variant aims to offer a series of new age features for growing customer needs, promising better comfort through its compact and lightweight design with automatic gear, making these vehicles one of the most affordable and easy to ride two wheelers available in the market.

TVS NTORQ was the Company''s first 125cc product in the Scooter segment. Designed for Gen-Z, TVS NTORQ provides a revolutionary riding experience with cutting edge technology, style and performance. Keeping the core customers in mind, this product

has been provided with many technologically superior features like Bluetooth connectivity - the first ever scooter to have this feature.

In FY July 2021, TVS NTORQ 125 Race XP was launched, the only scooter in the 125cc segment with more than 10 PS power with dual ride modes and first-of-its-kind Voice Assist feature. Having set the direction for connected mobility earlier, with TVS NTORQ 125 Race XP and its SMARTXONNECTTM connectivity platform, TVS Motor Company has yet again set a new industry benchmark by

equipping it with the first-of-its-kind Voice Assist feature. This covers various connectivity functions, including mode change, navigation, console brightness adjustment and Do-not-Disturb (DnD). It brings a new set of benchmarks to get the Indian two-wheeler industry on the accelerated path of connected mobility

In FY 2020-21, TVS NTORQ introduced a special variant in the portfolio - Super Squad Edition, in association with Marvel Studios, inspired from the epic characters of the Marvel Avenger''s series - a first of its kind association in the two-wheeler industry in India. In December 2021, TVS announced the launch of Marvel Spider-Man and Thor inspired scooters under the TVS NTORQ 125 SuperSquad Edition. The new scooters will join the SuperSquad Edition inspired by Marvel Super Heroes - Iron Man, Black Panther, and Captain America launched last year.

Launched in January 2020, TVS iQube marked the foray of the Company into the Electric Vehicle segment. The TVS iQube is a smart mobility solution that promises to deliver a convenient, personalized, connected and future mobility experience.

Over a period of 2 years since launch, the iQube has expanded its presence to 33 cities and 74 dealers across India that offer sales and after sales service for iQube.

The iQube has seen great acceptance from consumers. It has received extremely positive feedback on its dependable performance, reliable range, and silent comfortable driving experience. The connected features like turn-by-turn navigation, live charge status, geofencing and multiple vehicle function alerts have also been greatly appreciated by customers in making their everyday commute much more comfortable and worry free. Customers have found value in the build quality of the iQube that ensures greater safety and durability of the vehicle. The wide presence of network for sales and after sales service gives customers complete peace of mind for vehicle ownership as they have a credible and established touchpoint for their purchase and service needs.

The Company has achieved 19% market share in the highspeed electric scooter segment (FY 2021-22). The Company further intends to consolidate position as a leader in the EV segment through relevant product offerings and increasing our network presence across the country.

The EV industry is the future of commuting and with the iQube, TVS Motor Company has marked a strong presence in this segment. The Company will focus on offering different products under the iQube brand to consumers, so that they have access to latest technology and connected commuting experience at an affordable price.

Domestic Sales

The Company achieved sales of 20.3 lakh units of two wheelers in the domestic market compared to sales of 21.6 lakhs in 2020-21. The Company outperformed the broader Industry which declined by 11%.

In domestic motorcycles, Company achieved sales of 7.02 lakh units and registered a growth of 12% over 2020-21. The TVS Apache, performed better than the Premium motorcycle industry with sale of 3.2 lakh units, posting a decline of only 1% while the Premium Motorcycle industry declined by 24% in 2021-22 against 2020-21.

The Company sold 3.77 lakh units of commuter motorcycles in 2021-22 which is growth of 26.4% over last year. During the H1 period, commuter motorcycles industry grew by 10% and TVS commuter sales grew by 29%, however in H2 as the commuter Two-wheeler industry declined by 21%, TVS commuter Motor Cycle grow by 24.5% over H2 2020-21. This growth was possible due to the launch of TVS Raider 125 in September ''21.

In domestic scooters, the Company achieved sales of 8.56 lakh units and registered a decline of 7% over 2020-21. However, Scooters performed better than Industry with launch of new products like Jupiter 125 and Ntorq 125 special editions.

International Business sales - two-wheeler and threewheeler

The Company''s two-wheeler exports in 2021-22 were 11.76 lakh units and witnessed an improvement with a growth of 43% over 2020-21.

Three-wheeler exports during the year reached 1.63 lakh units and recorded a growth of 41% over 2020-21.

RISKS AND CONCERNS Environmental & Geopolitical Factors:

CoVID remains a potential risk with any resurgence from a new variant leading to hospitalisation and lockdowns that could cause hardship for the population and disruption to the progress of the economic resurgence.

The geopolitical strife while currently localized remains volatile. Economic sanctions and other disruptions to global supply chains could adversely impact the economic recovery across the world.

Country specific risk factors may also impact us including socio economic and political factors in Sri Lanka, Afghanistan, Myanmar, and regulatory framework and duty structure risks in Egypt and Iraq.

Supply Side Factors

Raw material timely availability, shortages of semi-conductor and some EV specific components could lead to impacted financial performance. The Premium segment has dependency on semi-conductor supplies and any gaps could lead to a high financial burden.

Container availability is impacted due to CoVID led disruptions in China. This may result in significant disruption in global supply chain, both in inbound and outbound logistics.

Demand Side Factors

Demand growth is highly dependent on improvement in consumer sentiment. The improvement in sentiment is yet to fully recover to pre covid levels and could be impacted by Inflation, especially energy and food led and any significant adverse development in CoVID.

Monsoon still delivers majority of the irrigation needs of the Indian agriculture, and any deviation from the predicted normal monsoons would impact rural markets significantly. This would be 4^th consecutive year of normal monsoons for India, which has not happened in recent history.

Any further price increases due to additional commodity cost escalation could adversely impact demand. The low and mid segment of the market have low headroom for further price increases.

Less than projected GDP growth and/or consequent jobs growth could adversely impact domestic demand.

Country specific retail prices may be adversely impacted by Currency devaluations due to global inflation and supply disruptions.

RISK MANAGEMENT POLICY

Company''s risk management framework is well embedded and continually reviewed by the Risk Management Committee. It enables the Board, to identify, evaluate and monitor principal risks and where possible, actively mitigate the risks that could affect the achievement of the Company''s target.

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.

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 been approved by the board.

OPERATIONS REVIEW

Total Quality Management (TQM)

Total Quality Management (TQM) remained a key focus in the organization both during the pandemic and post pandemic to mitigate the business risks amidst an uncertain industry environment in the first quarter of the year and to drive the organization towards the growth path in the remaining three quarters.

Strengthening cross functional management using Taskforce and Cross Functional Team (CFT) approaches in specific geography / products helped in retaining and improving market share during the year despite challenges in the market. Dealer transformation team towards establishing TVS retail system have focused on permeating "Focus on process for

results". Digitilization and analytics initiatives are used to continuously improve customer experience processes in the front end. Daily Work Management (DWM) tools, emphasized culture of speed and rigor in execution during the pandemic through ''new normal'' way of working with Daily management by senior leadership team on revenue achievement, working capital management and CoVID-19 risk mitigation.

Supplier excellence team is a continuous program being initiated to extend the TVS production system to suppliers. The objective is to improve maturity levels, Quality and Delivery performance ratings of selected chronic suppliers through establishing sustainable manufacturing system and focusing war on waste. The best practices are horizontally cross deployed. Going forward this program will be further extended to more suppliers and their tiers.

CoP (Community of Practice) groups are informally bound together by shared expertise and passion in a specific area. CoPs of OR, TRIZ and Taguchi methods are being leveraged to drive strategy, solve complex problems quickly, optimise solutions, transfer best practices, develop professional skills and competencies across the Company.

Total Employee Involvement culture was significantly permeated towards profitability of the organization by promoting ''Profit Improvement Plan'' initiatives. Both workmen, executives and managers significantly focused on implementing cost reduction towards operational improvements and waste elimination to support and enable lower spending during the year. Theme of ''waste elimination'' in areas of inventory management and asset management helped the Company to improve its working capital management.

Cost Management

The Company continues to focus on all the elements and drivers of cost. Raw materials, components and conversion cost constitute major element of material cost. The Company pursued process innovation, value engineering, alternate sourcing and import substitution / localization to reduce material costs. During the year, focused working capital management and improved operating performance helped the Company to generate operating free cash flow. Rigorous focus on lean trade stock with the dealers also enhanced the financial health of the channel partners by reducing nonvalue adding costs and improving speed and freshness across the entire supply chain. Waste elimination, productivity improvements and process improvements through multiple means including small scale automation will continue across the supply chain during 2021-22.

In the area of fixed cost, similar systematic approach of deployment of cost reduction is being done, with significant and increasing digitalization of internal processes to eliminate cost and enhance speed.

Research and Development

The Research and Development (R&D) team continued its focus on in-depth customer understanding, technology

development and design innovations. This has led to launch of a performance scooter TVS Jupiter 125 and a sporty motorcycle TVS Raider for both domestic and the global markets.

TVS Jupiter 125 is a scooter with perfect blend of style & practicality. It has progressive neo masculine styling with signature LED lights, diamond cut alloy wheels which makes it premium. TVS Raider is the best in class performance motorcycle with naked street design with hi-tech advanced features such as multiple ride modes, bold Headlamp, ETFI powered intelligo technology, SBT for better braking and other safety features.

TVS Apache RR310 BTO (Built to Order) is the first race machine that can be crafted-to-order, creating opportunities for the more demanding customers. It comes with two predefined customisable performance kits which offers the user to select according to their needs.

The R&D team is gearing up further in developing cutting-edge technologies that are relevant for the near and longterm requirements of the Company''s business plans, emerging mobility needs, providing advanced safety systems and sustainability. Research focus is aligned to chosen fields of science and engineering in order to be future ready. TVS Motor has strong philosophy of Design, Technology and Make in India, leading to world class in-house skill set on technology as well as development of supply chain in India. Deep focus on building core technology for EV such as battery, e-powertrain, Controllers & infotainment is a priority for the Company''s R&D organisation.

TVS Racing, an arm of the Research and Development department, had a very successful season 2021 with 100% podium finish in all the races participated. The collaborative and supportive work between the racing team engineers and product development engineers is fortified for developing relevant technologies using the Motorsports as a greater opportunity.

Digital and AI Technologies

The Company continues to invest in digitalizing Company''s operations from customer facing digital assets, retail management, manufacturing and supply chain and enterprise functions with the aim of improving customer experience, sales performance, dealer engagement, efficiency and transparency in operations.

This year, customer-facing digital products were scaled by introducing capabilities such as virtual store and chatbot on the Company''s website and instrumenting clickstream data in website and consumer applications that help understand prospect needs on these digital products. Further, we leveraged AI technologies to differentiate leads, both digital and dealer walk-ins, based on their propensity to buy. Integrating this AI based classification in our dealer systems and operations have improved follow up effectiveness in retail management. Digital leads were scaled to authorised dealer network for further improving the digital contribution

Benchmarking against internationally embraced standards for data management and governance helped assess areas of opportunity and continued progress. Further, the Company completed an audit of data privacy and has expanded the data governance program to include data protection and privacy for all its operations.

The Company institutionalized digitalization as a key accountability area in all departments to make the aforementioned progress in 2021-22. In order to accelerate the progress, the Company is strengthening the digital and AI accountability area in 2021-22 to scale the company wide digital transformation.

INTERNAL CONTROL AND THEIR ADEQUACY

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

The internal control system is subject to continuous improvement, with system effectiveness, assessed regularly. Information provided to management is reliable and timely. Company ensures the reliability of financial reporting and compliance with laws and regulations.

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 over the use of new technologies that impact the Financial controls and reporting enterprise risk.

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 an Independent audit firm as well as internal audit team and presented to the Audit Committee. Based on the periodical testing, the framework is strengthened, from time to time, to ensure adequacy and effectiveness of Internal Financial Controls.

KEY FINANCIAL RATIOS

As required under Regulation 34 of the Listing Regulations, there was a significant change in Debtors turnover ratio and Debt equity ratio. Details of changes are:

Ratios	UOM	Standalone		Consolidated
Ratios	UOM	2021-22	2020-21	2021-22	2020-21
Debtors Turnover Ratio	Times	22.80	15.60	22.10	15.60
Debt Equity Ratio	Times	0.26	0.06	2.74	2.46
Return on Net worth	%	19.87	15.72	18.40	16.72

to sales. Moreover, the Company has started systematic improvements in websites for international business operations.

Another area of focus in 2021-22 was in improving digitalization in dealer systems. Digital enablement for dealer sales executives, was launched in the domestic network with the capability and process to capture lead information, follow up and with the aid of recommendation systems for the sales staff to improve conversion rates. Similar enhancements have been made by digitalizing the service process through DigiApp for service on mobile that allows dealer service personnel to increase service traffic with the aid of AI classification engines, capture service requests and share service progress to customers. Hyperlocal understanding of customers also helped launch pilots of service specific outlets.

Data engineering to capture real-time information, power BI based visualizations and machine learning models were enhanced in 2021-22 to improve retail management from sales forecasting, marketing effectiveness improvements, dealer performance management and end-consumer sales visibility. Further, the Company has begun a customer experience transformation program to benchmark customer expectations across industries, blueprint a digital-first customer experience and activate the same across electric and ICE businesses.

Given the focus on electric mobility, the Company enhanced the end-to-end digitalization of customer journey in vehicle discovery and purchase of iQUBE from targeted digital marketing, 360^o views and chatbot on website, vehicle booking online, test ride experience and mobile app experience for iQUBE owners. Real time visibility of customer experience online and retail operations, AI and optimization algorithms to match supply with growing demand have been put in place.

The Company completed assessments of Industry 4.0 maturity and supply chain planning effectiveness through external agencies, charted out improvement areas and has begun a supply chain transformation program by piloting machine learning based demand forecasting, sales and operations planning (S&OP) and supplier intelligence automation.

Automation of enterprise operations continued to be an area of focus in 2021-22. The Company launched TVS Sampark, a mobile application to enable self-service for employees for various HR function. Work from anywhere (WFA) matured to the default operating model, connecting team members in multiple locations seamlessly, thereby improving overall productivity and collaboration.

Improving information security continued to be an area of focus by introducing new tools and processes in both IT and OT security. The Company leveraged the cyber-security governance council, consisting of senior management and industry experts, to both expand the coverage of cyber defences and coordination amongst the group companies. The data management and governance office established in 2020-21 continued to make systematic progress in improving capture, quality and governance of data captured.

Improvement in Debtors Turnover Ratio reflects better operational performance. Debt Equity Ratio (Standalone) increased as the Company availed additional borrowings for funding capex and strategic investments.

NON-CONVERTIBLE DEBENTURES

The Company had issued and allotted 5,000 unsecured, redeemable, non-convertible debentures (NCD) of face value of $ 10 Lakhs each on 15^th May 2020 aggregating to $ 500 Crores at 7.5% p.a. and redeemable at the end of 3^rd year. The NCDs were listed with National Stock Exchange of India Limited (NSE) on 19^th May 2020.

Environment, Occupational Health & Safety:

Company''s manufacturing facilities have been certified under Integrated Management System (IMS). ISO 14001 (Environment Management System) and ISO 45001 (Occupational Health & Safety Management System) standards are integrated into a common system making it leaner and more efficient. In addition, our canteen facility at Hosur plant is certified under ISO 22000:2018 (Food safety Management system) & also we are certified as "EAT RIGHT CAMPUS" -5 Star rating, as per guidelines established by Food Safety & Standards Authority of India (FSSAI).

The Company has reduced 18% specific water consumption in last 3 years. The Company''s approach was "Demand side Water management" which best utilizes the available water. The water management framework has - water resource management, water distribution & supply management, management of water by end-users and waste-water management. During 2021-22, the Company repurposed RO rejects in domestic & industrial applications which resulted in fresh water saving of 50 lakh litres. The Company is making itself water positive by incorporating rainwater harvesting that reserve and refine ground water. Renewable power contributes to about 80% in overall share of power consumed. Initiatives taken towards using renewable energy resulted in CO₂ emissions reduction of more than

60.000 tons during 2021-22. Efforts in enhancing Renewable Energy share has been recognised and was awarded "Outstanding Renewable Energy User" by Indian Federation of Green energy. Under Extended Producer Responsibility, the Company collected & recycled 318 tons of post-consumer plastic waste. To improve environment performance in the supply chain, 33 suppliers & recycling agencies were supported during 2021-22.

As a part of continual improvement in safety, close to 700 proactive hazard control measures have been implemented across all plants in Hosur, Mysuru & Nalagarh. The overall "Plant Safety Rating System" (PSRS) score which is a lead measure of safety performance among plants improved from 324 to 352. The Company was recognized as ''Winner in Category 1'' of OHS Award for 2021-22 conducted by Office of JDISH Hosur, HIA & NHRD Hosur chapter.

Periodical safety trainings have been organized and close to

15.000 persons were covered on various safety topics. Towards improving the safety awareness and safety performance of the suppliers, identified Tier-1 suppliers have been covered under scheduled audit by certified OHS professionals through sharing of best practices, identifying hazards and implementing control measures.

For enhanced safety of Electric Vehicle (EV) manufacturing, various engineering and administrative controls have been introduced. For storage, handling and assembly of battery packs, there are temperature controlled dedicated enclosures (that are of 2-hour fire rating), automatic "smoke / flame detection & clean agent suppression system", access control with 24X7 CCTV surveillance and emergency exits. Ensuring ESD safety, especially while handling / having close proximity to sensitive electronic components of Electric Vehicles, ESD safe PPE''s are deployed. Assembly and regenerative End of Line (EOL) Testing processes for EV battery packs and vehicles, are of intrinsically safe design, automated with multi levels of protection during testing. All critical / safety joints are ensured for torque and number of turns, ensuring safety of product and people. Everyone on EV assembly lines is trained and participated in periodic mock drills for creating awareness on safety Know-how and Know-why.

During second wave of CoVID-19 pandemic, Occupational Health Centre (OHC) extended support to all employees and their families by arranging CoVID testing at various hospitals and labs. In addition, support was extended towards arranging beds for employees and members of their families in times of need. Vaccination drive through camps and tie ups with reputed service providers enabled us to achieve 100% vaccination (double dose) for all employees including contractors and their families.

HUMAN RESOURCE DEVELOPMENT (HRD)

Constituents of Human Resources Development framework followed at the Company include Talent Management, Employee engagement, Performance management, Talent Acquisition, Diversity & Inclusion, Total rewards, Learning and Development, Career & Succession planning and Organization Development. Towards sustenance and delivering improved results, these constituents have a structured approach, policies and standard operating procedures which are reviewed and updated periodically. Current and future Skill-based competency development are planned and executed through both in-house programs and globally acclaimed programs, continuing education, challenging project assignments and job rotations. We have successfully expanded as a Company in future technology areas. The newly formed Future Mobility vertical is building talent depth in the areas of connected services, autonomous driving, charging technology etc. The Company is committed on building an Inclusive Workforce. In 2021-22 alone the Company has trained up to 300 managers across levels and across departments about Inclusion. In the journey of HR digitilization, an integrated HRMIS platform "Sampark" was launched to improve employee experience. As a part of SPARK project, the Company has completed re-design and launch of holistic talent process across organisation.

TVS Institute of Quality & Leadership (IQL) was certified as a Corporate University in 2018, by Global Council of Corporate Universities. This institute set on 75 acres campus near Attibele, Karnataka, focuses on cultural capabilities, collective capabilities, supporting strategy delivery and enhancing sustainability.

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 selfreliant rural community.

Over 26 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 $ 17.01 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 2021-22 and the Company has met the CSR spending through the following trusts registered with the Ministry of Corporate Affairs.

($ in Cr)
Sl. No	Name of the Institution	Amount
1	Srinivasan Services Trust	16.76
2	Vidya Foundation	0.25
	Total	17.01

In 2021-22, four Community of Practice (CoPs) were launched for Taguchi Methods, Operations Research (OR), Reliability Engineering and TRIZ (Inventive problem methodology). These CoPs contributed significantly for tangible and intangible business impact. Skills training centre trained 2,584 person in the areas of assembly, fabrication, painting, CKD for IB.

As on 31^st March 2022, the Company had 5161 employees on its roll.

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.

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-

i. that in the preparation of annual accounts for the financial year ended 31^st March 2022, 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, 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 2022 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.

Presently, SST work with communities and governments to empower India''s rural poor through awareness, skills and training programs. SST also do this by helping them find solutions that are sustainable, in areas ranging from economic development, and infrastructure to healthcare and education. SST encourage them to alter their attitudes and take ownership of changes that bring about lasting development

SST is working in thousands of villages spread across Tamil Nadu, Karnataka, Maharashtra, Himachal Pradesh, and Andhra Pradesh. SST has focused on the areas of economic development, health care, education, environment, social, infrastructure and water conservation actively in many villages. So far in the last 26 years, across SST, more than

60,000 women have been organized into Self-Help Group (SHGs), 2,500 village government infrastructures have been repaired and renovated, more than 290 water bodies have been desilted, to name a few of the activities.

SST has won the ''Outstanding Social Innovation'' award at the CK Prahalad Awards 2021 under ''Bottom of the Pyramid''

category. The award is a testament to the efforts SST has put in the last 26 years working in 2500 villages in and around Southern India bringing about holistic development.

Vidya Foundation is a registered Non-Governmental Organisation (NGO) that is executing its efforts in the field of Sports Development, Healthcare and Education.

All of the projects undertaken through SST or other trusts, for its CSR obligations, are within the limit of $ 1 Cr and do not require impact assessment.

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 2021-22 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 2022-23, 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 OF SUBSIDIARIES & ASSOCIATES

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

Subsidiaries

1. Sundaram Auto Components Limited (SACL), Chennai

2. TVS Housing Limited, Chennai

3. TVS Motor Services Limited, Chennai

4. TVS Credit Services Limited, Chennai (TVSCS)

5. Intellicar Telematics Private Limited, Bengaluru (Intellicar)

6. TVS Electric Mobility Ltd, Chennai (From 13.12.2021)

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

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

9. PT TVS Motor Company Indonesia, Jakarta.

Subsidiaries of TVSCS

10. Harita ARC Private Limited, Chennai

11. TVS Housing Finance Private Limited, Chennai

12. TVS Two-wheeler Mall Private Limited, Chennai

Subsidiaries of TVSM Singapore

13. The GO Corporation, Switzerland (GO AG), (From 16.09.2021)

14. Swiss E-Mobility Group (Holding) AG, Switzerland (SEMG) (From 27.01.2022)

15. The Norton Motorcycle Co Limited, UK

16. TVS Digital Pte Ltd, Singapore (From 20.05.2021)

Subsidiaries of GO AG (From 16.09.2021)

17. EGO Movement Stuttgart, GmbH, Germany

Subsidiaries of SEMG (From 27.01.2022)

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

19. Colag E-Mobility GmbH, Germany

Subsidiaries of SACL

20. Sundaram Holding USA Inc, Delaware, USA

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

22. Components Equipment Leasing LLC, South Carolina, USA

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

24. Premier Land Holding LLC, South Carolina, USA

Subsidiary of Intellicar (From 10.11.2021):

25. Intellicar Singapore Pte Ltd, Singapore

Associates

1. Emerald Haven Realty Limited, Chennai and its eight subsidiaries

2. Ultraviolette Automotive Private Limited, Bengaluru

3. Tagbox Solutions Private Limited, Bengaluru

Associates of TVS Digital Pte Ltd:

1. Tagbox Pte Limited, Singapore

2. Predictronics Corp., USA

3. Scienaptic Systems Inc., USA

4. Altizon Inc, USA

Post 31^st March 2022, the following acquisitions were made

by the Company through its overseas subsidiaries:

(1) EBCO Limited, UK, dedicated for producing and distributing electric bikes designed for the rapidly expanding British e-bike market, through TVS Motor (Singapore) Pte Ltd. (70% stake)

(2) Alexand''Ro Edouard''O Passion Velo Sarl ("Passion Velo"), primarily engaged in the sale of e-bikes as well as e-bike accessories through Swiss E-Mobility Group (Holding) AG. (100% stake)

The Company has also acquired 1.81 % stake in Roppen

Transportation Services Private Limited ("Rapido'''').

PERFORMANCE OF SUBSIDIARIES

Sundaram Auto Components Limited (SACL)

The total income of SACL was $ 608 Cr in the current year as against $ 463 Cr in the previous year 2020-21.

SACL earned a profit before tax of $ 4.30 Cr after incurring an exceptional cost of $ 6 Cr during the year 2021-22 as against loss of $ 19.08 Cr in the previous year after incurring an exceptional cost of $ 9.36 Cr. Exceptional cost includes separation cost. SACL is a wholly owned subsidiary of the Company.

TVS Housing Limited (TVSH)

TVS Housing Limited is a wholly owned subsidiary of the Company.

TVS Motor Services Limited (TVS MS)

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

TVS MS now holds 0.54% only in TVS CS post redemption of its preference shares held by the Company and TVS MS continues to be a wholly owned subsidiary of the Company.

TVS Credit Services Limited (TVS CS)

TVS CS is the retail finance arm of the Company for financing of two wheelers.

During the year 2021-22, TVS CS''s overall disbursements registered at $ 12,533 Cr as compared to $ 8,627 Cr in the previous year registering growth of 45%. During the year under review, the assets under management are around $ 13,911 Cr as against $ 11,200 Cr during the previous year registering a growth of 24%. Total income during the financial year 2021-22 increased to $ 2,731 Cr from $ 2,241 Cr during the financial year 2020-21, an increase of 22% over previous year.

The profit before tax after exceptional items for the year stood at $ 151 Cr as against $ 105 Cr during the previous year registering a growth of 44%.

The following companies are the subsidiaries of TVSCS.

1. Harita ARC Private Limited, Chennai

2. TVS Housing Finance Private Limited, Chennai

3. TVS Two-wheeler Mall Private Limited, Chennai

All the above subsidiaries are yet to commence their operations.

During the year, TVS CS has divested its entire stake in Harita Collection Services Private Limited, TVS Micro Finance Private Limited and TVS Commodity Financial Solutions Private Limited.

Intellicar Telematics Private Limited (Intellicar)

Intellicar is a wholly owned subsidiary of the Company. Intellicar provides advanced fleet management solutions through an integrated platform powered by IoT technologies coupled with strong analytics and data management capabilities. It will help

accelerate the ongoing digital initiative of the Company that are targeted at delivering enhanced customer experience. Total income of Intellicar was at $ 21.6 Cr in the year 2021-22 as against $ 7.9 Cr in the previous year 2020-21. Intellicar made a profit before tax of $ 0.96 Cr in the year

2021- 22 as against loss of $ 4.8 Cr in the previous year 202021 and is forecasting strong YoY financials with material growth in both revenue and ARR (Annual Recurring Revenue) for

2022- 23.

TVS Electric Mobility Ltd, Chennai (TVSEM)

During the year, the Company has incorporated TVSEM on 13^th December 2021, to undertake Electric Mobility business. The entire shares of TVSEM have been subscribed by the Company and hence, TVSEM is a wholly owned subsidiary of the Company.

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, through its subsidiary TVS Digital Pte. Ltd. (TVSD) is being leveraged to operationalize a digital technology organization focused on delivering high quality digital solutions that address real life business challenges by harnessing the power of Analytics, Artificial Intelligence, Augmented Reality, Machine Learning and Internet of Things. The solutions and offerings are focused in the areas of automotive and fintech industries that have direct relevance to the Company and its subsidiaries and are scalable and monetizable in the digital economy.

TVS Motor (Singapore) Pte Limited had made investments aggregating USD 17.9 Mn in Altizon Inc (USA) in the area of Digital Manufacturing focused on Digitizing Legacy Factories, Predictronics Corporation (USA) in the area of Digital Manufacturing focused on Predictive Maintenance, Scienaptic (USA) in the area of Credit Services focused on Credit Decisioning, Underwriting and Collections and in Tagbox (Singapore) in the area of Fleet Management focused on Granular Asset Tracking.

The Company''s invested entities have performed very well with Altizon, Intellicar and Tagbox registering double-digit revenue growth, while all invested entities delivered YoY multiples in ARR growth coupled with improved operational and financial metrices compared to the previous financial year. Thanks to the growth in digital technologies driven by both CoVID-19 and booming digital economy, it is expected that the invested start-ups will continue to deliver material growth in FY 2022-23 including financial and operational metrices while continuing to add value to the ongoing digital transformation initiatives in our group companies.

During the year, the Company has invested a sum of SGD 199.62 Mn in the ordinary shares of TVS Motor (Singapore) Pte Limited.

TVS Digital Pte Ltd, Singapore

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

PT. TVS Motor Company Indonesia (PT TVS)

PT TVS posted an Operating PBT of $ 17.69 Cr for the full year.

PT TVS recorded sales of 11,094 nos. of three wheelers as against 5,863 nos. of sales during the previous year (growth of 89%) and 86,196 nos. of two wheelers as against 58,901 nos. in last year, thereby registering a growth of 46%.

The growth in sales numbers, coupled with effective management of fixed costs enabled company to achieve EBITDA of $ 38.53 Cr as against $ 20.08 Cr of last year.

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

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

The acquisition reaffirms the Company''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 e-bike retain chain M-way in Switzerland. By combining its extensive physical network and e-commerce platform with two online platforms and 31 physical stores strategically located across Switzerland.

SEMG has strong omnichannel distribution and aspirational brands, including Cilo, Simpel, Allegro and Zenith-Bikes. The Company enhanced the product range further and scale the Company in the DACH region and beyond. SEMG is No. 1 in Switzerland with a market share of 20%. During last year SEMG reported revenue of $ 546.72 Cr and PAT of $ 43.39 Cr and expected revenue for the current financial year is around USD 100 Mn. SEMG is expanding further into DACH region. 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 merging 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 will touch 25 bn in 5 years.

This acquisition of a profitable and growing platform with the opportunity to drive further value will augur well for the Company in the long run.

The GO Corporation, Switzerland (GO AG)

During the year, the Company acquired majority stake in 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, with technical refinements such as a powerful mid-motor including a torque sensor, a USB port on the removable lithium-ion battery and an LED light that automatically switches on at dusk. The unique and innovative design philosophy has earned the company multiple awards, including the prestigious Red Dot 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 e-scooters. 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 2021-22, The Norton Motorcycle Co. Limited (UK) (Norton) which was acquired by the wholly owned subsidiary TVS Motor (Singapore) Pte. Limited in April 2020, has established a modern, state of the art manufacturing facility, capable of producing high end premium motorcycles, at Solar Park, Solihull, West Midlands, UK. Norton has firmed up its product plan with a series of new products to be launched in coming years catering to various segments of the premium motorcycle market.

Production of motorcycles at the newly established facility has commenced and they are expected to be in the market very soon. Key management positions have been filled up and the organisation has been strengthened through recruitment of manpower with required skills & talent in all functions. Norton will continue its focus on producing products with high quality standards, establishing a robust supply chain & distribution network in its journey of relaunching this iconic brand to its rightful place at the global level.

Sundaram Holding USA Inc. (SHUI) & its subsidiaries

Sundaram Holding USA Inc. (SHUI), a company established under the applicable provisions of Laws of The United States of America, is owned by Sundaram Auto Components Ltd (SACL) (wholly owned subsidiary of the Company) and Sundaram-Clayton Limited (SCL) (holding company 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. Sundaram-Clayton USA LLC, South Carolina, USA

4. Premier Land Holding LLC, South Carolina, USA

During the year 2021-22, SCL has invested a sum of USD 23.95 Mn in the ordinary shares of SHUI. SCL and SACL holds 49.7% and 50.3% respectively of the total capital of SHUI as on 31^st March 2022.

Post CoVID-19, SHUI has restarted its operation and started supplies to customers during first half of 2021-22.

Associates:

Emerald Haven Realty Limited (EHRL)

During the year, EHRL revenue increased by 46% and sales increased by 6% despite adverse impacts due to the second wave of CoVID-19 and the lockdown restrictions imposed in May / June''21, severe cyclone and floods in November''21.

The Company also worked on various value engineering measures to control operating and fixed costs, which helped in the operating performance of the Company.

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.

Ultraviolette Automotive Private Limited (UV)

UV incurred a loss of $ 2.54 Cr in the year 2021-22 as against loss of $ 1.61 Cr in the previous year 2020-21. UV is a start-up company engaged in developing electric mobility solutions.

Tagbox Solutions Pvt Ltd, India /Tagbox Pte Ltd, Singapore (Tagbox)

Tagbox is a start-up company which provides an IoT based monitoring solution to predict and prevent unfavourable events, optimize reefer fleet and routes and manage inventory. The total income of Tagbox was at $ 7.24 Cr in the current year as against $ 6.2 Cr in the previous year

2020- 21. Tagbox incurred a loss of $ 2.71 Cr in the year

2021- 22 as against the loss of $ 0.2 Cr in the previous year 2020-21.

Predictronics Corp, (Predictronics) USA

Predictronics is a start-up company engaged in predictive analytics solution for critical assets, vertical software for industrial robots and consulting services. Revenue of Predictronics was at $ 9.37 Cr in 2021 as against $ 7.8 Cr in the previous year 2020. Predictronics made a loss of $ 2.27 Cr in the year 2021 as against a loss of $ 4.6 Cr in the previous year 2020.

Scienaptic System Inc (Scienaptic), USA

Scienaptic is a start-up company engaged in explainable AI powered Advanced underwriting decisioning platform. Total income of Scienaptic was at $ 28.9 Cr in 2021-22 as against $ 26.7 Cr in the previous year 2020-21. Scienaptic incurred a loss of $ 24.1 Cr in the year 2021-22 as against loss of $ 19.3 Cr in the previous year 2020-21.

Altizon Inc, (Altizon) USA

Altizon is a start-up company which provides industrial IoT solutions and helps enterprises use machine data to drive business decisions. Total income of Altizon was at $ 7.6 Cr in the current year as against $ 4.1 Cr in the previous year

2020- 21. Altizon incurred a loss of $ 8.7 Cr in the year

2021- 22 as against loss of $ 8.6 Cr in the previous year 2020-21.

8. CONSOLIDATED FINANCIAL STATEMENTS

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 business hours as mentioned in the Notice of AGM.

The consolidated Profit Before Tax of the Company and its subsidiaries & associates amounted to $ 1,067 for the financial year 2021-22 as compared to $ 822 Cr in the previous year.

9. DIRECTORS & KEY MANAGERIAL PERSONNEL

Special Recognition for Mr Venu Srinivasan

Mr. Venu Srinivasan was conferred the Padma Bhushan by the President of India. The award is conferred for "distinguished service of a high order" and is one of the highest civilian awards of the Republic of India.

Mr Venu Srinivasan is also the AUTOCAR MAN OF THE YEAR 2021.

Appointment of Chairman Emeritus and Chairman

Mr Venu Srinivasan was designated as Chairman Emeritus effective 1^st April 2022 by the Board, at its meeting held on 7^th February 2022 and continues to be the Managing Director of the Company.

At the same meeting, the Board appointed Prof Sir Ralf Dieter Speth, Non-Executive Director as Chairman of the Board, effective 1^st April 2022.

Elevation of Mr. Sudarshan Venu as Managing Director

The Board of Directors at its meeting held on 5^th May 2022 elevated Mr. Sudarshan Venu as Managing Director of the Company, effective that date, on the recommendation of Nomination and Remuneration Committee at its meeting held on 29^th April 2022.

Mr Sudarshan Venu has been charting the future of the Company and has made it the most awarded two-wheeler Company. He has played a pivotal role in the Company''s growth in India and key international markets, including Asia, Africa and more recently Europe. Considering all his dedicated efforts, the Board decided to elevate him as Managing Director.

Directors'' appointment / re-appointment / cessation

During the year under review, Mr Prince Asirvatham, tendered his resignation as a Independent Director of the Company with effect from 20^th August 2021 due to health reasons.

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. Mr H Lakshmanan and Dr. Lakshmi Venu, Directors are liable to retire by rotation, at the ensuing AGM. However, Mr H Lakshmanan, director, has expressed his desire not to offer himself for re-appointment at the ensuing AGM, due to old age. In terms of Section 152 of the Act, 2013, that, if the vacancy of the retiring director was not filled up, it would be required to be resolved expressly by the shareholders not to fill the vacancy of the retiring director.

As, Mr H Lakshmanan has expressed his desire not to offer himself for re-appointment at the ensuing AGM, the composition of the Board has reduced below the minimum level of having 2/3rd Directors liable to retire by rotation.

Hence, it has been proposed to re-appoint Mr Venu Srinivasan, Chairman Emeritus and Managing Director (CE & MD) as a Director liable to retire by rotation, who was appointed earlier as a non-retiring Director at the eighth Annual General Meeting (AGM) held on 11^th September 2000, on the recommendation of the Nomination and Remuneration Committee at its meeting held on 29^th April 2022.

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. Further, the Board at its meeting held on 5^th May 2022, approved the re-appoinment of Mr Sudarshan Venu as Managing Director (MD) for a further period of five years from 1^st February 2023 to 31^st January 2028, in accordance with the Act, 2013 and the Listing Regulations on such terms and conditions of his re-appointment including remuneration, as recommended by the Nomination and Remuneration Committee of directors at their meeting held on 29^th April 2022. The shareholders approval are being sought through Postal Ballot.

It may be noted that, the approval of the Central Government is required for his re-appointment as MD of the Company in terms of Schedule V to the Act as he is a person resident outside India.

Independent Directors (IDs)

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

On 5^th March 2019, the IDs viz., M/s. T Kannan, C R Dua and Hemant Krishan Singh were reappointed for the second term of 5 consecutive years from 14^th July 2019. Mrs Lalita D. Gupte and Mr R Gopalan, were appointed as Additional and Independent Directors for a term of 5 years by the board at its meeting held on 23^rd October 2018 and 30^th April 2019 respectively and the same were approved by the shareholders at the AGM held on 22^nd July 2019. The terms of appointment of IDs include the remuneration payable to them by way of fees and profit-related commission, if any.

Mr Kuok Meng Xiong was appointed by the Board on 24^th March 2021 as NE-ID for a term of five consecutive years effective that date and the same was approved by the shareholders at their 29^th AGM held on 29^th July 2021.

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 meet 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. 88 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 18^th March 2022.

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 prescribed by the Nomination and Remuneration Committee (NRC) for evaluation of Non-IDs and Executive Directors viz., M/s Venu Srinivasan, Sudarshan Venu, K N Radhakrishnan and Non-IDs NonExecutive Directors viz., Prof. Sir Ralf D Speth, H Lakshmanan, and Dr. Lakshmi Venu, Directors and also of Chairman of the Board and the Board as a whole, for the year 2021-22.

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 the Chairman of the Board after considering his performance vis-a-vis benchmarking the performance of the Company with the industry under the stewardship of the Chairman.

The IDs also placed on record, their appreciation of the Chairman''s appropriateness and proactive nature of his interventions for developing strategic plans aligned with the vision and mission of the Company; aggressive vision on electric mobility, succession plan for the Company''s sustainability in challenging global environment; and provides exceptional and critical leadership and provides robust leadership for the Board to take on diverse challenges in a disruptive market, contributing to clean / green mobility.

They also commended his high level of integrity & objectivity and very judicious approach, and brings his vast experience to bear on steering Board discussions and decisions for the benefit of the Company and Shareholders.

c) Board

The IDs also evaluated the Board''s composition, size, the mix of skills and experience, meeting sequence, the effectiveness of discussion, decision making, and followup 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, Information Technology, Administration and International trades and is well balanced with the addition of directors, with domestic and international experience and also from new industries

The IDs were always kept involved through open and free discussions and provided additional inputs in

emerging areas being forayed into by the Company; and also noted that the board had timely information and full disclosures for meaningful and open discussions at all meetings and forums.

They also expressed their satisfaction with presentations on major litigations, a regular update on the performance of Subsidiaries, EV businesses which have been fairly made to all IDs with open door discussions.

The Company''s management is well guided by the NonExecutive 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.

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 Venu Srinivasan, Chairman Emeritus and Managing Director, Mr Sudarshan Venu, Managing Director, Mr K N Radhakrishnan, Director & CEO, Mr K Gopala Desikan, Chief Financial Officer and Mr K S Srinivasan, 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. Nomination and Remuneration Policy was approved by the Board at its meeting held on 23^rd September 2014 and amended from time to time to maintain consistency with

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 Independent Directors

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 questionnaires.

Independent Directors

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.

- 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 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 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 2021-22, the Board met six times and details of the meetings are provided as part of Corporate Governance Report prepared in terms of the Listing Regulations.

Scheme of Amalgamation and Arrangement - TVS Group

A memorandum of family arrangement was executed on 10^th December 2020, between the TVS Family for aligning and synchronizing the ownership of shares in various companies / business with the management of the respective companies, as is currently being done.

In this regard, a Composite Scheme of Amalgamation and Arrangement (Scheme) was filed with NCLT by T V Sundram Iyengar & Sons Private Limited, the ultimate holding Company and an order was pronounced on 6^th December 2021 sanctioning the Scheme.

Consequent to the Scheme being effective, Sundaram Industries Private Limited and Southern Roadways Private Limited got merged with TVS Sundram Iyengar & Sons

Private Limited and the equity shares held by T V Sundram Iyengar & Sons Private Limited and its subsidiaries viz., Sundaram Industries Private Limited and Southern Roadways Private Limited, in Sundaram-Clayton Limited (SCL) have been vested with TVS Holdings Private Limited effective 4^th February 2022.

TVS Holdings Private Limited thus became the ultimate holding company effective that date.

10.AUDITORS

Statutory Auditors

The Company at its 26^th AGM held on 7^th August 2018 reappointed M/s V. Sankar Aiyar & Co., Chartered Accountants, Mumbai, having Firm Registration No. 109208W 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 26^th AGM till the conclusion of 31^st 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 final year in the second 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 the Statutory Auditors of the Company for the year

2022-23.

The Auditors'' Report for the financial year 2021-22 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 2021-22, given by M/s S Krishnamurthy & Co., Company Secretaries, 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 5^th May 2022 has re-appointed M/s S Krishnamurthy & Co., Company Secretaries, Chennai having Unique Identification Number P1994TN045300 allotted by the Institute of Company Secretaries of India as Secretarial Auditors for the financial year 2022-23.

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 components manufactured by the Company 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 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 the Cost Auditor for conducting Cost Audit for the financial year 2022-23.

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 $ 8 lakhs has been fixed by the Board as remuneration in addition to reimbursement of applicable taxes, travelling and out-of-pocket expenses payable to him, for the financial year 2022-23, 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 2020-21 on 26^th August 2021 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 is given as Annexure VIII to this Report.

The Director & CEO 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 2022.

12. BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34 of the Listing Regulations, the Business Responsibility Report for the year 2021-22 describing the initiatives taken from an environment, social and governance perspective, in the prescribed format is given as Annexure VII to this Report and is available on the Company''s website in the link as provided in page no. 88 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. 88 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 2022.

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. 88 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 Annual Report.

Details of related party transactions:

There is 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 details of loans and guarantees under Section 186 of the Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, for the financial year 2021-22 are given as Annexure VI to this Annual Report. On loans granted to the Employees, the Company has charged interest as per its policy, in compliance with Section 186 of the Act, 2013.

Please refer note no. 3 to Notes on accounts 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.

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

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.

16.ACKNOWLEDGEMENT

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.

For and on behalf of the Board of Directors

Chennai PROF. SIR RALF DIETER SPETH

5^th May 2022 Chairman

Mar 31, 2021

DIRECTORS'' REPORT TO THE SHAREHOLDERS

The Directors have pleasure in presenting the twenty ninth annual report and the audited accounts for the year ended 31^st March 2021.

1. COMPANY PERFORMANCE

The Company registered sales of 29.3 lakh units of two wheelers in 2020-21.

2020-21 tested the strength of the very fundamentals of India, its institutions, administrative and healthcare system and even its social, moral and economic fibre. The choices between lives and livelihood needed to be made every day, by individual citizens, organizations, institutions and the entire administrative system. The nationwide 42 day lockdown a key response, led to GDP contraction of 24% in the first quarter. But with the easing of the active cases and the Government intervening with multiple initiatives, recovery in Quarter 2 was ahead of estimates with a 7% GDP decline instead of the estimated 11% decline. The Q3 & Q4 saw the GDP return to positive territory, posting gains of 0.5% and 1.6%, bringing the full year to a 7.5% decline.

The domestic two wheeler industry declined by 13% in 2020-21 over 18% decline during 2019-20. The two wheeler industry saw sharp changes in growth momentum over the quarters. Q1 2020-21 contracted due to the pandemic with a 74% decline and when the markets opened up, registered 0% growth in Q2, 13% in Q3 and 24% growth in Q4.

Compared to 2W industry decline of 13%, Company''s performance in domestic was at 10% decline in sales volume of 2020-21.

In the International Business, exports of two wheelers in 2020-21 were at 7.6 lakh units with a growth of 12% over 2019-20. Company exited the month of March 2021 with an all-time high of 1,05,282 two wheelers exports resulting in Q4 volume of 2,84,098 with a growth of 74%. Threewheeler exports during the year reached 1.15 lakh units with a decline of 29% over 2019-20.

Sales revenue of spare parts grew by 1% in domestic and 41% in exports.

In course of the transition to BS VI compliant technology, TVS Motor was the first and only company to launch dual Fi platforms catering to consumer use cases - Eco Thrust Fuel injection (ETFi) for enhanced fuel efficiency and Race Tuned Fuel injection (RTFi) for enhanced throttle response. Across the portfolio, consumer insights were converted to thoughtful improvements that went beyond BS VI, like ride modes for Apache or additional underseat storage for Jupiter. This enhanced portfolio was also taken to consumers in a much loved corporate campaign "Hum Banaye Jo Aapka Dil Chahe !", this focused on TVS DNA of customer centric innovation.

Continuing with customer centric innovation beyond the BS VI transitions, saw new launches like TVS NTORQ 125

super squad edition, RTR 200 4V with riding modes, Jupiter ZX Disc intelliGo and TVS XL100 Win Edition. During the year 2020-21, Company''s products bagged 10 awards, of which Moped won 5 awards, Motorcycles won 3 awards and Scooter 2 awards.

The Company also ensured systematic, company-wide initiatives to control costs, prioritize capex, improve productivity and above all improve health of cash flows across the extended enterprise, unlocking significant potential for velocity and financial returns.

Total income of the Company including other income was $ 16,783.51 Cr in the current year 2020-21 as against $ 16,455.44 Cr in the previous year. Profit before tax (PBT) was $ 826.24 Cr in the current year as against $ 754.41 Cr in the previous year (after exceptional item of $ 32.33 Cr). Similarly, Profit after tax (PAT) was $ 612.04 Cr in the current year as against $ 592.25 Cr in 2019-20.

The Company has always recognized its social responsibility as an integral and critical part of its value system. The response to CoVID-19 needed to be widespread and collective. The Company and its CSR arm, the Srinivasan Services Trust (SST) undertook the following initiatives:

â¢ 10 lakh masks, 1.5 lakh gloves were handed to Government agencies.

â¢ 12.5 lakh Food Packets were distributed.

â¢ 30,000 man-hours of community service.

â¢ 4122 Villages covered with sanitization drives across states.

â¢ Donated Disinfectant Mist Spray Cannon mounted truck to the Corporation of Chennai.

â¢ Contributed to PM CARES fund, CM Funds of Tamil Nadu and Karnataka.

Towards the employees & their families:

â¢ Crisis Management task force deployed to ensure business continuity plans.

â¢ 2000 employees were seamlessly migrated to work from home with no loss of productivity.

â¢ TVSM Health Centre has been operating 24/7.

â¢ Employees & families provided sensitization about safe practices at home.

â¢ Best Practice SOPs designed and deployed for resumption of operations.

Towards the extended enterprise:

â¢ The supplier / dealer claim payment settlements were expedited.

â¢ Significant benefits in the form of interest waiver schemes were introduced.

â¢ Training for Suppliers, Indian and International dealers and almost 25,000 of their staff on best practices and SOPs in order to prepare for the opening of dealerships post lockdown.

Towards consumers:

â¢ Service Workshops and Road Side Assistance (RSA) programs were kept operational.

â¢ Over 100 service camps conducted for frontline law & order and healthcare professionals.

â¢ Ongoing communication on how to take care of the 2-wheeler through the lockdown(s).

â¢ 100% ongoing adherence to strict Sanitization Protocol for all dealership facilities.

2. FINANCIAL HIGHLIGHTS

â Year ended ^Details 31-03-2021		Year ended 31-03-2020
SALES Quantitative	(Numbers in lakhs)
Motorcycles	13.42	13.63
Mopeds	6.26	6.51
Scooters	9.61	10.75
Three Wheelers	1.24	1.74
Total vehicles sold	30.53	32.63
Financials	(Rupees in Crores)
Revenue from operations	16750.54	16423.34
Other Income	32.97	32.10
Profit / loss before Depreciation, Finance Costs, Exceptional items and Tax Expense	1461.52	1377.96
Less: Depreciation / Amortization / Impairment	493.68	489.03
Profit /loss before Finance Costs, Exceptional items and Tax Expense	967.84	888.93
Less: Finance Costs	141.60	102.19
Profit /loss before Exceptional items and Tax Expense	826.24	786.74
Less: Exceptional items	-	32.33
Profit /loss before Tax Expense	826.24	754.41
Less: Tax Expense (Current & Deferred)	214.20	162.16
Profit /loss for the year	612.04	592.25
Comprehensive Income / (loss)	107.09	(118.23)
Total	719.13	474.02
Less: Dividend on Equity Shares	166.28	166.28
Less: Dividend Distribution Tax	-	33.75
Balance carried forward	552.85	273.99

3. DIVIDEND

The Board of Directors of the Company (the Board) at their meeting held on 28^th January 2021, declared a first interim dividend of $ 2.10 per share (210%) for the year 2020-21 absorbing a sum of $ 99.77 Cr. The same was paid on 12^th February 2021.

The Board at its meeting held on 24^th March 2021 declared a second interim dividend of $ 1.40 per share (140%) for the year 2020-21 absorbing a sum of $ 66.51 Cr. The same was paid on 9^th April 2021.

Thus, the total amount of both dividends for the year ended 31^st March 2021 aggregated to $ 3.50 per share (350%) on 47,50,87,114 equity shares of $1/- each absorbing $ 166.28 Cr. From 1^st April 2020, the dividend income earned by the shareholders will be taxable in their hands at the rates applicable to them.

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.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENTS Two-wheeler

The domestic two wheeler industry recorded a sale of 15.1 Mn units in 2020-21, a decline of 13% from 17.4 Mn units of 2019-20. It witnessed a decline of 74% in Q1. However, for the rest of the year, the industry revived and grew by 11% compared to same period previous year. This growth was primarily led by a resilient rural economy which was less affected due to the pandemic, supported by good monsoon and agriculture growth.

The scooter industry declined by 20%, with 4.5 Mn units sold in 2020-21 over 5.6 Mn units in 2019-20. The category share declined to 29.7% in 2020-21 from 32% in 2019-20. This was primarily led by higher spread of CoVID-19 cases in urban areas, stringent lockdown norms and implementation of work from home.

The motorcycle industry declined by 11% over last year. The category share of motorcycle grew by 1.9% to 66.3% in 202021. The premium motorcycle sales declined by 14% from 1.61 Mn units in 2019-20 to 1.39 Mn units in 2020-21 maintaining category share at 9.2%. The commuter motorcycle category share grew 1.5% to 51.5% while volumes declined by 11% to 7.8 Mn units in 2020-21 from 8.7 Mn units in 2019-20.

In international market, two wheeler industry declined by 7% in 2020-21 over 2019-20. Industry was adversely impacted by the CoVID-19 related lockdowns of the demand markets and also by supply side factors which impaired the speed to restore export supplies due to CoVID-19 during Q1. However stable

TVS Jupiter ZX Disc intelliGO was launched in February 2021, making it the first 110cc scooter to have Stop-go technology (idle stop / start). TVS Jupiter ZX Disc intelliGO further enhances the Zyada philosophy by reinstating Zyada Convenience, Zyada Mileage and also enhancing technologically advanced imagery. The non alloy wheel variant was launched in October 2020, catering to more price sensitive customers who are looking for affordability and utility led features and has received positive response across markets.

To sustain the strong brand association and to establish Jupiter offers better features and higher value than others in the segment campaign named, ''Har Scooter se Zyada'' was aired with high frequency during festive season and was again promoted in Q4 for sustained mind share.

TVS Apache Series has been a pioneer in race performance and introduced many industry firsts and best-in-class offering. As a brand, keeping \ in view of the evolving | customer needs, it has proudly upheld the tradition this year

price of crude oil, steady rates and availability of forex and continued growth in Africa propelled the growth of exports in the remaining quarters of 2020-21.

Three-wheeler

Overall three wheeler small passenger industry (3 plus 1 segment) declined by 41% in 2020-21 (from 7.46 lakh units in 2019-20 to 4.42 lakh units in 2020-21). Domestic industry declined by 77% and exports market declined by 22% in 2020-21 over last year.

BUSINESS OUTLOOK AND OVERVIEW

Directors are optimistic about the future but are concerned about the evolving CoVID-19 scenario across the country and it''s effects on consumer demand.

The second wave of rising cases could adversely impact customer sentiment, however a more measured approach, by regulators, adopting more targeted, localized responses and increased vaccination should see minimized disruption and a swift recovery in the economy. Post normalization, it is also expected that travel and tourism will bounce back in 2021-22 as most of the surveys indicate customers willingness to travel once normalcy returns. This is likely to result in a 10-11% growth in service sector.

On the rural front, 2021-22 is likely to witness a normal monsoon and hence agriculture is expected to grow by 3.5%-4%. Since much of the sale of two wheelers are in semi urban and rural areas, two wheeler industry could see some benefit from this.

Despite the rising second wave of active cases, the Company remains confident that adverse impact would be lower and bounce back swifter. This outlook of cautious optimism is built upon, on one hand, the Company''s own supply chain preparedness and on the other, a belief that the administrative responses would be far more measured, targeted and widespread vaccination drive to "Break the Chain".

Social Distancing and Work From Home practices will continue. These new long-term practices of social distancing could see consumer preferences change towards personal mobility leading to new demand in the Two wheeler industry. The Company is cognizant of this opportunity, and well poised to leverage this opportunity with its superior product offerings across the widest range of personal mobility needs.

Export of two wheelers is likely to see a growth during the year fueled by consumption growth and stable economic & political situation in all operating geographies. Stable crude oil prices will have a positive impact on export market growth in oil dependent economies of Africa and LATAM.

Strategic partnership with BMW Motorrad

The Company has a strategic partnership with BMW Motorrad to develop and manufacture sub-500cc bikes both for domestic and global markets. The Company has produced 83,592 units of BMW 310cc motorcycle till date.

New Product Launches and Initiatives

During the year 2020-21, the following new products and variants were launched.

TVS Jupiter, reached 4 Mn happy customers during FY''20-21.

To continue the journey of providing "Zyada ka Fayda" ZX Disc intelliGO and a sheet metal wheel variant was introduced in this period.

as well. The Apache series achieved global sales milestone of 4 Million in the month of October 2020.

The customer experience is further enhanced by the presence of exquisite brand experience program with Apache Owners Group (AOG), APP (Apache Pro Performance), Apache Riding Experience (ARE), TVS Racing Training School, Women''s Training and Selection and One Make Championship, which continue to develop aspiration. The brand witnessed it''s never seen before increase in customer experience program with 172 activities in just 4 active months.

Leading the 200cc sports segment with its technological prowess, the TVS Apache RTR 200 4V was introduced with ride modes. This is not just an industry first but also a technology usually seen in 650cc and above motorcycles. The three ride modes are "Sport, Urban and Rain", with varying acceleration and ABS response; all from the same engine. Another development this year was upgrade of

TVS XL100 HD i-TouchStart crossed a new milestone of 4 million customers since its launch in 2015. The year 2020 was the 40^th anniversary year of TVS mopeds and a special | edition variant - "Win Edition" was launched to mark this celebration.

Win edition was launched with many appealing style features including a new color ''Delight Blue'', chrome finish mirrors, metal shield for the platform, diamond pattern seats and chrome style elements. HeavyDuty series has been the most popular one among XL customers and the new edition would add more interesting style option for them to choose from. This variant comes with useful features like easy on-off combo switch and USB mobile charging. Also, the Company has introduced entry level variants with kick start to provide affordable option to the customers with BS VI technology benefits.

Launched in January 2020, TVS iQUBE marked the foray of Company into the Electric Vehicle segment. The TVS iQUBE is a smart mobility solution that promises to deliver a convenient,

personalized, connected and future mobility experience. It comes equipped with

SmartXonnect, advanced features like Geo-fencing, Ride Statistics, Telematics, Remote charge assist and Navigation assist along with 117 connected features. With a top speed of 78 kmph, a range of 75 Km in a single charge and features like Q-Park assist, the TVS iQUBE redefines style, comfort and riding experience. A dedicated public charging ecosystem spanning across 10 dealerships in Bengaluru further enhances customer ease and experience.

With TVS iQUBE, the Company also leveraged digital channels for vehicles booking and sales. A digitally enabled purchase process allows seamless home charging unit installations providing a truly hassle-free experience to the customers. The product has seen extremely encouraging response from the customers. With the increased focus on 18

Apache RTR 160 4V with 17.63 PS of power, making it the most powerful 160cc motorcycle.

Leading the two wheeler industry with another big breakthrough, was the launch of first ever Augmented Reality experience by a two wheeler OEM- TVS ARIVE. This app allows customers to view the TVS Apache series motorcycles right before their eyes, from the place of their choice. Adding to that it offers detailed information about the machine with the options of booking a test ride and placing an order, instantly.

TVS XL100 HD i-TouchStart:

lectric Vehicles, the TVS iQUBE is a strong contender in is space in the times to come.

TVS NTORQ was launched in February 2018 and it was Company''s first 125cc product in the Scooter segment. Designed for Gen-Z, TVS NTORQ provides a s revolutionary riding experience ; with cutting edge technology, style and performance.

Keeping the core customers in mind, this product has been provided with many technologically superior features like Bluetooth connectivity- the first ever scooter to have this feature.

TVS NTORQ became one of the fastest growing scooters crossing 1 lakh sales within 6 months of launch. The product continues to delight customers and has garnered several accolades since its inception.

In October 2019, TVS NTORQ Race Edition was introduced in the market and it found exceptional resonance with customers. It is currently the only scooter with a Race Tuned Fuel Injection system with Best-in-class Performance in its category.

In FY 2020-21, TVS NTORQ introduced a special variant in the portfolio - Super Squad Edition, in association with Marvel Studios, inspired from the epic characters of the Marvel Avenger''s series - a first of its kind association in the two wheeler industry in India. This resulted in significant growth of the brand (13% growth from July-March over LY) and the variant currently contributes to 30% of the overall portfolio in just 6 months of launch.

Domestic Sales

The Company achieved sales of 21.6 lakh units of two wheelers in the domestic market compared to sales of 24.1 lakhs in

2019- 20. The Company outperformed the broader Industry which declined by 13%.

In domestic motorcycles, Company achieved sales of 6.3 lakh units and registered a decline of 17% over 2019-20. The TVS Apache, grew better than the Premium motorcycle industry with sale of 3.3 lakh units, posting a decline of only 11% while the Premium Motorcycle industry declined by 14% in

2020- 21 against 2019-20.

In domestic scooters, Company achieved sales of 9.2 lakh units and registered a decline of 10% over 2019-20. However, Scooters volume growth was higher than Industry supported by product interventions in Jupiter and launch of Super Squad edition in TVS NTORQ.

Exports sales - two-wheeler and three-wheeler

The Company''s two wheeler exports in 2020-21 were 7.64 lakh units and witnessed an improvement with a growth of 12% over 2019-20.

appropriate steps to minimize the impact of such risks based on learnings from last year.

3. Semi-conductor availability: The increase in demand for consumer goods and unexpected growth in auto sector had led to supply shortfall of semi-conductors and the lead time for these goods have increased from 3 months to 18 months. These semi-conductors form a critical component in two wheelers too. The shortfall of semiconductors is likely to continue and pose as a risk in meeting the production demand.

International Business:

1. Container availability - Due to continued high traffic container movement from China to North America and Europe post CoVID-19 outbreak, there has been shortages of containers at Indian ports. This clubbed with increased exports from India is posing further shortage of space availability or availability at higher costs. This situation is expected to continue and result in delayed supplies to global customers.

2. Some of the Company''s target markets/countries might witness a rapid spread of CoVID-19 second wave thereby lowering economic activity. A sustained drop in commodity prices and exports could reduce foreign exchange income in some of the export countries. The effect of second wave is already seen in LATAM, Bangladesh and Tanzania which are important export destinations. The Company has looked at options to minimize the impact by leveraging opportunity in less affected countries and by launching new products and leveraging financing solutions for customers.

3. Country specific Socio economic political factors. The Company keenly tracks progress of country specific factors which could impact its ability to service its consumers like:

a. Ban of two wheeler imports in Srilanka - Sri Lankan Government banned import of all motor vehicles (except special category of vehicles) since March 2020. This import ban is put in place to preserve the foreign currency reserve.

b. Political turmoil in Myanmar: Exports from India and PT TVS, Indonesia to Myanmar is affected due to the current political situation there. This is expected to affect the exports.

RISK MANAGEMENT POLICY

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.

Three wheeler exports during the year reached 1.15 lakh units and recorded a decline of 29% over 2019-20.

Opportunities

The CoVID-19 pandemic is causing paradigm shifts in consumer behavior affecting many industries including the automobile Industry. Social distancing norms followed across the globe due to CoVID-19, could become the new normal. People may move away from use of shared / public transport solutions. This changed preference would lead to enhanced need for a personal mobility solution. This could emerge as an area of opportunity for two wheelers.

The move towards alternative-energy based mobility solutions is needed and has been receiving considerable policy support. In light of the revised priorities post CoVID-19, the speed and extent of the policy support may alter, modifying the rate of change.

The Company will be closely studying such factors and is well poised to leverage this space through appropriate offerings across its wide stable of technology, products and business solutions. The EV portfolio of the Company today has TVS iQUBE which had been very well received in Bengaluru. The TVS iQUBE was then launched in New Delhi as well, basis the strong pre-launch online interest evinced by the customers from New Delhi. Across its 2 cities there is a 8-week order-book and the Company is looking to service the same expeditiously. Through the year, The TVS iQUBE footprint will expand to 20 more Indian cities. The portfolio also is set to expand to newer formats including a 3W version.

RISKS AND CONCERNS Domestic Business:

The Government has already started the vaccination drive and has covered some of the vulnerable sections, frontline responders, senior citizens and individuals with co-morbidities. The stated intent is to inoculate 30% of the population by September. However, a widespread second wave could result and contribute to delay of this plan. While, it is expected that the response to the second wave will be very measured, targeted and localized, there will be economic implications / impact of the counter measures. This could include:

1. Impact from the demand side: Consumption may take a hit. The uncertainty of the date and speed of resolution, might further weaken the overall consumer sentiment and affect demand. The severity of impact is likely to be higher, at the lower to mid income level, who form bulk of the commuter 2W consumers.

2. Impact from the supply side: Labour reverse migration leading to non-availability of manpower at tier-2 and tier-3 suppliers affecting the supply of parts and daily operations. The transit per se of goods should not be impacted, but some localized hubs may see lockdowns impacting productivity. The Company has taken

OPERATIONS REVIEW

Total Quality Management (TQM)

Total Quality Management (TQM) remained key focus in the organization during the pandemic to mitigate the business risks during uncertain industry environment in the first half of the year and to drive the organization towards growth path in the second half.

In Daily Work Management (DWM), emphasized culture of speed and rigor in execution during the pandemic through ''new normal'' way of working with Daily management by senior leadership team on revenue achievement, working capital management and CoVID-19 risk mitigation. Taskforce-based approach in specific geography / products helped in retaining market share during the year inspite of challenges in the market. Strengthened Cross functional management, 5S and permeation of ''Focus on process for results'' in front-end towards dealer transformation. The Company''s plant in Himachal Pradesh received ''Award for Excellence in Consistent TPM Commitment.''

Total Employee Involvement culture was significantly permeated towards profitability of the organization by promoting ''Profit Improvement Plan''. Both workmen, Executives & Managers significantly focused on implementing cost reduction towards operational improvements and waste elimination to support and enable lower spending during the year. Theme of ''waste elimination'' in areas of inventory management and asset management helped the Company to improve its working capital management.

Cost Management

The Company continues to focus on all the elements and drivers of cost. Raw materials, components and conversion cost constitute major element of material cost. The Company pursued process innovation, value engineering, alternate sourcing and import substitution / localization to reduce material costs. During the year, focused working capital management and improved operating performance helped the Company to generate significant free cash flow. These proceeds are being used to reduce the debt. Rigorous focus on lean trade stock with the dealers also enhanced the financial health of the channel partners by reducing nonvalue adding costs and improving speed and freshness across the entire supply chain. Waste elimination, productivity improvements and process improvements through multiple means including small scale automation will continue across the supply chain during 2021-22.

In the area of fixed cost, similar systematic approach of deployment of cost reduction is being done, with significant 20

and increasing digitalization of internal processes to eliminate cost and enhance speed.

Research and Development

The year 2020-21 witnessed launch of products with many segment firsts from the Company. TVS Apache 200 4V was launched with Ride Modes with technical breakthrough in offering functionality with Mechanical Throttle Body. The engine ride modes, ABS modes and adjustable suspension, adjustable control levers stand as good examples of R&D''s pursuit of innovations that enhance customer experience with the products of the Company. The complete product range for both domestic and international markets has received upgrades and refreshes, with proliferation of the TVS SmartXonnect technology offering connected experience on many more offerings.

The R&D team continues their efforts in developing cutting-edge technologies that are relevant for the near and long-term requirements of the Company''s business plans. These developments are centered on customers, emerging mobility needs, providing advanced safety systems and sustainability. The Company continues to leverage global talent through several co-operations with Indian and global expert organizations.

Research is intensified in chosen fields of science and engineering in order to be future ready.

TVS Racing, an arm of the Research and Development department, had a very successful season 2020. India''s oldest factory racing team, has seen consistent investment towards significant engineering advancement of motorcycles and scooters, used for racing. The technology and engineering advancements implemented in the Racing products are developed through research projects by the internal R&D team, leading to a swift transfer of such advancements to the mass production products. The TVS Racing team garnered 100% podium finish in the 24 races participated and won 10 out of 10 championships.

Information Technology

The Company continues to implement several projects to improve its efficiency, transparency and process control across supply chain from supplier, plant, dealer and ultimately consumer. Major focus areas are improvements at factory, retail management and improving customer experience at dealerships. Various initiatives on industry 4.0 are being adopted for improving quality, productivity, traceability and waste elimination.

This year saw the organisation contend with a rapid transformation of working conditions, to facilitate and accommodate a greater proportion of WFH (Work From Home). The Company was able to ensure data and information security while minimizing loss of productivity by rapidly evolving policies and deploying tools like VPN networks, MS TEAMS, that facilitated collaboration and ensure employee productivity. While production will still need people at the plants, in all other areas, the Company has evolved to be able to adapt

and deal with any future situation which needs an evolving responsive blend of work practices blending WFH, Work From Anywhere (WFA) with the traditional office model.

In 2020-21, the Company launched TVS A.R.I.V.E, aimed at transforming customer experience of virtual exploration of two wheelers, through an innovative mobile application. The Augmented Reality Interactive Vehicle Experience (A.R.I.V.E) app allows an in-depth product exploration and purchase experience using AR technology, from the convenience of the homes. This first in its segment app will offer a superior, holistic and engaging experience for its customers.

As part of continuous improvement and technology benchmarking, the Company''s IT systems were audited by external experts and recommendations were implemented. The Company has enhanced information security by adopting new cyber security tools. The Company has engaged one of the major consulting firms to do benchmark study on cyber security framework and implemented controls based on recommendations. The Company has enhanced security by implementing multi-layered firewalls and deployed security control centres. The Company has formed a cyber-security governance council consisting of senior management and industry experts for improving its cyber security.

The Company is ISO 27001:2013 certified for all manufacturing units and sales offices. Business continuity plan for major business and design applications has been implemented and tested. The Company is certified for ISO 22301 for business continuity. The Company has been certified for CMM level 3 for its software development process.

In 2020-21, the Company established a data management and governance office and has begun a systematic program to drive discipline in how data is managed and governed in the 21^st century. In addition, a study to understand potential implications of the impending personal data protection bill has been conducted, to ensure seamless compliance and necessary actions have been identified to be undertaken in FY 2021-22. During the year, the Company expanded the use of data engineering, reports with live data and Machine learning (ML) based decisions across its products and business functions. In customer & commercial processes, data engineering and power BI based visualizations have been built to provide real-time insights and actionable recommendations. Real-time dashboards have been created for connected vehicles and operations. Additionally, ML engines and computer vision frameworks pilots are deployed at multiple points of the organisation to expedite the digital transformation of internal processes.

INTERNAL CONTROL AND THEIR ADEQUACY

The Board is accountable for evaluating and approving the effectiveness of the internal controls, including financial, operational and compliance controls. Company has a proper

and adequate internal control system to ensure that all its assets are safeguarded and protected against any loss and that all the transactions are properly authorized and recorded. The internal control system is subject to continuous improvement, with system effectiveness assessed regularly. Information provided to management is reliable and timely. Company ensures the reliability of financial reporting and compliance with laws and regulations.

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 over the use of new technologies that impact the Financial controls and reporting enterprise risk. 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 an Independent audit firm as well as internal audit team and presented to the Audit Committee. Based on the periodical testing, the framework is strengthened, from time to time, to ensure adequacy and effectiveness of Internal Financial Controls.

KEY FINANCIAL RATIOS

As required under Regulation 34 of the Listing Regulations, there was a significant change in Debtors turnover ratio and Debt equity ratio. Details of changes are:

Ratios	UOM	Standalone		Consolidated
Ratios	UOM	2020-21	2019-20	2020-21	2019-20
Debtors Turnover Ratio	Times	15.57	12.19	13.96	11.35
Debt Equity Ratio	Times	0.06	0.44	2.46	2.85
Return on Net worth	%	15.72	17.01	16.72	19.36

The ratios in the current year have improved compared to the previous year, primarily reflecting better operational performance and reduction in borrowing.

Return on Networth was adversely affected mainly due to impact of CoVID-19 during the first quarter of the financial year.

NON-CONVERTIBLE DEBENTURES

Environment, Occupational Health & Safety:

and, are integrated into a common system making it leaner and more efficient.

Company has reduced 21% specific water consumption with respect to previous year. Company''s approach was "Demand side Water management" which best utilizes the available water. The water management framework has - water resource management, water distribution & supply management, management of water by end-users and finally waste water management.

The renewable power contributes to 84% in overall share of power. Out of which 76% of energy utilized from Wind power and 8% of energy trapped from Solar. These initiatives of renewable energy resulted in CO₂ emissions reduction of 58,812 tons during 2020-21.

In process design, efforts have been taken to minimize the generation of waste by introduction of cleaner technologies. With continuous safety improvements, average Plant Safety Rating System score has improved. Proactive hazard control measures have been implemented, which resulted in reduction of first aid injuries. Towards sensitizing employees on safety, around 58,000 hours of safety training was provided covering employees of all categories.

During lockdown due to pandemic, the Company''s Occupational Health Centre (OHC) provided 24x7 support to employees and their families. Counselling was done to patients and family members through online and tele-consultation. The medical team assisted employees and their families for hospitalisation across India and for home care.

Post lockdown, all employees were screened while onboarding to duty. Homeopathy medicines, immunity boosting medicines were distributed to all employees. Towards creating awareness about CoVID-19, online sessions were conducted with experts. Also, an on-going campaign to drive CoVID-19 appropriate behaviour by all employees is being conducted, via awareness videos, newsletters, intranet and posters.

The Company has announced that it would cover the cost of vaccination for all employees and their families. 45 year plus employees have been reached out to with special camps in sync with local health authorities. This is not only an individual health practice but as a duty, as a member of the community, to build collective immunity and help "BREAK THE CHAIN".

HUMAN RESOURCE DEVELOPMENT (HRD)

Constituents of Human Resources Development framework followed at the Company include Workforce planning, Employee engagement, Performance & rewards, Learning and Development, Career & Succession planning and Organization Development. Towards sustenance and delivering improved results, these constituents have a structured approach, policies and standard operating procedures which are reviewed and updated periodically. Current and future Skill-based competency development are planned and executed through both in-house programs and globally acclaimed programs, continuing education, challenging project assignments and job rotations.

Towards collective capability and supporting strategy, IQL adapted the concept of Community of Practice (CoP) in the least 4 years. During 2020-21, three CoPs were launched for Operations Research (OR), Reliability Engineering and TRIZ (Inventive problem methodology). These CoPs contributed significantly for tangible and intangible business impact. Skills training center in IQL supported the ramping-up of production volumes by training the freshers for the Company''s plants and also for suppliers. Skills training center trained 2584 person in the areas of assembly, fabrication, painting, CKD for IB.

With the constrains of pandemic, IQL organized virtual Learning Convention 2021 with Learning Conference and Learning Showcase. The conference was organized with 4 themes of panel discussion namely Social Learning to drive Business excellence, Competency to drive Retail excellence, CoPs for Breakthrough Management and Accelerating Digital Transformation, with powerful key note addresses and case studies. Dr. David Greenhood, Director of Industrial Engagement, The University of Warwick, addressed the Learning Convention on the theme of "Getting Future Ready" This virtual event was attended by over 1,200 Managers and Executives.

The Company continues to maintain its record of good industrial relations without any interruption in work. As on 31^stMarch 2021, the Company had 5,035 employees on its rolls.

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-

i. that in the preparation of annual accounts for the financial year ended 31^st March 2021, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

iv. that the Directors had prepared the annual accounts for the financial year ended 31^st March 2021 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.

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 selfreliant rural community.

Over 25 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 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.

Based on the recommendation of the CSR Committee, the Board has approved the projects / programmes carried out as CSR activities by Srinivasan Services Trust for an amount of $ 18.38 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

2020-21.

Presently, SST is working in thousands of villages spread across Tamil Nadu, Karnataka, Maharashtra, Himachal Pradesh and Andhra Pradesh covering a population of about 24.50 lakhs and 6.24 lakh families. SST has focussed on the areas of economic development, health care, education, environment, social, infrastructure and water

conservation actively in 3000 villages. SST will focus on 2000 more villages also, so that all these areas are covered in the next 3 years.

It may also be noted that the CSR Committee has approved the projects or programmes to be undertaken by the SST for the year 2021-22, preferably in local areas including 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.

The Company has also ensured that none of the projects undertaken through SST requires impact assessment, as these projects are within the threshold limit of $ 1 Cr.

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 2020-21 are given by way of Annexure IV attached to this Report.

7. FINANCIAL PERFORMANCE OF SUBSIDIARIES & ASSOCIATES

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

Subsidiaries

1. Sundaram Auto Components Limited, Chennai

2. TVS Housing Limited, Chennai

3. TVS Motor Services Limited, Chennai

4. TVS Credit Services Limited, Chennai

5. TVS Two wheeler Mall Private Limited, Chennai

6. TVS Micro Finance Private Limited, Chennai

7. Harita ARC Private Limited, Chennai

8. Harita Collection Services Private Limited, Chennai

9. TVS Commodity Financial Solutions Private Limited, Chennai

10. TVS Housing Finance Private Limited, Chennai

11. Intellicar Telematics Private Limited, Bengaluru

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

13. TVS Motor (Singapore) Pte. Limited, Singapore

14. The Norton Motorcycle Co Limited, UK

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

20. Premier Land Holding LLC, South Carolina, USA

Associates

- Emerald Haven Realty Limited, Chennai and its subsidiaries

- Ultraviolette Automotive Private Limited, Bengaluru

- Tagbox Solutions Private Limited, Bengaluru

Associates of TVS Motor (Singapore) Pte Ltd

- Tagbox Pte Limited, Singapore

- Predictronics Corp., USA

- Scienaptic Systems Inc., USA

- Altizon Inc, USA

PERFORMANCE OF SUBSIDIARIES

Sundaram Auto Components Limited (SACL)

Total income of SACL was $ 463 Cr in the current year as against $ 530 Cr in the previous year 2019-20.

SACL incurred a loss of $ 19.08 Cr including an exceptional item of $ 9.36 Cr during the year 2020-21 as against PBT of $ 6.44 Cr in the previous year.

TVS Housing Limited (TVSH)

TVS Housing Limited is a 100% subsidiary of the Company.

TVS Motor Services Limited (TVS MS)

TVS MS was initially the investment SPV of the Company, for funding TVS Credit Services Limited (TVS CS). Pursuant to order of the National Company Law Tribunal, Chennai (NCLT) TVS MS transferred its investments in equity shares of TVS CS, in the previous year, to the Company for the redemption of its preference shares held by the Company. TVS MS now holds 0.57% only in TVS CS and TVS MS continues to be a 100% subsidiary of the Company.

TVS Credit Services Limited (TVS CS)

TVS CS is the retail finance arm of the Company for financing of two wheelers.

During the year 2020-21, TVS CS''s overall disbursements registered at $ 8,627 Cr as compared to $ 7,628 Cr in the previous year registering growth of 13%. During the year under review, the assets under management are around $ 11,200 Cr as against $ 9,215 Cr during the previous year registering a growth of 21%. Total income during the financial year FY 2020-21 increased to $ 2,241 Cr from $ 2,000 Cr during the financial year, an increase of 11.6% over the previous year.

The profit before tax and exceptional items for the year stood at $ 105 Cr as against $ 218 Cr during the previous year and the reduction is due to loss of business during first quarter of the year, increase in investment on recovery related initiatives and higher level of CoVID-19 related provisions. 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

All the above subsidiaries are yet to commence their operations.

Intellicar Telematics Private Limited (Intellicar)

During the financial year effective 31^st December 2020, the Company acquired the entire equity shares of Intellicar Telematics Private Limited (Intellicar), a start-up company and thereby it has become a wholly owned subsidiary of the Company. Intellicar provides advanced fleet management solutions through an integrated platform powered by IoT technologies coupled with strong analytics and data management capabilities. It will help accelerate the ongoing digital initiative of the Company that are targeted at delivering enhanced customer experience.

Total income of Intellicar was at $ 7.88 Cr in the current year as against $ 16.11 Cr in the previous year 2019-20. Intellicar incurred a loss of $ 4.83 Cr in the year 2020-21 as against loss of $ 0.93 Cr in the previous year 2019-20.

PT. TVS Motor Company Indonesia (PT TVS)

The Indonesian two wheeler Industry declined by 30% during the year 2020-21 at around 3.2 million units.

During the year under review, PT TVS achieved sales in three wheelers and recorded sales of 4,420 units as against 7,806 units of sales during the previous year and 58,901 nos. of two wheelers as against 53,641 nos. of last year, thereby registering a growth of 10%.

The growth in sales numbers, coupled with margin improvement enabled PT TVS to achieve a positive EBITDA of USD 3 million for the full year as against a USD 0.50 million of last year. It is also worthwhile to note that the Company achieved break even by posting operating profit for the financial year 2020-21.

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, is being leveraged to operationalize a digital technology organization focused on delivering high quality digital solutions that address real life business challenges by harnessing the power of Analytics, Artificial Intelligence, Augmented Reality, Machine Learning and Internet of Things. The solutions and offerings are focused in the areas of automotive and fintech industries that have direct relevance to the Company and its subsidiaries.

TVS Motor (Singapore) Pte Limited had made investments aggregating USD 19.52 Mn in Altizon Inc (USA) in the area of Digital Manufacturing focused on Digitizing Legacy Factories, Predictronics Corporation (USA) in the area of Digital Manufacturing focused on Predictive Maintenance, Scienaptic (USA) in the area of Credit Services focused on Credit Decisioning, Underwriting and Collections and in Tagbox (Singapore) in the area of Fleet Management focused on Granular Asset Tracking.

Despite the severe negative impact on businesses across the globe due to CoVID-19, the Company invested entities have performed very well with Predictronics, Scienaptic and Tagbox registering double digit revenue growth with improved operational metrices compared to the previous financial year. Thanks to the growth in digital technologies driven by CoVID-19, it is expected that the invested start-ups will deliver material growth in FY 2021-22 with solid financial and operational results while continuing to add value to the ongoing digital transformation initiatives in group companies.

During the year, the Company has invested a sum of SGD 35.44 Mn in the ordinary shares of TVS Motor (Singapore) Pte Limited.

The Norton Motorcycle Co Limited, UK (formerly known as Project 303 Bidco Limited)

In April 2020, The Norton Motorcycle Co. Limited UK (Norton) (formerly known as Project 303 Bidco Limited), a wholly owned subsidiary of TVS Motor (Singapore) Pte Limited concluded an asset purchase transaction which included the brand "Norton" and other associated brands, trademarks and certain other assets from Norton Motorcycle Holdings Limited (in administration) & Norton Motorcycles UK Limited (in administration).

Post-acquisition, a new state-of-the art facility is being created in Solar Park, Solihull near Coventry. The facility will focus on producing high end premium motorcycles. During FY 2020-21, Norton focussed on building new brand vision and strategy, enhancing the organisation strength, establishing supply chain network, product readiness with high quality standards, planning product and marketing strategy for future. Production and sales from new facility will commence during the first half of FY 2021-22.

Norton will continue to invest in development of new premium motorcycles, R&D and developing the dealer network across the globe.

Sundaram Holding USA Inc. (SHUI) & its subsidiaries

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 2020-21, SACL and SCL have invested a sum of USD 3 Mn and USD 7.4 Mn in the ordinary shares of SHUI and holds 68% and 32% respectively of the total capital of SHUI as on 31^st March 2021.

Post CoVID-19 and with the US economy recovering, SHUI is preparing production and supply chain activities and is likely to commence the commercial production by first half of 2021-22.

Associates:

Emerald Haven Realty Limited (EHRL)

Chennai residential real estate market was severely impacted by CoVID-19, due to lockdown restrictions imposed, job losses, pay cuts and postponement of purchase decision by customers, impacting enquiries and absorption.

In H1 FY21, absorption fell sharply and no new projects were launched by major players leading to an increase in inventory overhang. Construction activities at the project sites were also impacted due to lockdown restrictions, non-availability of migrant workforce and raw material supply constraints. In line with the overall industry trend, EHRL faced a challenging H1 with low walk-ins, low sales and collections, higher cancellations and slowing down of construction activities across projects.

However, in H2 FY21, EHRL registered a sharp increase in sales, collections and construction activities compared to H1 83% of annual sales, 70% of annual collections and 61% of construction activities were done in H2 FY21.

The Company has completed development of 1.4 Million Sft till date and the balance area under development as on date is 4.5 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.

Ultraviolette Automotive Private Limited (UV)

UV incurred a loss of $ 1.61 Cr in the year 2020-21 as against loss of $ 3.49 Cr in the previous year 2019-20. UV is a start-up company engaged in developing electric mobility solutions.

Tagbox Solutions Pvt Ltd, India /Tagbox Pte Ltd, Singapore (Tagbox)

Total income of Tagbox Solutions Private Ltd was at $ 6.1 Cr in the current year as against $ 4.6 Cr in the previous year 2019-20. Tagbox Solutions Private Ltd earned a PBT of $ 0.9 Cr in the year 2020-21 as against PBT of $ 0.3 Cr in the previous year 2019-20.

Total income of Tagbox Pte Ltd was at $ 0.11 Cr in the current year as against $ 0.13 Cr in the previous year 2019-20. Tagbox Pte Ltd incurred a loss of $ 1.1 Cr in the year 202021 as against loss of $ 0.6 Cr in the previous year 2019-20. Tagbox is a start-up company which provides an IoT based monitoring solution to predict and prevent unfavourable events, optimize reefer fleet and routes and manage inventory.

Predictronics Corp, (Predictronics) USA

Sales of Predictronics was at $ 7.8 Cr in the current year as against $ 6.6 Cr in the previous year 2019-20. Predictronics incurred a loss of $ 4.6 Cr in the year 2020-21 as against a loss of $ 5.5 Cr in the previous year 2019-20. Predictronics is a start-up company engaged in predictive analytics solution for critical assets, vertical software for industrial robots and consulting services.

Scienaptic System Inc (Scienaptic), USA Total income of Scienaptic was at $ 26.7 Cr in the current year as against $ 18.9 Cr in the previous year 2019-20. Scienaptic incurred a loss of $ 19.3 Cr in the year 2020-21 as against loss of $ 12.0 Cr in the previous year 2019-20. Scienaptic is a start-up company engaged in AI powered Advanced underwriting decisioning platform.

Altizon Inc, (Altizon) USA

Total income of Altizon was at $ 4.1 Cr in the current year as against $ 5.3 Cr in the previous year 2019-20. Altizon incurred a loss of $ 8.6 Cr in the year 2020-21 as against loss of $ 13.9 Cr in the previous year 2019-20. Altizon is a start-up company which provides an industrial IoT helping enterprises use machine data to drive business decisions.

8. CONSOLIDATED FINANCIAL STATEMENTS

The consolidated Profit Before Tax of the Company and its subsidiaries & associates amounted to $ 822 Cr for the financial year 2020-21 as compared to $ 865 Cr in the previous year.

9. DIRECTORS & KEY MANAGERIAL PERSONNEL

Directors'' appointment / re-appointment / cessation

During the year under review, the Board has appointed Prof. Sir Ralf Dieter Speth (Sir Ralf) as Non-Executive NonIndependent Director (NE-NID) and Mr Kuok Meng Xiong (MX), as Non-Executive Independent Director (NE-ID) on the board at its meeting held on 24^th March 2021, on the recommendation of the Nomination and Remuneration Committee.

Prof. Sir Ralf Dieter Speth (Sir Ralf)

Sir Ralf is an outstanding engineer and brings with him exemplary experience from some of the highest echelons of the global automotive industry. He has served as the Chief Executive Officer of Jaguar Land Rover (JLR), and during his stint JLR developed strategies, designs, styling, and products for making it one of the most respected automotive and luxury brands in the world. Sir Ralf is widely acclaimed for his tremendous leadership at JLR and for transforming it into the global marquee it is today. He continues to serve on the board of JLR as Vice Chairman. He began his career in BMW and did his PhD at Warwick Manufacturing Group, University of Warwick and later he joined Ford Motor Company''s Premier Automotive Group (PAG) where he was responsible for product planning and quality. Later, he moved to the chemical giant Linde where he ran global operations.

Sir Ralf''s passion for technology, deep knowledge and tremendous connect with the current global automotive industry including in terms of engineering, marketing, and people and his deep insights and guidance, academic knowledge and rich practical experience in automotive industry will be invaluable to the management team as the Company embraces the future of mobility. Sir Ralf will mentor the Company and its management.

Then, the Board considered his appointment as an additional and NE-NID of the Company, till the ensuing annual general meeting, and his appointment as a Director is subject to the approval of the shareholders, liable to retire by rotation.

Mr Kuok Meng Xiong (Mr MX)

Mr MX is the scion of the reputed Kuok Group in Singapore and from one of Asia''s most respected business houses running Wilmar, one of the largest grain trading business, Shangri La Hotels and real estate business globally.

Mr MX is the Founder & Managing Partner of K3 Ventures, a Singapore-based venture capital investment firm. In the last 8 years, he has invested in and partnered with visionary founders of category-leading companies that drive innovation in today''s world. The K3 Ventures portfolio comprises 70 companies including ByteDance, Grab, Palantir, Planet, Perfect Day, Aspiration, Genki Forest, SpaceX, Airbnb and Next Gen Foods.

Mr MX serves as a director on the boards of ByteDance (Singapore), Next Gen Foods, SoCash, Logivan, and the Anglo-Chinese Schools Foundation. He is also a Senior Advisor to TPG Capital.

Mr MX started his career at the Group''s Shangri La Hotels, expanding it to Europe, West Asia and Sri Lanka. He started the venture firm K3 where he has led early investments in most of the world''s leading startups in technology field and many Asian unicorns.

Mr MX strengths include his experience of helping build and manage a hotel chain, as well as growing up in a family that values relationships over short-term monetary gains. While recommending his co-option on the board as NE-ID, NRC considered his experience with digital technology and start up would be more helpful to sourcing as well as for investments by the Company in digital start-ups.

Mr MX achievements at young age and his varied insights would be helpful to the Company''s diversification as he ceded several companies in the last 10 years and his appointment on the board would certainly be a great asset to the Company and he would bring a unique mix of strong corporate values and a clear vision of the future digital world. Then, the Board considered his appointment as an Additional Director of the Company, till the ensuing annual general meeting, and appointment as a NE-ID for a period of five consecutive years effective 24^th March 2021 is subject to the approval of the shareholders, not liable to retire by rotation. The Company is seeking approval of the shareholders for the appointment of Prof. Sir Ralf Dieter Speth, as NE-NID and Mr Kuok Meng Xiong, as NE-ID for a term of five consecutive years effective 24th March 2021, at the ensuing AGM.

During the year under review, Mr Rajesh Narasimhan, tendered his resignation as a Non-Executive NonIndependent director of the Company with effect from the close of business hours on 24^th March 2021 due to his various business commitments and increased responsibilities within the group.

The board also noted that post resignation / appointment of NE-NID / NE-ID, the composition of the Board is in compliance with half of the Board consisting of Non-Executive Independent Directors, as required under the Listing Regulations.

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 annual general meeting. Mr Sudarshan Venu and Mr K N Radhakrishnan, Directors

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. 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.

On 5^th March 2019, the IDs viz., M/s. T Kannan, C R Dua, Prince Asirvatham and Hemant Krishan Singh were reappointed for the second term of 5 consecutive years from 14^th July 2019. Mrs Lalita D Gupte and Mr R Gopalan, were appointed as Additional and Non-executive Independent Directors for a term of 5 years by the board at its meeting held on 23^rd October 2018 and 30^th April 2019 respectively and the same were approved by the shareholders at the AGM held on 22^nd 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 Company is seeking approval of the shareholders for the appointment of Mr Kuok Meng Xiong as NE-ID for a term of five consecutive years effective 24^th March 2021, at the ensuing AGM.

The detailed terms of appointment of IDs is disclosed on the Company''s website in the link as provided in page no. 85 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 22^nd March 2021.

a) Non-Independent Directors (Non-IDs)

IDs used various criteria prescribed by the Nomination and Remuneration Committee (NRC) for evaluation of Non-IDs

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

Key Managerial Personnel (KMP)

Mr Venu Srinivasan, Chairman and Managing Director, Mr Sudarshan Venu, Joint Managing Director, Mr K N Radhakrishnan, Director & CEO, Mr K Gopala Desikan, Chief Financial Officer and Mr K S Srinivasan, 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

Nomination and Remuneration Policy was approved by the Board at its meeting held on 23^rd September 2014 and amended from time to time to maintain consistency with statutory amendments to be reflected in the policies to make it uptodate 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.

viz., M/s Venu Srinivasan, Chairman and Managing Director, Sudarshan Venu, Joint Managing Director, K N Radhakrishnan, Director & CEO, H Lakshmanan, Dr. Lakshmi Venu and Rajesh Narasimhan, Directors and also of Chairman of the Board and the Board as a whole.

IDs evaluated the performance of all Non-IDs individually, through a set of questionnaires. They reviewed the Non-IDs interaction during the Board / Committee meetings and thoughtful inputs given by them to improve the cyber security framework, supplier management 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 considering his performance vis-a-vis benchmarking the performance of the Company with industry under the stewardship of Chairman.

The IDs also placed on record, their appreciation of Chairman''s timely and proactive interventions for making progress on production, sales and managing the financial relationships with distributors in an exceptionally difficult and unpredictable year battered by pandemic. IDs have also commended the transparency and commitment to governance and he stayed ahead in setting high standards for the Company.

They also commended his strenuous push for the acquisition of British iconic brand "Norton" despite the pandemic and the disturbances caused to the entire operations of the Company. They also recorded their appreciation for his exceptional competence in handling such critical situation and the Company has done very well both in governance and performance even during strained times.

IDs have also applauded the organized & timely response to the community and social initiatives during CoVID-19 times.

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. The Company has a Board with wide range of expertise in all aspects of business and outstanding diversity of the Board with the presence of varied personalities from diverse fields viz., Engineering, Management, Legal, Administration, Accounting and Finance. The Board upon evaluation concluded that it is well balanced in terms of diversity of experience with expert in each domain viz., Automotive, Leadership / Strategy, Finance, Legal & Regulatory and Governance. They also expressed their satisfaction on the presentations on major litigations, supplier advances, International Business risk, Status update on investment in start-ups, Cyber security threat that have been fairly made to all IDs with open door discussions. 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

Remuneration payable to Non-executive Independent Directors

The Shareholders at the 25^th AGM of the Company held on 11^th August 2017, have renewed the payment of remuneration, by way of commission not exceeding 1% of the Net profits, in aggregate, payable to the Non-Executive Independent Directors of the Company (NE-IDs) every year. 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

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 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 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.

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:

The number of Board meetings held during the financial year 2020-21 is provided as part of Corporate Governance Report prepared in terms of the Listing Regulations.

10.AUDITORS

Statutory Auditors

The Company has obtained necessary certificate under Section 141 of the Act, 2013 conveying their eligibility for being the Statutory Auditors of the Company for the year

2021-22.

The Auditors'' Report for the financial year 2020-21 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

12. BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34 of the Listing Regulations, the Business Responsibility Report for the year 2020-21 describing the initiatives taken from an environment, social and governance perspective, in the prescribed format is given as Annexure VII to this Report and is available on the Company''s website in the link as provided in page no. 85 of this Annual 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 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. 85 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 2021.

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

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 2020-21, given by M/s S Krishnamurthy & Co., Company Secretaries, 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 27^th April 2021 has re-appointed M/s. S Krishnamurthy & Co., Practising Company Secretaries, Chennai having Registration No.2215 allotted by the Institute of Company Secretaries of India as Secretarial Auditors for the financial year 2021-22.

Cost Auditor

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 $ 6 lakhs has been fixed by the Board as remuneration in addition to reimbursement of applicable taxes, travelling and out-of-pocket expenses payable to him, for the year 2021-22, 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 2019-20 on 26^th August 2020 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 Listing Regulations is given as Annexure VIII to this Report.

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. 85 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:

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 is 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 details of loans and guarantees under Section 186 of the Act, 2013 read with the Companies (Meetings of Board

and its Powers) Rules, 2014, for the financial year 2020-21 are given as Annexure VI to this Report. On loans granted to the Employees, the Company has charged interest as per its remuneration policy, in compliance with Section 186 of the Act, 201 3.

Please refer note No. 4 to Notes on accounts 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.

Disclosure 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 holding Company viz., Sundaram-Clayton Limited, Chennai. The Directors 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.

For and on behalf of the Board of Directors

Chennai VENU SRINIVASAN

27^th April 2021 Chairman

Mar 31, 2019

DIRECTORS'' REPORT TO THE SHAREHOLDERS

The Directors have pleasure in presenting the twenty-seventh Annual Report and the audited accounts of the Company for the year ended 31^st March 2019.

1. COMPANY PERFORMANCE

The Company continued to grow ahead of the industry registering sales of 37.6 lakh units of two-wheelers in 2018-19, growing by 11.6% over last year. Sale of motorcycles grew by 15% and scooters by 14.6%. Threewheeler sales grew by 57.6% in 2018-19 mainly on account of buoyant international markets. Sale of spare parts grew by 13.8%.

The Company continues to lead in customer satisfaction and has been top ranked in JD Power Two-wheeler Customer Service Index (2WCSI) since its inaugural study in 2016. The Company continues to delight its existing and new customers with product refreshes and new products. Recent new product launches like TVS NTORQ125, TVS Apache 1604V, TVS Radeon, TVS XL100 HD i-Touchstart continue to be well accepted by the customers.

Total revenue of the Company including other income increased from Rs.15,274.44 Cr in the previous year to Rs.18,217.46 Cr in the current year. Profit before tax (PBT) increased from Rs.878.64 Cr in the previous year to Rs.960.96 Cr in the current year. Similarly, Profit after tax (PAT) increased from Rs.662.59 Cr in the previous year to Rs.670.14 Cr in 2018-19.

2. FINANCIAL HIGHLIGHTS

Details	Year ended 31-03-2019	Year ended 31-03-2018
SALES
Quantitative	(Numbers in lakhs)
Motorcycles	15.59	13.55
Mopeds	8.97	8.77
Scooters	13.01	11.35
Three Wheelers	1.56	0.99
Total vehicles sold	39.13	34.66
Financials	(Rupees in crores)
Revenue from operations	17912.51	14,966.78
Other Operating Income	297.41	208.63
Other Income	7.54	99.03
Revenue excluding excise duty	18,217.46	15,274.44
Excise Duty	-	#343.22
Revenue including excise duty	18,217.46	15617.66
EBITDA	1440.79	1273.99

Details	Year ended 31-03-2019	Year ended 31-03-2018
Less: Finance Charges & Interest (Gross) 80.56		56.62
Depreciation	399.27	338.73
Profit before tax	960.96	878.64
Provision for tax	290.82	216.05
Profit after tax	670.14	662.59

# includes excise duty upto June 2017

3. DIVIDEND

The Board of Directors of the Company (the Board) at their meeting held on 23^rd October 2018, declared a first interim dividend of Rs.2.10 per share (210%) for the year 2018-19 absorbing a sum of Rs.120.28 Cr including dividend distribution tax. The same was paid on 3^rd November 2018.

The Board at its meeting held on 11^th March 2019 declared a second interim dividend of Rs.1.40 per share (140%) for the year 2018-19 absorbing a sum of Rs.79.70 Cr including dividend distribution tax. The same was paid on 22^nd March 2019.

Thus, the total amount of both dividends 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 absorbing Rs.199.98 Cr including dividend distribution tax.

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.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENTS

Two-wheeler

In the domestic market, two-wheeler industry sales grew from 202 lakh units in 2017-18 to 212 lakh units in 2018-19, registering a growth of 5% over last year. High uncertainty continues to prevail in industry. The first half of the year saw a growth of 10% in two-wheeler industry, led by growth in economy motorcycle segment. On the other hand, second half saw a decline of 0.8% led by slowdown in retail demand on account of increased insurance costs, retail finance crunch and fuel price escalation.

Scooter as a category, lost share for the first time since 2007-08. Scooters registered a marginal decline of 0.3% over 2017-18 leading to category share reduction from 33% in 2017-18 to 31.6% in the year 2018-19.

The motorcycle category grew at 8% (136 lakh units) over the last year. Within motorcycles, the premium segment grew by 13% from 18.9 lakh units in 2017-18 to 21.3 lakh units in 2018-19. Commuting segment also grew 7% from 97 lakh units in 2017-18 to 104 lakh units in 2018-19.

In the international market, two-wheeler industry had a growth of 17% over last year. Crude oil prices remained above Rs.65/ bbl for most of 2018-19 touching Rs.80/ bbl in October 2018. Consistent higher crude prices during the year drove economic growth in many international markets. Improved foreign exchange availability in Africa further aided the growth of export industry over last year. Latin America, Africa and few countries in Asia are some of the markets where demand improvement was witnessed.

Three-wheeler

Overall three-wheeler small passenger industry (3 plus 1 segment) grew by 30% in 2018-19 (from 6.4 lakh units in 2017-18 to 8.4 lakh units in 2018-19). Domestic industry grew by 3% and exports grew by 51% over 2017-18. Export market growth was a result of market recovery in Africa.

BUSINESS OUTLOOK AND OVERVIEW

Indian economic activity is expected to be at the same level of last year. Recent Government actions on improving income for farmers and lower middle class can support improved consumption.

Higher year-end inventory across trade and higher product costs due to escalated commodity prices of last year and advanced safety regulation implementation from April 2019 can impact the industry growth in the initial part of the year.

Majorly, industry will undertake a significant change in migrating from BSIV to BSVI emission norms commencing from April 1, 2020. Hence, in second half of 2019-20, BSVI transition will pose some challenges and the Company is gearing itself to meet the same.

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 trend of increased crude prices and improved exchange to local currency is expected to aid export market growth especially in oil dependent economies.

Consequently, the growth in two-wheeler industry during 2019-20 is expected to be around 6-8% over 2018-19.

New Product Launches and Initiatives

Strategic partnership with BMW Motorrad

The Company has a strategic partnership with BMW Motorrad to develop and manufacture sub-500cc bikes both for domestic and global markets. In December 2018, the Company also achieved a milestone of rolling out the 50,000 unit of the BMW 310cc motorcycle.

TVS NTORQ 125:

Launched in February 2018, designed for Gen-Z, TVS NTORQ 125 provides a revolutionary riding experience with cutting edge style, 125cc performance and technology. The first ever Bluetooth connected scooter made TVS NTORQ a one of its kind product in this segment.

TVS NTORQ125 became one of the fastest growing scooters crossing 1 lakh sales within 6 months of launch. The product continues to delight the customers and has garnered several accolades during the year 2018-19.

TVS Apache:

TVS Apache series crossed 3-million-global-customers milestone in September 2018. Through the years, TVS Apache has stood for providing an unrivalled experience backed by its rich racing pedigree, technological firsts and stylish design. The brand has, over a decade, developed a host of premium offerings, ranging from 160cc to 310cc, creating aspiration along every step of evolution.

TVS Apache RTR160 4V, the latest addition to the Apache portfolio launched in March 2018, also crossed 1 lakh sales within 6 months of launch. The motorcycle continues to resonate with enthusiasts across the country, thus exponentially increasing the loyal Apache tribe.

During the year 2018-19, the following new products and variants were launched.

TVS Jupiter Grande:

Launched in 2013, TVS Jupiter has now reached the 3 million mark. TVS Jupiter Grande is the perfect mix of style & substance. It brings in modern & contemporary style with a host of new features such as LED headlight with position lamp, digital-analogue speedometer, an exclusive Starlight Blue colour, and a luxurious cross-stitched maroon seat. It also comes with machined alloy wheels, disc brakes and adjustable shocks to elevate the riding experience. The appealing chrome side panels and body coloured pillion handle further accentuates the style quotient.

All this and more makes the Jupiter Grande edition a true example of brand Jupiter''s philosophy, ''Zyada ka Fayda'', offering functionality & delight to the Indian commuter.

TVS Radeon:

Designed specifically for the new crop of progressive and discerning millennial commuters residing in the middle India, TVS Radeon offers a unique combination of sturdy metal build, robust style and plush comfort. The very attractive TVS Radeon boasts of multiple first-in-class features and superior handling while not compromising on strength and reliability.

TVS Radeon stands for the ambitions of a confident selfmade Indian man. Within 7 months of its launch, the motorcycle has witnessed good customer acceptance from the target audience across the country as well as received critical acclaim and multiple awards.

TVS XL100 HD i-Touchstart:

XL100 has been a very successful brand since its inception in 2015. XL100 portfolio is now very robust with XL100 Comfort, XL100 HD & recently launched XL100HD iTS. The vehicle aims to partner customers in their success by providing more utility and now more convenience through i-touch start feature, mobile charging option, "Duragrip" tyre and heavy duty wheel assembly. It is also available in a unique "Mineral Purple" colour in addition to the regular colours.

TVS King Duramax 225 LC:

TVS King Duramax 225 LC is a pioneering three-wheeler development from the Company, offering a strong value proposition for the cost conscious customer through the adoption of advanced Liquid Cooled technology. Apart from delivering higher power, torque and double engine life, Duramax offers superior features like brightest headlamps, attractive soft top, USB charger, dual lockable water proof utility box and elevates the style quotient with beige dashboard, premium dual tone seats and OE fitted wheel caps.

Domestic Sales

The Company achieved sales of 31.4 lakh units of two-wheelers in the domestic market. With these sales, the Company registered a growth of 9% in 2018-19 over last year.

In domestic motorcycles, the Company achieved sales of 10.1 lakh units and registered a growth of 10.7% over 2017-18. TVS Apache continued the trend with 16% growth over last year. TVS Radeon was well received in the market and has significantly contributed to increased sales in commuter motorcycles. The brand crossed sales of 1 lakh units within 7 months of launch.

In domestic scooters, the Company achieved sales of 12.4 lakh units and registered a growth of 12.9% over 2017-18. The growth was largely supported by TVS NTORQ125 which has not only been well received by customers but has also won several accolades during the year.

The Company has strong distribution network of authorized dealers across India and continuously seeks to increase its reach.

Exports sales - two-wheeler and three-wheeler

The Company''s two-wheeler exports in 2018-19 were at 6.22 lakh units and witnessed an improvement with a growth of 26.4% over 2017-18.

The Company''s three-wheeler exports in 2018-19 were at 1.4 lakh units and recorded a 70.3% growth over 2017-18.

Opportunities and Threats

India''s growing middle class with rising disposable incomes supported by low inflation in past few years sets a growth potential for two-wheeler industry. Increasing need for commuting will continue to push the two wheeler penetration levels higher.

Aspirational lifestyle and availability of vehicle financing options are propelling demand for premium two-wheelers. It has been a consistent trend over past few years.

In recent times, competitive pressures including pricing discounts have become prevalent. The competitive pressures are expected to heighten until BSVI changeover on April 1, 2020. The Company will be well prepared through competitive products and actions that create sustained value.

The Company is also continuously evaluating and capturing opportunities in international markets. Company''s revenues from international sales have been on consistent growth on the back of successful product launches, robust partners and entry into new international markets.

Green mobility and target to become energy independent are the major factors for recent policy push in India. The Company is committed to support this initiative by developing suitable technology, products and business solutions.

Strong presence of the Company in all segments of two wheeler industry, planned new launches and expanded network of dealers will help the Company to consolidate its gain further and grow ahead of the Industry in the coming years.

RISKS AND CONCERNS

Good monsoon aids growth in domestic two-wheeler demand due to a significant share from rural markets. Any negative deviation from normal monsoon is a cause of concern.

Effect of price increase due to safety norms implemented from April 1, 2019 in domestic two-wheelers above 125cc will be seen only in first half of 2019-20.

Uncertainty of demand due to upcoming emission regulation will be high in second half of 2019-20. In order to leapfrog from BSIV to BSVI emission norms in domestic market from April 1, 2020, product readiness, supply chain readiness and dealership readiness will be crucial.

International factors such as geo-political scenarios and rising crude oil prices are being continuously monitored for both risks and opportunities.

The Company recognizes these risks and has developed action plans to mitigate the risks suitably.

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.

The risk function is looked after by a team reporting to the CEO of the Company. Process owners are identified for each risk and metrics are developed for continuous monitoring and minimization of risk.

OPERATIONS REVIEW

Total Quality Management (TQM)

TQM continues to be the backbone of the Company''s approach for sustainable growth through customer satisfaction. Continuous monitoring of performance measures and immediate actions to address such identified gaps have strengthened the process across the Company.

TVS way permeation has been a key focus area last year for the long term sustainability of the Company''s business results. Various actions were implemented towards improving the management process quality across organization. More than 100 managers have been trained to deliver consistent business results in their area through rigorous application of "daily work management". This was coupled with the Company''s continued focus on problem solving through certification in lean six sigma methodologies. The workmen have participated in various theme based suggestion schemes, i.e., Quality, Safety and waste elimination. The Company has also witnessed improvement in the quality level of suggestions. This has greatly contributed towards achievement of set objectives on Quality Cost Delivery (QCD).

Migration to IATF16949

The Company was awarded IATF16949 certification by Bureau Veritas in July 2018. IATF16949 certification promotes inculcation of risk based thinking and proactive approach across all functions and at all levels.

Cost Management

The Company continues to focus on all elements of cost. Raw materials, components and conversion cost constitute major element of material cost. Focus on employee productivity and effectiveness of communication helps to reduce fixed cost of the Company.

Process improvement, waste elimination and productivity improvements across the supply chain will continue to receive greater attention. The Company will also pursue process innovation, value engineering, alternate sourcing and local sourcing to reduce material costs. In addition, continued efforts to enhance product mix are also planned.

Research and Development

The Research and Development (R&D) team continues to focus on excellence in engineering and relevant technology development. As a result of the team''s in-depth customer understanding and design innovations, TVS Radeon, a highly appealing new product has been launched and received well in the market. The team has developed in-house technologies for advanced brake systems as well as collaborated with world class suppliers to deliver the entire product range with such advanced brake systems.

Technology development for achieving lower emissions in the entire range of products towards compliance with the forthcoming BSVI emission norms has reached advanced stage and the team is working towards timely readiness of complete product portfolio in production. The team is continuously working on many advanced engine technologies for further improvements in fuel efficiency, performance and to meet future emission norms for international and domestic markets. Work on electric powertrains is being continued with a strong focus for the future requirements.

The R&D team continues their efforts in developing cutting-edge technologies that are relevant for the near and long term future requirements of the Company''s business plans. These developments are centered on customers, emerging needs of environment, safety and sustainability. The Company also collaborates with leading research establishments and educational institutions, both within and outside the country to explore and develop breakthrough opportunities.

TVS Racing continued its high performance and winning streak during the year, with 96% podium positions and 14 championship wins out of 15 participations. The racing related development and experience has enabled many of the technology and product development projects that R&D has undertaken.

Information Technology

The Company continues to implement several projects to improve its efficiency, transparency and process control across supply chain from supplier to dealer. Major focus areas are improvement of inventory turns and vehicle telematics. Various initiatives on industry 4.0 are being adopted for improving quality, productivity, traceability and waste elimination. The Company is in the process of adopting various machine learning tools for improving quality of its products and processes.

As part of continuous improvement and technology benchmarking, the Company''s IT systems were audited by external experts and recommendations were implemented. To enhance information security, various new IT security tools were implemented, and periodic audits are conducted by external experts and necessary control measures are taken.

The Company is ISO 27001:2013 certified for all manufacturing units and sales offices. Business continuity plan for major business and design applications has been implemented and tested. The Company is certified for ISO 22301 for Business continuity. The Company has been certified for CMM level 3 for its software development process.

The Company has also leveraged the digital technology to improve the quality and quantum of customer reach. Using social listening, the Company is improving its customer engagement in a more effective and efficient way.

INTERNAL CONTROL 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.

RETURN ON NET WORTH

Particulars	Standalone		Consolidated
Particulars	2017-18	2018-19	2017-18	2018-19
Return on Net worth (%)	25.06	21.52	25.67	22.46

The return on Net worth of 2018-19 is not strictly comparable with previous year, since 2017-18 includes notional fair valuation gain of Rs.58.70 Cr on investments held by the Company and a one-time gain on sale of investments to the tune of Rs.18.97 Cr, which after adjusting the above notional / one-time gain works out to 22.12 % as against 21.52 % of 2018-19.

Consolidated Return on Net worth is not comparable due to inclusion of subsidiaries in the middle of previous financial year.

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 the 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.

Occupational Health & Safety (OHS)

The Company bagged two prestigious awards namely the Corporate Social Responsibility Award and Corporate Excellence Award at the CII - ITC Sustainability Awards 2018 held in Delhi. CII-ITC Sustainability Awards recognize and reward excellence in businesses that are seeking ways to be more sustainable and inclusive in their activities.

The Company has also bagged two International Achievement Awards for Quality & Business Excellence and Green Era Award for Sustainability. The event was held in Lisbon, Portugal in February 2019. These International Achievement Awards recognizes Company''s firm commitment to Quality and its true global sustainability. Towards IT & IOT initiatives, fence-line monitoring of ambient air quality was introduced for 8 parameters in Hosur Plant. The forms and returns under applicable Environmental Acts and Rules were made online.

Towards increasing the share of renewable energy over the years, the Company has invested in group captive mode to the tune of 35 MW wind power. Also, roof top solar power of 5.0 MW, solar water heating of 400 KW & solar air heating of 46 KW were implemented. With this Clean Development Mechanism (CDM), the renewable power contributes to 60% in overall share of power. These initiatives of renewable energy resulted in CO2 emissions reduction of about 50,000 tons during 2018-19.

In process design, efforts have been taken to minimize the generation of waste by introduction of clean technologies viz., water based Cathod Electro Deposition (CED) process; powder coating, etc. The new paint plant has been incorporated with a dry booth to overcome the usage of water. Two-wheeler paint plants in Hosur and Mysuru have Volatile Organic Compounds (VOC) abatement in paint baking oven through Regenerative Thermal Oxidizer (RTO). The waste heat from RTO is recovered and used back in the process.

The automation and advanced treatment processes have been implemented in Effluent treatment, Evaporator and Sewage treatment facilities. The waste water recycling capacity has been increased by about 450 Kilo litres daily. The chemical sludge from waste water treatment plants and paint sludge generated during paint application are used for co-processing in cement industry.

The Company''s manufacturing plants are certified under ISO 14001: 2015 standards. The Company is also promoting the certification for key stakeholders, suppliers, dealers and contractors. The certification is tracked and monitored at regular intervals through enterprise resource planning software. The online system triggers are sent to suppliers on re-certification.

The Company has successfully completed 4^th surveillance audit (Second year) in 4^th recertification audit process of Occupational Health & Safety system through implementation of BS OHSAS18001:2007 standard in Hosur & Mysuru plants. This year, Nalagarh plant was successfully added for OHSAS-18001 certification after implementing the system.

During this year, as a part of continual improvement in safety, around 663 proactive hazard control measures have been implemented across Hosur, Mysuru and Nalagarh Plants. The Plant Safety Rating System (PSRS) score improved from 211 to 237. The Company has achieved a reduction of 35% in frequency rate of accidents. Around 10 lakh man-hours have been completed with "zero injury" during civil construction activities at Hosur site last year.

Towards building a sustainable safety culture, periodical safety trainings have been organized and 10,098 employees were covered. For promoting safety, the entire month of March 2019 was celebrated as ''Safety Month'' with various competitions. Around 600 employees including contractors have actively participated and won several prizes. On the National Safety day celebration on 4^th March 2019, many of the Company''s suppliers/service providers were awarded for excellence in safety last year. Also as a part of "Buckle up & Strap up" - Road Safety campaign, various promotional activities were conducted last year.

HUMAN RESOURCE DEVELOPMENT (HRD)

Constituents of Human Resources Development framework followed at the Company include Workforce planning, Employee engagement, Performance & Compensation management, Learning and Development, Career & Succession planning and Organization Development. Towards sustenance and delivering improved results, these constituents have a structured approach, policies and standard operating procedures which are reviewed and updated periodically.

Current and future skill-based competency development are planned and executed through both in-house programs and globally acclaimed programs, continuing education, challenging project assignments and job rotations.

The Company continues to maintain its record of good industrial relations without any interruption in work. As on 31^st March 2019, the Company had 5,121 employees on its rolls.

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 -

i. that 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;

iv. that the Directors had prepared the annual accounts for the financial year ended 31^st March 2019 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.

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.

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 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.13.25 Cr:

S.No.	Name of the Institution	Amount spent (Rs.in Cr)
1.	Srinivasan Services Trust (SST)	9.76
2.	Sri Sathya Sai Central Trust	2.60
3.	National Institute of Mental Health & Neuro Sciences (NIMHANS)	0.64
4.	Voluntary Health Services (VHS)	0.25
	Total	13.25

Presently, SST is working in 5,000 villages spread across Tamil Nadu, Karnataka, Maharashtra, Himachal Pradesh and Andhra Pradesh covering a population of about 31 lakhs and 7 lakh families. SST has focussed on the areas of economic development, health care, education, environment and infrastructure in around 3000 villages so far. SST will focus in the other 2000 villages also, so that all the areas are covered in the next 3 years.

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. FINANCIAL PERFORMANCE & POSITION OF SUBSIDIARIES & ASSOCIATES

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

Subsidiaries

1. Sundaram Auto Components Limited, Chennai

2. TVS Housing Limited, Chennai

3. TVS Motor Services Limited, Chennai

4. TVS Credit Services Limited, Chennai

5. TVS Two wheeler Mall Private Limited, Chennai

6. TVS Micro Finance Private Limited, Chennai

7. Harita ARC Private Limited, Chennai

8. Harita Collection Services Private Limited, Chennai

9. TVS Commodity Financial Solutions Private Limited, Chennai

10. TVS Housing Finance Private Limited, Chennai

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

12. TVS Motor (Singapore) Pte. Limited, Singapore

13. PT TVS Motor Company Indonesia, Jakarta

14. Sundaram Holding USA Inc, Delaware, USA

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

16. Components Equipment Leasing LLC, South Carolina, USA

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

18. Premier Land Holding LLC, South Carolina, USA

Associates

- Emerald Haven Realty Limited, Chennai and its subsidiaries.

- Ultraviolette Automotive Private Limited, Bengaluru

SUBSIDIARIES / ASSOCIATES

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 of Rs.17.37 Cr during the year 2018-19 as against Rs.24.10 Cr in the previous year.

SACL declared an interim dividend of Rs.0.65 per share (6.50%) for the year ended 31^st March 2019, absorbing a sum of Rs.2.82 Cr including dividend distribution tax and paid to the Company.

National Company Law Tribunal (NCLT), Chennai approved the Scheme of Arrangement for Demerger of Automobile Trading Division (the Scheme) between Sundaram Auto Components Limited (SACL) and TVS Motor Services Limited (TVS MS). TVS MS acquired 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 the Company, as consideration for the transfer of automobile trading division by SACL, on 27^th February 2019. Since both TVS MS and SACL are the wholly owned subsidiaries of the Company, further allotment of shares by TVS MS to the Company has not affected their wholly owned subsidiary status.

TVS Housing Limited (TVSH) / Emerald Haven Realty Limited (EHRL)

TVS Housing Limited is a 100% subsidiary of the Company.

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 and Kolapakkam in Chennai.

During the year, EHRL through its subsidiaries has acquired lands in Radial Road, Karapakkam and Manapakkam, and has also been appointed as a manager for residential development at Vengaivasal, Chennai and further geographically expanded to Bengaluru through a joint development.

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 the Company, for funding TVS Credit Services Limited (TVS CS).

National Company Law Tribunal, Chennai (NCLT), has approved a Scheme of Arrangement (Scheme) on 16^th April 2019 for the redemption of Non-cumulative Redeemable Preference Shares (NCRPS) issued by TVS MS. As per the Scheme, TVS MS will be transferring its investment in TVS CS equity shares to the NCRPS holders towards redemption. After transfer of TVS CS equity shares, the Company will hold 86% of equity shares in TVS CS.

TVS Credit Services Limited (TVS CS)

TVS CS is the retail finance arm of the Company 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 Holding USA Inc. (SHUI) and its subsidiaries

SACL alongwith the holding company, viz., Sundaram-Clayton Limited have formed Sundaram Holding USA Inc. (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

Commercial production would commence during 2019-20.

Ultraviolette Automotive Private Limited (UV)

The Company has invested a sum of Rs.11 Cr in the equity shares of UV and holds 25.33% of the total capital of UV as on 31^st March 2019. UV is a start-up company engaged in developing electric mobility solutions.

8. CONSOLIDATED FINANCIAL STATEMENTS

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 as mentioned in the Notice of AGM.

The consolidated Profit before tax of the Company and its subsidiaries & associates amounted to Rs.1083 Cr for the financial year 2018-19 as compared to Rs.931 Cr in the previous year.

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 23^rd October 2018 has appointed Mrs Lalita D Gupte, 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.

On the same date, Mr K N Radhakrishnan, President & CEO was appointed as an Additional Director and also as Director & CEO in the rank of Whole-time Director for a period of five years, effective 23^rd October 2018, based on the recommendation of the NRC. His terms of appointment and remuneration were approved by the shareholders through Postal Ballot on 5^th March 2019.

The Board at its meeting held on 30^th April 2019 appointed Mr R Gopalan, as an Additional and Non-executive Independent Director of the Company, based on the recommendation of the NRC, effective 30^th April 2019.

The Company is seeking approval of the shareholders for the appointment of Mrs Lalita D Gupte and Mr R Gopalan, as Independent Directors and Mr K N Radhakrishnan, as Director, at the ensuing AGM.

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, Joint Managing Director and Mr Rajesh Narasimhan, Director, 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 / reappointment 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 of five years and are not liable to retire by rotation.

At the AGM held on 14^th July 2014, M/s T Kannan, R Ramakrishnan, C R Dua, Prince Asirvatham and Hemant Krishan Singh were appointed as IDs for the first term of five consecutive years from the conclusion of the twenty 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.

Based on the performance evaluation by both the NRC and Board, all the aforesaid IDs were re-appointed by the shareholders through Postal Ballot on 5^th March 2019 for the second term of five consecutive years from 14^th July 2019 as IDs of the Company 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.

The detailed terms of appointment of IDs is disclosed on the Company''s website in the following link http:// www.tvsmotor.com/pdf/Terms-of-Appointment-Independent-Directors.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.

a) Non-Independent Directors (Non-IDs)

IDs used various criteria and methodology practiced in Industry, prescribed by NRC for evaluation of Non-IDs viz., M/s Venu Srinivasan, Chairman and Managing Director, Sudarshan Venu, Joint Managing Director, K N Radhakrishnan, Director & CEO, H Lakshmanan, Dr. Lakshmi Venu and Rajesh Narasimhan, Directors and also of Chairman of the Board and the 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 thoughtful 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 and its effect on increased share price.

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., Automotive, Leadership / Strategy, Finance, Legal & Regulatory and Governance. The Company has a Board with wide range of expertise in all aspects of business.

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.

IDs have also ensued 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

Key Managerial Personnel (KMP)

Director & CEO

During the year under review, Mr K N Radhakrishnan, President & CEO was appointed as Director & CEO in the rank of Whole Time Director for a period of five years effective 23^rd October 2018 and the Shareholders have approved the same through Postal Ballot on 5^th March 2019.

Mr Venu Srinivasan, Chairman and Managing Director, Mr Sudarshan Venu, Joint Managing Director, Mr K N Radhakrishnan, Director & CEO, Mr K Gopala Desikan, Chief Financial Officer and Mr K S Srinivasan, Company Secretary are KMPs of the Company in terms of Section 2(51) and Section 203 of the Act, 2013 as on date of this Report.

Nomination and Remuneration Policy

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 23^rd 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.

Remuneration payable to Non-executive Independent Directors

Independent Directors of the Company (NE-IDs) every year from 1^st April 2018.

The Company derives substantial benefit through their expertise and advice, increased involvement in policy issues and also by devoting considerable time in deliberating the operational and other issues of the Company from time to time.

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 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 i.e., 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 Directors have understood the opportunities and risks to the Company''s strategy and are supportive to 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 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.

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 Auditor

The Company at its twenty sixth AGM held on 7^th August 2018 re-appointed M/s V. Sankar Aiyar & Co., Chartered Accountants, Mumbai, having Firm Registration No. 109208W 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 26^th AGM till the conclusion of 31^st 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 2^nd year in the second 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 the 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 Auditors

The Secretarial Audit Report for the year 2018-19, given by M/s S Krishnamurthy & Co., Company Secretaries, 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 30^th April 2019 has re-appointed M/s. S Krishnamurthy & Co., Practising Company Secretaries, Chennai having Registration No.2215 allotted by the Institute of Company Secretaries of India as Secretarial Auditors for the financial year 2019-20.

Cost Auditor

In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board 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 the 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.6 lakhs has been fixed by the Board as remuneration in addition to reimbursement of 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 for 2017-18 on 5^th September 2018 in XBRL format with Registrar of Companies.

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 Director & 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 Regulation 17 (8) of the Listing Regulations 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 perspective, in the prescribed format is given as Annexure VII to this Report and is available on the Company''s website viz., https://www.tvsmotor.com/pdf/ BUSINESS-RESPONSIBILITY-REPORT-2019.pdf.

13.POLICY ON VIGIL MECHANISM

The Company has adopted a Policy on Vigil Mechanism in accordance with the provisions of 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 30^th April 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 https://www.tvsmotor.com/pdf/Whistle-Blower-Policy-2019.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:

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 the Annual Return in prescribed form is given as Annexure-II to this Report, in terms of the requirements of Section 134(3)(a) of the Act, 2013 read with the Companies (Accounts) Rules, 2014.

The same is available on the company''s website in the following link https://www.tvsmotor.com/pdf/Annual-Return-2019.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 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 the Companies (Meetings of Board and its Powers) Rules, 2014.

Details of loans / guarantees / investments made:

The details of loans and guarantees under Section 186 of the Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, for the financial year 2018-19 are given as Annexure-VI to this Report. On loans granted to the Employees, the Company has charged interest as per its remuneration policy.

Please refer note No. 3 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 holding Company viz., Sundaram-Clayton Limited. The Directors 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.

For and on behalf of the Board of Directors

Chennai VENU SRINIVASAN

30^th April 2019 Chairman

Mar 31, 2018

The Directors have pleasure in presenting the twenty-sixth Annual Report and the audited accounts of the Company for the year ended 31^st March 2018.

1. COMPANY PERFORMANCE

The Company continued to grow ahead of the industry for the third year in succession, registering sales of 33.67 lakh two-wheelers in 2017-18, growing by 17.8% over last year. Sale of motorcycles increased by 25.8% and scooters by 30.4%. Three-wheeler sales of the Company increased by 42.5% in 2017-18. Sale of spare parts grew by 16.6%.

The Company continues to lead the customer satisfaction in products and services, and bagged top honors at the J.D. Power 2018 India Two-Wheeler Initial Quality Study (2WIQS), Automotive Product Execution & Layout (ApEAL) study and Two-Wheeler Customer Service Index (2WCSI). The Company has been top ranked in JD Power 2WCSI since its inaugural study in 2016.

The revenue for the year ended 31^st March 2018 are not comparable with the previous year consequent to introduction of GST effective 1^st July 2017. For comparison, the total revenue of the Company excluding excise duty increased from Rs. 12,309 Cr in the previous year to Rs. 15,274 Cr in the current year. Profit before tax increased from Rs. 699 Cr in the previous year to Rs.879 Cr in the current year. Similarly, Profit after tax increased from Rs. 558 Cr in the previous year to Rs.663 Cr in 2017-18.

2. FINANCIAL HIGHLIGHTS

Details	Year Ended Year Ended 31-03-2018 31-03-2017
SALES
Quantitative	(Numbers in Lakhs)
Motorcycles	13.55	10.77
Mopeds	8.77	9.11
Scooters	11.35	8.70
Three-wheelers	0.99	0.69
Total vehicles sold	34.66	29.27
Financials	(Rupees in Crores)
REVENUE
Motorcycles	6075.88	4628.13
Mopeds	2149.74	2069.74
Scooters	4338.29	3337.84
Three-wheelers	856.18	647.96
Spares & Accessories and raw	1547.97	1327.59
materials
Other Operating Income	161.60	124.05
Other Income	144.78	173.37
Revenue excluding excise duty	15274.44	12308.68
Excise Duty	# 343.22	1054.75
Revenue including excise duty	15617.66	13363.43

Details	Year Ended 31-03-2018	Year Ended 31-03-2017
	(Rupees in Crores)
EBITDA	1273.99	1030.44
Less:
Finance Charges & Interest (Gross)	56.62	43.95
Depreciation	338.73	287.81
Profit before tax	878.64	698.68
Provision for tax	216.05	140.60
Profit after tax	662.59	558.08

# Includes Excise Duty upto June 2017.

3. DIVIDEND

DIRECTORSâ REPORT TO THE SHAREHOLDERS

The Board of Directors of the Company (the Board) at their meeting held on 1^st November 2017, declared a first interim dividend of Rs.2/- per share (200%) for the year

2017-18 absorbing a sum of Rs. 114.36 Cr including dividend distribution tax. The same was paid to the shareholders on 14^th November 2017.

The Board at its meeting held on 26^th February 2018 declared a second interim dividend of Rs. 1.30 per share (130%) for the year 2017-18 absorbing a sum of Rs.73.27 Cr including dividend distribution tax. The same was paid to the shareholders on 12^th March 2018.

Thus, the total amount of both dividends 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 absorbing Rs.187.63 Cr including dividend distribution tax, since the Company has set-off its dividend distribution tax payable under Section 115-O(1A) of the Income Tax Act, 1961 to the extent available 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.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENTS Two-wheeler

In the domestic market, two-wheeler industry sales grew from 176 lakh units in 2016-17 to 202 lakh units in 2017

18, registering a growth of 15% over last year. The first half of the year saw a growth of 10% led by re-stocking required due to BSIII to BSIV transition. The second half grew by 20% over the same period of 2016-17 which was affected by demonetization.

Scooter as a category continued to gain category share in total two-wheeler industry. Scooters grew at 20% (from 56 lakh units to 67 lakh units) led by urban demand and the category share increased from 32% in 2016-17 to 33% in year 2017-18.

The motorcycle category grew at 14% (126 lakh units). Within motorcycles, continued traction in urban demand enabled the premium segment to grow by 11% (from

17.1 lakh units in 2016-17 to 18.9 lakh units in 2017-18). Commuting segment also grew by 15% (from 84 lakh units in 2016-17 to 97 lakh units in 2017-18) compared to a flat growth in past 5 years. This trend change in commuter segment was triggered by revival of rural demand.

Crude oil prices recovered steadily during 2017-18 and drove economic recovery in the international markets. Currencies stabilized and foreign exchange availability improved in affected countries of Africa, leading to recovery of the exports industry in 2017-18 from a low base in

2016-17. Bangladesh, Mexico, Argentina, Philippines and West Africa saw an increase in demand. Consequently, exports of two-wheeler from India grew by 20% during

2017-18.

Three-wheeler

Overall three-wheeler small passenger industry (3 plus 1 segment) grew by 39% in 2017-18 (from 4.58 lakh units in

2016-17 to 6.35 lakh units in 2017-18). Domestic industry grew by 41% and exports from India grew by 37% over

2016-17. Growth in domestic passenger market was largely driven by significant growth in Maharashtra State due to opening of permits. Export market growth was a result of market recovery in Nigeria and Egypt and expansion of some new markets.

BUSINESS OUTLOOK AND OVERVIEW

Economic activity is expected to improve in 2018-19, benefiting from improved macro-economic environment in both domestic and global markets.

In India, focus on agriculture and rural development rolled out in the recent union budget, supported by possibility of a normal monsoon, is expected to positively influence demand from rural markets. Improving credit growth supported by bank re-capitalization, along with continued government focus on infrastructure is expected to drive growth.

Crude prices have been rising over last one year and this trend is expected to continue in 2018. On one hand, this trend will continue to aid export market growth, however on the other hand, rising commodity prices will put cost pressures in the year 2018-19.

Consequently, the growth in two-wheeler industry during

2018-19 is expected to be around 8-10% over 2017-18.

New Product Launches and Initiatives

The Company has a strategic partnership with BMW Motorrad to develop and manufacture sub-500cc bikes both for domestic and global markets. The Company manufactured and supplied 26,471 units of G 310 R and G 310 GS in the year 2017-18 for BMW Motorrad Company.

During the year 2017-18, the following new products and variants were launched.

TVS Apache RR 310:

TVS Apache RR 310 marks a significant step in Companyâs history -TVS forays into superpremium motorcycles with this launch.

Inspired by 35 years of TVS Racing, TVS Apache RR 310 combines superior

performance & riding dynamics with a fully faired sporty design.

The motorcycle gets a 312cc, single cylinder, 4V, liquid cooled, 6-speed engine that delivers a top speed of 160 kmph and acceleration from 0-60 kmph in just 2.9 seconds. TVS Apache RR 310 comes with an all-new, race origin, light-weight trellis-frame chassis for enhanced stiffness in straights and flex for dynamic cornering capability, that result in best-in-class riding dynamics.

The product created an instant excitement and garnered acceptance among the racing enthusiasts.

TVS Apache RTR 160 4V:

The Apache RTR 160 4V is the latest addition to the Apache portfolio, itâs not a sports bike, itâs a Race Machine. This machine is born out of the six-time Indian National Motorcycle Championship (INMRC) winning motorcycle -

(Group B) RTR 165. Every feature on the Apache is honed on the race track to deliver the best in racing performance. The TVS Apache RTR 160 4V is available in both Carburettor and Electronic Fuel Injection (EFI) variants, with the latter christened as TVS Apache RTR 160 Fi 4V. Staying true to its racing pedigree, the TVS Apache RTR 160 4V has the powerful 160cc engine, enabling the best performance in its class and best-in-class power-to-weight ratio. The motorcycle does 0-60 kmph in 4.8 seconds(EFI) and 4.73 seconds (Carburettor).

Designed for Gen-Z, TVS NTORQ 125 provides revolutionary riding experience with cutting edge style, performance and technology. Based on TVS racing pedigree, TVS NTORQ comes with a 125cc, 3V CVTi-Rev

engine. The first ever Bluetooth connected scooter with

TVS Smart Xonnect, TVS NTORQ is equipped with caller ID, Navigation assist and app-enabled technology.

Stealth Aircraft-inspired design and 30 industry-first features make TVS NTORQ a one of its kind product in the segment.

The product has garnered raving reviews and aims to gain mindshare among the youth of today.

TVS Jupiter Classic:

Since its inception, Jupiter brand has represented novelty. Launched in 2013, the scooter has now reached the 2.3 million mark in sales. The ability to develop tailor-made scooters for customers is the inspiration behind the

creation of TVS Jupiter & its variants. The new Jupiter Classic edition is an embodiment of style. It comes loaded with a host of unique features such as âClassic-Editionâ Decals, elegant Full Chrome Mirrors, a classy Chrome Pillion Handle and a choice of exclusive colours - Sunlit Ivory and Autumn Brown. Thoughtfully designed features like a Smart USB Charger, stylish windshield, Classy backrest, Side Stand Indicator and a comfortable Dual Tone Seat ensure a great riding experience.

All this and more makes the âClassic-Editionâ a true example of brand Jupiterâs philosophy, âZyada ka Faydaâ, offering more than 15 features and benefits for the Indian commuter.

TVS XL100 HD:

XL100 Heavy Duty vehicle aims to be a partner of the customer in his success by providing more utility, power and ruggedness through more pick up, âDuragripâ tyre and heavy duty wheel assembly.

The superior aualitv of the

Companyâs products and services is well established again in the recent JD Power Study 2018.

It is a significant feat for the Company that in the JD Power APEAL study 2018, its products have been ranked No. 1 in all the product categories the Company participated in. TVS Jupiter in scooter segment, TVS Apache RTR 180 in motorcycle premium segment and TVS Star City Plus in motorcycle economy segment holds the top position.

The Company retained the No.1 position in the CSI study 2018 by JD Power for third year in a row.

Domestic Sales

The Company achieved sales of 28.7 lakh units of two-wheelers in the domestic market. With these sales, the Company registered a growth of 15.5% in the year 2017-18 over last year.

In motorcycles, the Company achieved sales of 9.2 lakh units and registered a growth of 18.6% over 2016-17. TVS Apache accelerated its growth trend with 35% growth over last year. New TVS Apache RR 310 was received very well in the market and is contributing well to the Apache brand.

In scooters, the Company achieved sales of 11.0 lakh units and registered a growth of 33% over 2016-17. TVS Jupiter maintained the momentum with a 32% growth over last year. The growth was largely supported by the special âClassic Editionâ which also helped in bringing a premium image to the product. Launch of TVS NTORQ 125 is expected to bring a new segment of customers.

The Company has strong distribution network of authorized dealers across India and continuously seeks to increase its reach.

Exports sales - two-wheeler and three-wheeler

The Companyâs two-wheeler exports in the year 2017-18 were at 4.9 lakh units and witnessed an improvement with a growth of 33.7% over 2016-17.

The Companyâs three-wheeler exports in the year 2017-18 were at 0.8 lakh units and recorded a 44.4% growth over

2016-17.

Implementation of Goods and Services Tax Act (GST)

Effective 1^st July 2017, the Company has successfully & seamlessly transitioned to new GST regime. The Company also supported dealers & suppliers to change over without any disruption in their respective businesses. The Company

has passed on the benefits arising out of GST changeover to its customers.

Opportunities and Threats

Proposed thrust in rural India, efficient implementation of various Government schemes such as minimum support price of 1.5 times of the production cost and improved rural economy will aid improvement of two-wheeler penetration.

Growing middle class, aspirational life style, need for mobility and increased penetration levels will continue to trigger growth of two-wheeler industry. Impetus from 7^th pay commission and payment of related arrears are further expected to boost the two-wheeler industry.

Alternate energy based mobility vehicles and solutions have gained traction in the year. Rising pollution levels in Indian cities and target to become energy independent are the major factors for such a push towards greener mobility.

The Company is committed to support this initiative by developing suitable technology and business solutions. Strong presence of the Company in all segments of twowheeler industry, planned new launches and expanded network of dealers will help the Company to consolidate its gain further and grow ahead of the Industry in the coming years.

RISKS AND CONCERNS

Good monsoon and stable policy environment are essential for growth in domestic two-wheeler demand. The sustained momentum in scooters and motorcycles and success of planned launches is vital to achieve business objectives.

International factors such as geo-political scenarios and rising crude oil prices are being continuously monitored for both risks and opportunities.

Recent rise in commodity prices and intensifying competition with pricing led marketing actions remain a concern for bottom-line. The Company will initiate various cost reduction measures to mitigate this risk.

The Company is also investing in greener emerging technologies towards the future consumer preference shifts.

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 Companyâs overall risk appetite, strategy, severity and probability of occurrence.

The risk function is looked after by a team under CEO of the Company. 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 16^th May 2018 for overseeing all the risks that the Organization faces such as strategic, financial, marketing, IT, legal, regulatory, reputational and other risks and recommends suitable action. Risk mitigation policy has already been approved by the Board.

OPERATIONS REVIEW

Total Quality Management (TQM)

TQM continues to be the backbone of the Companyâs approach for sustainable growth through customer satisfaction. Continuous monitoring of performance measures and immediate actions to address such identified gaps have strengthened the process across the Company.

This year, primary focus was on problem solving for recurrence prevention through systemic root-cause analysis. The Company has enhanced its executives and managersâ problem-solving competency by certifying 111 of them in Green belt and Black belt in the current year. On the whole, 518 employees are now Green belt and Black belt certified. All employees have been involved towards achieving business goals. Significant contributions from the highly committed workmen through suggestion schemes and Quality Control Circle (QCC) projects have yielded significant results in achieving Quality Cost Delivery (QCD) targets and eliminating unsafe incidents.

Cost Management

Process improvement, waste elimination and productivity improvements across the supply chain will continue to receive greater attention. The Company will pursue process innovation, value engineering and alternate sourcing to reduce material cost during this year.

Research & Development (R&D)

The continued pursuit of engineering excellence, best-in-class quality and technology development by the Companyâs Research and Development (R&D) team has resulted in delivery of highly appealing new products during the year, namely, Apache RR 310, TVS NTORQ 125 and TVS Apache RTR 160 4V.

The team is continuously working on many advanced engine technologies to improve fuel efficiency, performance and to meet future emission norms for international and domestic markets. The team is working towards timely readiness of the Companyâs product portfolio compliant with BSVI emission norms. It continues to work on hybrid technology, which has reached a mature state and advanced brake systems technology for improved safety.

The R&D team continues their efforts in developing cutting-edge technologies that are relevant for the near and long term future requirements of the Companyâs business plans. These developments are centered on customers, emerging needs of environment, safety and sustainability. The Company also collaborates with leading research establishments and educational institutions, both within and outside the Country to explore and develop breakthrough opportunities. The R&D team has so far published 110 technical papers in national and international conferences.

TVS Racing continues to add valuable inputs to the new product development by leveraging its advanced capabilities and racing experience. In the last year, the Companyâs racing team had 93% winning positions in the events that it participated. TVS Racing has won 14 out of 16 National championships.

Information Technology (IT)

The Company enhanced the customer engagement through mobile apps and digitizing customer touch points at dealerships. The Company also launched TVS NTORQ

app with the first-of-its-kind connected scooter launched in February 2018.

The Company continues to implement several projects to improve its efficiency, transparency and process control across supply chain from dealer to supplier. Various initiatives on industry 4.0 are being adopted for improving quality and waste elimination.

As part of continuous improvement and benchmarking, the Companyâs IT systems were audited by external experts and their recommendations were implemented. To enhance information security, various new IT security tools were implemented and periodic audits are conducted by external experts and necessary control measures are being taken.

The Company is ISO 27001:2013 certified for all its manufacturing units and sales offices. Business continuity plan for major business and design applications have been implemented and tested. The Company is apprised of Capability Maturity Model (CMM) level 3 for its IT development process.

INTERNAL CONTROL AND THEIR ADEQUACY

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 an Independent Valuer and presented to the Audit Committee. Based on the periodical testing, the framework is strengthened, from time to time, to ensure adequacy and effectiveness of Internal Financial Controls.

Occupational Health & Safety (OHS)

The Company was conferred with âEnvironmental Leadership Awardâ from Government of Himachal Pradesh in recognition of Companyâs outstanding contribution towards environment protection, conservation and sustainable development. The Company also published its first Sustainability Report in accordance with CORE Reporting principles of the GRI G4 Guideline in public domain. Companyâs manufacturing plants are certified under revised ISO 14001: 2015 standards.

Reducing environment footprint is the prime focus of the Company. Hosur and Mysuru plants have achieved Zero-Liquid Discharge (ZLD) by recycling and reusing of treated trade effluent. Following conservation measures have been adopted towards water conservation viz., water accounting, waterless urinals, dish washer in canteen and fully automatic vehicle wash system. The Company is continuously increasing the share of renewable energy. It was 64% during 2017-18 compared to 29% during 2016

17. These initiatives helped the Company to reduce its Carbon foot print.

Hazardous wastes viz., paint sludge and chemical sludge are co-generated in cement factory and onsite storage of hazardous waste in secured landfill is nil. Towards abatement of Volatile Organic Compounds (VOC), Regenerative Thermal Oxidizer (RTO) has been commissioned in Hosur & Mysuru plants.

The measurement of ambient VOC is made online to Care Air Centre of Tamil Nadu Pollution Control Board. Direct in-situ measurement of key parameters like pH; Chemical Oxygen Demand (COD); Biological Oxygen Demand (BOD); Total Suspended Solids (TSS) were introduced in Sewage Treatment Plant, Hosur.

Towards digitization initiative, forms and returns under applicable Environmental Acts and Rules were made online.

The Company has successfully completed 2^nd surveillance audit in 4^th re-certification audit process of Occupational Health & Safety System through implementation of BS OHSAS18001:2007 standard in Hosur & Mysuru plants. During the year, as a part of continual improvement in safety, around 751 proactive hazard control measures have been implemented across Hosur, Mysuru and Nalagarh Plants. The Plant Safety Rating System (PSRS) score improved from 195 to 211 and all plants have sustained âGoldâ status. The Company has achieved a reduction of 53% in frequency rate of accidents & 98% in severity rate of accidents. 13 lakh man-hours have been completed with âzero injuryâ during plant expansion civil construction activities at Hosur site last year. Towards building a sustainable safety culture, periodical safety trainings have been organized and 15746 employees were covered. Also as a part of âBuckle up & Strap upâ - Road Safety campaign, around 300 test riders & drivers were trained on road safety.

HUMAN RESOURCE DEVELOPMENT (HRD)

Constituents of Human Resource Development framework followed by the Company include Workforce planning, Employee Engagement, Performance & Compensation Management, Learning and Development, Career & Succession Planning and Organization Development. Towards sustenance and delivering improved results, these constituents have a structured approach, policies and standard operating procedures which are reviewed and updated periodically.

The Company continues to maintain its record of good industrial relations without any interruption in work. As on 31^st March 2018, the Company had 5,184 employees on its rolls.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Companyâs objectives, projections, estimates and expectations may be âforward looking statementsâ within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companyâs operations include, 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. DIRECTORSâ RESPONSIBILITY STATEMENT

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

i. t hat 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;

Company at the end of the financial year and of the profit of the Company for the year under review;

Hi. 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. t hat the Directors had prepared the annual accounts for the financial year ended 31^st March 2018 on a âgoing concern basisâ;

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. t hat 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 Companyâs 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.

S.No	Name of the Institution	Amount spent (Rs. in Cr)
1.	Srinivasan Services Trust (SST)	7.08
2.	Sri Sathya Sai Central Trust	3.00
3.	National Institute of Mental Health & Neuro Sciences (NIMHANS)	0.65
4.	Voluntary Health Services	0.25
	Total	10.98

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 economic development, health care, quality education, environment and infrastructure.

Of the 5,000 villages, 3772 villages (23,60,138 population and 5,46,806 families) have been funded by the Company during the year.

Achievements in 3,772 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. 3000/- 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 disposed 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 & ASSOCIATE

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

Subsidiaries

1. Sundaram Auto Components Limited, Chennai

2. TVS Housing Limited, Chennai

3. TVS Motor Services Limited, Chennai

4. TVS Credit Services Limited, Chennai

5. TVS Two-wheeler Mall Private Limited, Chennai

6. TVS Micro Finance Private Limited, Chennai

7. Harita ARC Private Limited, Chennai

8. Harita Collection Services Private Limited, Chennai

9. TVS Commodity Financial Solutions Private Limited, Chennai

10. TVS Housing Finance Private Limited, Chennai

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

12. TVS Motor (Singapore) Pte. Limited, Singapore

13. PT TVS Motor Company Indonesia, Jakarta

14. Sundaram Holding USA Inc, Delaware, USA

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

16. Components Equipment Leasing LLC, South Carolina, USA

17. Sundaram-Clayton (USA) LLC, South Carolina, USA (Formerly known as Workspace Projects LLC)

18. Premier Land Holding LLC, South Carolina, USA Associate

- Emerald Haven Realty Limited, Chennai and its subsidiaries.

SUBSIDIARIES

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), Gruppo 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 the Company, on rights basis, in multiple tranches.

SACL proposes to demerge its automobile trading division alongwith its relevant assets and liabilities to TVS Motor Services Limited (TVS MS).

Accordingly, the Board of SACL approved a Scheme of Demerger at its meeting held on 26^th April 2018. Since both SACL and TVS MS are wholly owned subsidiaries of the Company, shares issued by TVS MS, based on the valuation of the demerging division, to the Company (TVS Motor Company Limited). For 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.

During the year under review, Mr Rajesh Narasimhan, Director of the Company was appointed as the Chief Executive Officer of TVS Motor (Singapore) Pte Limited effective 1^st January 2018.

TVS Motor Services Limited (TVS MS)

During the year under review, the Company acquired the entire equity share capital of TVS MS on 7^th September 2017.

In terms of Section 2(87) of the 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 the Company, for funding TVS CS. The Company acquired Non-Cumulative Redeemable Preference shares (Preference Shares) of TVS MS held by Sundaram - Clayton Limited (SCL) and Lucas-TVS Limited (Lucas-TVS) on 18^th December 2017 and thereby holds 100% of the Preference Share Capital of TVS MS.

The Company settled the consideration to SCL and Lucas-TVS by transferring its holding in equity shares of TVS CS, i.e, 1,35,17,547 equity shares in aggregate, to the said companies, based on the valuation report obtained from an Independent Valuer, for the acquisition of Preference Shares.

TVS MS has filed 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 the Company, in proportion of the Preference Shares holding in the total paid-up capital of TVS MS.

On approval of the Scheme, TVS CS, a NBFC company, will become a direct subsidiary of the Company. 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)

TVS CS is the retail finance arm of the Company for financing 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 CSâs 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 in single line i.e, Rs. 5,002 Cr during the previous year registering a growth of 23%. Total income during the financial year 2018 increased to Rs. 1340.43 Cr from Rs. 1114.79 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. 169.88 Cr as against Rs. 135.56 Cr during the previous year with a growth rate of 25%.

The subsidiaries of TVS CS are yet to commence their operations.

Sundaram Holding USA Inc. (SHUI) & its subsidiaries

SACL along with the holding company, viz., Sundaram-Clayton Limited has made investment in SHUI, a company established under the applicable provisions of Laws of The United States of America.

SHUIâs 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 has invested a sum of USD 20,399,250 in the ordinary shares of SHUI and holds 75% of the total capital of SHUI as on 31^st March 2018.

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 after tax for the financial year ended 31^st March

2018 was USD 2,278,295 as against USD 939,237 in the previous year ended 31^st March 2017 due to pre-production expenses.

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 the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (LODR) along with a separate statement containing the salient features of the financial performance of subsidiaries I associates in the prescribed form. The audited consolidated financial statements together with Auditorsâ Report form part of the Annual Report.

The consolidated Profit Before Tax of the Company and its subsidiaries & associate amounted to Rs. 931 Cr for the financial year 2017-18 as compared to Rs. 658 Cr in the previous year.

9. DIRECTORS & KEY MANAGERIAL PERSONNEL Independent Directors (IDs)

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

At the annual general meeting held on 14^th July 2014, M/s T Kannan, R Ramakrishnan, C R Dua, Prince Asirvatham and Hemant Krishan Singh were appointed as IDs for the first term of five consecutive years from the conclusion of the twenty 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.

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 Companyâs shares, remuneration and expenses, insurance and indemnity. The IDs are provided with copies of the Companyâs 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.

The detailed terms of appointment of IDs is disclosed on the Companyâs website in the following link http://www.tvsmotor. com/pdf/Terms-of-Appointment-Independent-Directors.pdf

Separate meeting of Independent Directors

During the year under review, a separate meeting of IDs was held on 26^th February 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 viz., M/s Venu Srinivasan, Chairman and Managing Director, Sudarshan Venu, Joint Managing Director, H Lakshmanan, Dr. Lakshmi Venu and Rajesh Narasimhan, 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 Companyâs 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 Chairmanâs 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 Boardâs 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, Marketing, Legal, Information Technology, Administration and International Economy. 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, directorsâ selection process and cohesiveness on key issues and satisfied themselves that they were adequate.

They were satisfied with the Companyâs performance in all fronts and finally 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 appointment / re-appointment

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.

Dr. Lakshmi Venu and Mr H Lakshmanan, are liable to retire by rotation, at AGM, and being eligible, offer themselves for re-appointment.

As per the recent amendment to SEBI (LODR) Regulations, with effect from 1^st April 2019, the appointment or continuation by a person as a Non-Executive Director who attained the age of 75 years requires a special resolution of the Shareholders.

The tenure of Mr H Lakshmanan, NE-ID of the Company aged 84 years, who is liable to retire by rotation at the ensuing AGM, continues beyond 1^st April 2019 upon re-appointment, and hence sought approval of the shareholders through Special Resolution.

Considering his six decades of experience in the Group, the Board recommended his re-appointment to the Shareholders based on the performance evaluation by NRC.

Mr Rajesh Narasimhan was appointed as an Independent Director on 11^th August 2017 and ceased as Independent Director effective 31^st October 2017, consequent to his proposed appointment as Chief Executive Officer in TVS Motor (Singapore) Pte Limited, a wholly owned subsidiary of the Company.

On 1^st November 2017, the Board appointed Mr Rajesh Narasimhan as an Additional Director to hold office upto the date of ensuing AGM and proposed his appointment as a Director, liable to retire by rotation.

The Shareholders have also approved his appointment in the place of profit, as required under Section 188 of the Act, 2013, through Postal Ballot on 21^st December 2017.

The Directors have recommended their appointment / re-appointment 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)

Joint Managing Director:

During the year under review, Mr Sudarshan Venu was reappointed as the Joint Managing Director of the Company for a further period of five years commencing from 1^st February 2018 and the Shareholders have approved the same through Postal Ballot on 21^st December 2017.

Change in Chief Financial Officer:

During the year under review, Mr S G Murali, retired as Chief Financial Officer of the Company on 25^th September

2017 upon reaching superannuation and Mr K Gopala Desikan was appointed as the Chief Financial Officer, effective 1^st November 2017, based on the recommendation of the Nomination and Remuneration Committee and Audit & Risk Management Committee.

Mr Venu Srinivasan, Chairman and Managing Director, Mr Sudarshan Venu, Joint Managing Director, Mr K N Radhakrishnan, Chief Executive Officer, Mr K Gopala Desikan, Chief Financial Officer and Mr K S Srinivasan, Company Secretary are KMP of the Company in terms of Section 2(51) and Section 203 of the Act, 2013 as on date of this Report.

Nomination and Remuneration Policy

Nomination and Remuneration Policy was approved by the Board at its meeting held on 23^rd September 2014 and amended at the Board meeting held on 16^th 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 Companyâs strategic long term goals, appropriateness, relevance and risk appetite.

Remuneration payable to Non-Executive Independent Directors

The Shareholders, at the 20^th AGM of the Company, held on 12^th September 2012, approved the remuneration, by way of commission not exceeding 1% of the Net profits, in aggregate, payable to the Non-Executive Independent Directors of the Company (NE-IDs) for every year, for a period of 5 years commencing from 1^st April 2013 to 31^st March 2018.

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.

In view of the increased involvement and participation by such NE-IDs and having regard to their contribution and involvement in policy issues concerning the Companyâs operations, the Company, based on the recommendations of NRC and the Board, at the AGM held on 11^th August 2017, the Shareholders, by way of a special resolution, have renewed the payment of commission to NE-IDs, on similar terms for each financial year effective 1^st April 2018.

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 Stakeholdersâ 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 IDsâ meeting held on 26^th February 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 was assessed against a range of criteria such as contribution to the development of business 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 Companyâs strategy and are supportive of the direction articulated by the management team towards consistent improvement.

Committees

Board delegates specific mandates to Board constituted Committees, to optimize Directorsâ 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;

- Stakeholdersâ Relationship Committee for redressing investors grievances; and

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

The Board was satisfied with the overall effectiveness and decision making of all Committees. The Board reviewed each Committeeâs terms of reference to ensure that the Companyâs 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 100 listed companies as at 31^st March 2018 and accordingly, the Board constituted a separate Risk Management Committee on 16^th May 2018 as required under the SEBI (LODR) Regulations, 2015. The details of composition of Committee and its charter is discussed in the Corporate Governance Report attached to this Report.

Details of all other 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 2017-18 is provided as part of Corporate Governance Report attached to this Report.

10. AUDITORS Statutory Auditors

The Company at its twenty second AGM held on 14^th July 2014 appointed M/s V. Sankar Aiyar & Co., Chartered Accountants, Mumbai, having Firm Registration No. 109208W allotted by The Institute of Chartered Accountants of India, as Statutory Auditors of the Company to hold office, for four consecutive years in the first 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 V. Sankar Aiyar & Co, Chartered Accountants have completed their first term of five consecutive years.

It is therefore proposed to re-appoint them as Statutory Auditors for the second term of five consecutive years from the conclusion of the ensuing AGM till the conclusion of the 31^st AGM of the Company.

The Company has obtained necessary certificate under Section 141 of the Act, 2013 conveying their eligibility for being the Statutory Auditors of the Company for the year 2018-19.

The Auditorsâ 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 Auditors

As required by Section 204 of the Act, 2013, the Secretarial Audit Report for the year 2017-18, of M/s S Krishnamurthy & Co., Company Secretaries, 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 16^th May 2018 has re-appointed M/s. S Krishnamurthy & Co., Practising Company Secretaries, Chennai having Registration No.2215 allotted by the Institute of Company Secretaries of India, as Secretarial Auditors for the financial year 2018-19.

Cost Auditor

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.5 lakhs has been fixed by the Board as remuneration in addition to reimbursement of travelling and out-of-pocket expenses and all applicable taxes for the year 2018-19, which is 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 2016-17 on 7^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 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 perspective, in the prescribed format is given as Annexure-VIII 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 Companyâs 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 Companyâs Code.

The Board at its meeting held on 16^th 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 Companyâs website in the following link https://www.tvsmotor.com/pdf/Whistle-Blower-Policy-2018.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 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 the Annual Return in prescribed form is given as Annexure-II to this Report, in terms of the requirements of Section 134(3) of the Act, 2013 read with the Companies (Accounts) Rules, 2014.

Employeeâs 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 Companyâs performance is given as Annexure-V to this Report.

Details of material related party transactions:

Details of material related party transactions under Section 188 of the Act, 2013 read with the Companies (Meetings of

Board and its Powers) Rules, 2014, are given in Annexure-VI to this Report in the prescribed form.

Details of loans / guarantees / investments made:

The details of loans and guarantees under Section 186 of the Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, for the financial year

2017-18 are given as Annexure-VII to this Report. On loans granted to the Employees, the Company has charged interest as per its remuneration policy, in compliance with 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 specified under Section 143(12) of the Act, 2013.

Other laws:

During the year under review, the Company has not received any complaints 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 holding Company viz., Sundaram-Clayton Limited. The Directors 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 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.

For and on behalf of the Board of Directors

Chennai Venu Srinivasan

16^th May 2018 Chairman

Mar 31, 2017

The directors have pleasure in presenting the twenty-fifth annual report and the audited financial statements for the year ended 31st March 2017.

1. COMPANY PERFORMANCE

The Company continued to grow ahead of the industry for the third year in succession, registering sales of 28.58 lakhs two-wheeler in 2016-17, growing by 11% over last year. Sales of motorcycles increased by 6% and scooters by 7%. Three-wheeler sales of the Company declined by 38% in 2016-17, mainly on account of restricted availability of foreign exchanges in some of the African countries. Sales of spare parts grew by 9%. Till October 2016, the domestic sales of the Company grew by 22%. Post demonetization, the two wheeler Industry declined by 5%. The normalcy in availability of cash is slowly getting restored.

The Company also extended significant discounts in the last week of March 2017 to the dealers to enable them to sell BS III emission compliant stocks remaining with them consequent to the order of Honâble Supreme Court.

The Companyâs products and services continued to top the quality charts. Across categories almost all the products have bagged top honours in the J.D. Power 2017 Study. For the third consecutive year, the Company was rated No.1 Two-wheeler manufacturer of the country. In addition, the Company also topped in customer service in inaugural JD Power Customer Satisfaction Index (CSI 2016).

Total revenue of the Company including other income increased from Rs.12,195 Cr in the previous year to Rs.13,363 Cr in the current year. Despite lower sales from November 2016 to March 2017 due to demonetization and impact of discount to the dealers to sell BS III stocks, Profit before tax (PBT) for the year 2015-16 increased from Rs.628.94 Cr in the previous year to Rs.698.68 Cr in the current year. Similarly, PAT increased from Rs.489.28 Cr in the previous year to Rs.558.08 Cr in 2016-17.

2. FINANCIAL HIGHLIGHTS

Details	Year ended 31-03-2017	Year ended 31-03-2016
SALES
Quantitative	(Numbers in lakhs)
Motorcycles	10.77	10.17
Mopeds	9.11	7.38
Scooters	8.70	8.13
Three-wheeler	0.69	1.11
Total vehicles sold	29.27	26.79

Financials	(Rupees in crores)
Motorcycles	5003.91			4570.75
Mopeds	2308.37			1721.60
Scooters	3633.11			3315.66
Three-wheelers	662.25			1040.88
Spares & Accessories
and raw materials	1456.18			1304.41
Other Operating Income	126.24			137.62
Other Income	173.37			103.85
Sales (including Excise duty) &
other income		13363.43		12194.77
EBITDA		1030.44		913.72
Less:
Finance Charges & Interest (Gross)			43.95	48.73
Depreciation		287.81		236.05
Profit before tax		698.68		628.94
Provision for tax		140.60		139.66
Profit after tax		558.08		489.28

3. DIVIDEND

The board of directors of the Company (the board) at their meeting held on 27th October 2016, declared a first interim dividend of Rs.1.25 per share (125%) for the year 2016-17, thereby absorbing a sum of Rs.70.25 Cr including dividend distribution tax. The same was paid to the shareholders on 10th November 2016.

The board again at its meeting held on 6th March 2017 declared a second interim dividend of Rs.1.25 per share (125%) for the year 2016-17, thereby absorbing a sum of Rs.71.04 Cr including dividend distribution tax. The same was paid to the shareholders on 18th March 2017.

Thus, the total amount of both dividends for the year ended 31st March 2017 aggregated to Rs.2.50 per share (250%) on 47,50,87,114 equity shares of Re.1/- each.

The board does not recommend any further dividend for the year under consideration.

4. DIRECTORSâ RESPONSIBILITY STATEMENT

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

i. that in the preparation of annual accounts for the financial year ended 31st 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 31st March 2017 on a âgoing concern basisâ;

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 Companyâs value system through Srinivasan Services Trust (SST), 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.

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.919.50 lakhs:

S.No.	Name of the Institution	Amount spent (Rs. in Lakhs)
1	Srinivasan Services Trust	470.00
2	Sri Sathya Sai Central Trust	285.00
3	Sri Sathya Sai Loka Seva Trust	100.00
4	National Institute of Mental Health and Neurosciences	64.50
	Total	919.50

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 areas 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 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 & ASSOCIATE

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

Subsidiaries

1. Sundaram Auto Components Limited, Chennai;

2. TVS Housing Limited, Chennai;

3. PT. TVS Motor Company Indonesia, Jakarta;

4. TVS Motor Company (Europe) B.V., Amsterdam, Netherlands;

5. TVS Motor (Singapore) Pte. Limited, Singapore;

6. Sundaram Holding USA Inc., Delaware, USA;

7. Green Hills Land holding LLC, South Carolina, USA;

8. Component Equipment Leasing LLC, South Carolina, USA;

9. Workspace Project LLC, South Carolina, USA; and

10. Premier Land Holding LLC, South Carolina, USA.

Associate

- Emerald Haven Realty Limited, Chennai. SUBSIDIARIES

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 OEMsâ 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. 2916 Cr. SACL earned a profit before tax of Rs.35 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 22nd 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 3rd 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, aggregates to Rs.6.50 (65%) paid to the Company for the year ended 31st 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 31st 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. Ltd

The Company 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 Holding USA Inc. (SHUI) and its subsidiaries

SACL has made an investment of 3.6 Mn USD in SHUI, a Company established under the applicable provisions of Laws of United States of America. SHUIâs 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 is expected to commence towards the end of 2018-19.

Financial position of all subsidiaries and associate company are provided as part of consolidated financial statements in Form AOC-1 in the manner required under Section 129 of the Act, 2013 read with the Companies (Accounts) Rules,2014.

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 / associate in the prescribed form. The audited consolidated financial statements together with Auditorsâ 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 the business hours.

The consolidated profit before tax of the Company and its subsidiaries & associate amounted to Rs.657.96.Cr for the financial year 2016-17 as compared to Rs.580.09 Cr in the previous year.

8. DIRECTORS & KEY MANAGERIAL PERSONNEL

Independent Directors (IDs)

At the 22nd AGM held on 14th July 2014, M/s T Kannan, R Ramakrishnan, C R Dua, Prince Asirvatham and Hemant Krishan Singh were appointed as IDs for the first term of five consecutive years from the conclusion of the 22nd AGM 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.

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 Companyâs shares, remuneration and expenses, insurance and indemnity. The IDs are provided with copies of the Companyâs 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 Companyâs website in the following link www.tvsmotor.com/pdf/Terms-of-Appointment-Independent-Directors.pdf.

Separate meeting of Independent Directors

During the year under review, a separate meeting of IDs was held on 17th 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 namely M/s. Venu Srinivasan, Chairman and Managing Director, Sudarshan Venu, Joint Managing Director, H Lakshmanan and Dr. Lakshmi Venu, 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 the risk management, internal controls and contribution to the Companyâs 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 boardâs 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, Marketing, Legal, Administration and International economy. 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, directorsâ selection process including succession planning and cohesiveness on key issues.

They were satisfied with the Companyâs 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-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.

Mr Sudarshan Venu, joint managing director, who is liable to retire by rotation, at the ensuing AGM, and being eligible, offers himself for re-appointment.

The nomination and remuneration committee and the board recommended his re-appointment. The brief resume has been furnished in the Notice convening the AGM of the Company. Appropriate resolution for his re-appointment is being placed for approval of the shareholders at the ensuing AGM.

Key Managerial Personnel (KMP)

Mr Venu Srinivasan, Chairman and Managing Director, Mr Sudarshan Venu, Joint Managing Director, Mr K N Radhakrishnan, Chief Executive Officer, Mr S G Murali, Chief Financial Officer and Mr K S Srinivasan, Company Secretary are KMP of the Company in terms of Section 2(51) and Section 203 of the Act, 2013. There is no change in KMP 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 shareholders of the Company. Nomination and Remuneration Policy was approved by the board at its meeting held on 23rd 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 Companyâs 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, at the 20th annual general meeting of the Company, held on 12th September 2012, 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 1st April 2013 to 31st March 2018.

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.

In view of the increased involvement and participation by such NE-IDs and having regard to their contribution and involvement in policy issues concerning the Companyâs operations, the board, on the recommendation of NRC, proposed to seek the authorization of the Shareholders, by way of a special resolution, in terms of Section 197 of the Act, 2013 to continue with payment of commission to NE-IDs from 1st April 2018.

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 Companyâs 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 directorsâ skills and talent 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;

- Stakeholdersâ 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 committeeâs terms of reference to ensure that the Companyâs 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 Auditor

The Company at its 22nd AGM held on 14th July 2014 appointed M/s V Sankar Aiyar & Co., Chartered Accountants, Mumbai, having Firm Registration No. 109208W allotted by The Institute of Chartered Accountants of India, as statutory auditors of the Company to hold office, for four consecutive years in the first term of five years, from the conclusion of the said AGM, subject to ratification at every AGM, at such remuneration in addition to reimbursement of all 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.

It is therefore proposed to re-appoint them as statutory auditors for the fifth consecutive year in the first term of five 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 from them conveying their eligibility for being statutory auditors of the Company for the year 2017-18.

The Auditorsâ Report for the financial year 2016-17 does not contain any qualifications, reservations and adverse remarks and the same is attached with the annual financial statements.

Secretarial Auditor

M/s S Krishnamurthy & Co., Company Secretaries, Chennai, was appointed as Secretarial Auditors 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 them 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 27th April 2017 has re-appointed M/s S Krishnamurthy & Co., Company Secretaries, Chennai 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 Cost Audit for the financial year 2017-18.

The Company has also received necessary certificate under Section 141 of the Act, 2013 from him conveying his eligibility. A sum of Rs.5 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 13th 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 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 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 SEBI (LODR) Regulations pertaining to CEO/CFO certification for the financial year ended 31st 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 VIII.

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 Companyâs 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 Companyâs Code of Conduct.

The policy is disclosed on the Companyâs website in the following link www.tvsmotor.com/pdf/Whistle-Blower-Policy.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 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

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 requirements of Section 134(3)(a) of the Act, 2013 read with the Companies (Accounts) Rules 2014.

Employeeâs 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 Companyâs performance is given as Annexure V to this report.

Details of material related party transactions

Details of material related party transactions under Section 188 of the Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, are given in Annexure VI to this report in the prescribed form.

Details of loans / guarantees / investments made

The details of loans and guarantees under Section 186 of the Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, for the financial year 2016-17 are given as Annexure VII to this report. On loans granted to the employees, the Company has charged interest as per its remuneration policy, in compliance with Section 186 of the Act, 2013.

Please refer note No. 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 holding Company i.e. Sundaram-Clayton Limited, Chennai. The directors 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 excellent 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.

For and on behalf of the Board

Bengaluru VENU SRINIVASAN

27th April 2017 Chairman

Mar 31, 2015

Dear Members,

The directors have pleasure in presenting the twenty-third annual report and the audited accounts for the year ended 31st March, 2015.

1. COMPANY PERFORMANCE

The Company achieved higher than the industry growth in 2014-15, registering sales of 24.1 lakh two wheelers, growing by 20.9% over last year. Sale of Motorcycles increased by 21% and scooters by 47.7%. Moped sales grew at a modest 3.6%. Three-wheeler sales of the Company increased by 35% in 2014-15. Sales of spare parts grew by 19.7%. This performance was achieved despite a challenging year characterized by slow economic activity, successive crop failures and severe competitive intensity.

TVS Jupiter, StaR City , Scooty Zest and Apache won several national and international awards clearly signaling a very strong customer acceptance and strong portfolio.

Total revenue of the Company including other income increased from Rs.7,996.15 Cr in the previous year to Rs.10,130.83 Cr in the current year. Profit before tax (PBT) for the year 2014-15 increased significantly to Rs.456.16 Cr from Rs. 352.54 Cr in the previous year. Similarly Profit After Tax increased from Rs.261.63 Cr achieved in the previous year after considering the exceptional items to Rs.347.83 Cr in 2014-15.

2. FINANCIAL HIGHLIGHTS

Year ended Year ended Details 31-03-2015 31-03-2014

SALES Quantitative (Numbers in lakhs)

Motorcycles 9.51 7.86

Mopeds 7.59 7.33

Scooters 7.00 4.74

Three Wheelers 1.08 0.80

Total vehicles sold 25.18 20.73

Financials (Rupees in crores)

Motorcycles 3815.09 3061.41

Mopeds 1553.20 1470.23

Scooters 2433.07 1609.77

Spares & Accessories and

Raw Materials 1095.27 947.34

Three Wheelers 1023.51 768.95

Other Operating Income 178.08 108.24

Other Income 32.61 30.21

Sales (Net of Excise duty) &

other income 10130.83 7996.15

(Rupees in crores)

EBITDA 668.91 536.04

Finance Charges & Interest (Gross) 27.42 25.40

Amortisation 32.00 23.64

Depreciation 153.33 131.65

Profit before tax before exceptional items 456.16 355.35

Exceptional items - (2.81)

Profit before tax after exceptional items 456.16 352.54

Provision for Tax 108.33 90.91

Profit for the year after tax 347.83 261.63

Balance in Statement of Profit and Loss 481.76 323.81

Profit available for appropriation 829.59 585.44

Appropriations:

Dividend and Dividend

Distribution Tax 107.51 77.52

Transfer to General Reserve - 26.16

Surplus carried forward 722.08 481.76

829.59 585.44

3. DIVIDEND

The board of directors of the Company (the board), at their meeting held on 3rd February, 2015, declared a 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. The same was paid to the shareholders on 13th February 2015.

The board at its meeting held on 29th April, 2015 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. The same will be paid to the shareholders on or after 9th May, 2015. Hence, the total amount of dividend including the second interim dividend payable, 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.

The board does not recommend any further dividend for the year under consideration.

5. 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 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, 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 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 CSR 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 recommendations 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, constituting more than 2% of average net profits, for the immediate past three financial years, towards CSR spending for the current financial year 2014-2015.

S.No. Name of the Trust Amount spent (Rs in Lakhs)

1 Srinivasan Services Trust 515.00

2 Sri Sathya Sai Loka Seva Trust 125.00

Total 640.00

Presently, SST is working in 2,501 villages spread across Tamil Nadu, Karnataka, Maharashtra, Himachal Pradesh and Andhra Pradesh. Its major focus areas are: Economic development, Health care, Quality education, Environment and Infrastructure.

Of the 2,501 villages, 1,573 villages (11,69,104 population and 2,51,234 families) have been funded by the Company over the years.

Achievements in 1,573 villages are:

Economic development:

- 1,44,800 families living in these villages have a monthly income of above Rs.15,000/-. They have financial security.

- 1244 farmers groups have been formed with 22,109 members.

- 1,01,834 farmers owning 1,17,089 hectares have increased the yields higher than the state average of the crops by 15%.

- 1,03,000 families earn more than Rs 3,500/- per month through livestock.

Women empowerment:

- Formed 5,091 Self Help Groups. These groups have 79,373 women as members.

- Of the 79,373 members, 71,774 members are in income generation activities. They earn a minimum additional income of Rs. 2500/- per month.

Health care:

- 23,009 children in the age group below 5 are not malnourished.

- 1,21,288 women are not anaemic any more.

- 75,749 additional households have access to toilet facilities (from 71,851 to 1,47,600)

- The morbidity percentage reduced from 17% to 5%.

- Enrolment in anganwadis increased from 86% to 100% and attendance is 99%.

- 691 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 747 schools, 503 schools are now model schools.

- 50,354 illiterate women out of 65,042 have been made literates.

Environment and Infrastructure:

- 1,39,280 households dispose solid waste through individual and common compost pits. 83 tons of vermi compost generated per month from wastes.

- Sewage water from 1,41,186 households disposed through soak pits, kitchen gardens and drain.

- Safe drinking water is available to 704 villages.

Community takes care of their development needs. 2,484 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 2014-15 are given by way of Annexure IV attached to this Report.

7. FINANCIAL PERFORMANCE & POSITION OF SUBSIDIARIES & ASSOCIATE COMPANIES

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

Subsidiaries

- Sundaram Auto Components Limited, Chennai;

- TVS Housing Limited, Chennai;

- PT. TVS Motor Company Indonesia, Jakarta;

- TVS Motor Company (Europe) B.V., Amsterdam;

- TVS Motor (Singapore) Pte. Limited, Singapore; and

- Sundaram Business Development Consulting (Shanghai) Company Limited, Shanghai.

Associates

- Emerald Haven Realty Limited, Chennai; and

- Green Infra Wind Energy Theni Limited, New Delhi.

Sundaram Auto Components Limited (SACL)

During the year, SACL, a wholly owned subsidiary of the Company, achieved a turnover of Rs.415 Cr in Plastics component business. SACL earned a profit after tax of Rs.25.32 Cr during the year 2014-15.

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)

During the year, TVSH has successfully completed phase 1 of the projects at its Nedungundram land at Chennai.

EHRL is the developer of the Nedungundram project of TVSH.

Construction of apartments have been completed and will be handed over to the buyers by June 2015. In Phase 2 of the Nedungundram project, villas are being developed and will be completed by June 2016.

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 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, the Company 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.

TVS Motor Company (Europe) B.V &

TVS Motor (Singapore) Pte. Ltd

The Company 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 TVS.

Considering the change in the evaluation, the Company 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, the Company 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 was initially established to explore options of sourcing, local assembly of two wheeler etc in China. After a complete review of the proposed activities through SBDC, it was advised that local manufacturing operations may not be required in China. Hence, the board has decided to retain the "Representative office" in China but to close down the operations of SBDC.

Green Infra Wind Energy Theni Ltd (GIWETL)

SACL had earlier invested Rs.3 Crores (30,00,000 shares of Rs.10 each) representing 21.58 % out of a total share capital of Rs.13.9 crores of GIWETL and in terms of the provisions of AS 18, GIWETL became an associate of the Company.

This investment by SACL was made purely to comply with the legal requirement to be eligible as captive consumer to draw low cost green energy units produced.

GIWETL has an installed capacity of 7.5 MW out of which 6 MW is committed to SACL. During the year under review, GIWETL reported a PBT of Rs.1.16 Cr and pro rata share of profit is considered for consolidation.

Financial position of all subsidiaries and associate companies are provided as an Annexure to consolidated financial statements.

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 under 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 them, 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 T Kannan, C R Dua, R Ramakrishnan, Prince Asirvatham and Hemant Krishan Singh, were appointed as IDs for the first term of five consecutive years from the conclusion of the twenty-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 14th July, 2014 at the annual general meeting as determined by the board from time to time.

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.tvsmotor.com/pdf/Terms-of-Appointment-Independent- Directors.pdf.

Separate meeting of Independent Directors:

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 25th March, 2015 and the IDs reviewed the performance of:

(i) non-IDs viz., M/s. Venu Srinivasan, Chairman and Managing Director Sudarshan Venu, Joint Managing Director, H Lakshmanan, and Dr Lakshmi Venu, 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 director on its board.

Dr Lakshmi Venu was appointed as additional, non-executive and non-independent director of the Company in terms of Section 161 read with Section 149 of the Act 2013, at the board meeting held on 10th September, 2014. She will vacate office in terms of Section 161 of the Act 2013 at the AGM and, being eligible, seeks herself for re-appointment at the ensuing AGM.

The board, based on the recommendation of nomination and remuneration committee, has recommended her appointment as non-executive and non independent director, liable to retire by rotation, in accordance with the articles of association of the Company (AoA), at the AGM, for approval by the shareholders.

A notice has been received from the holding company viz., Sundaram-Clayton Limited, as per the provisions of Section 160 of the Act 2013, along with a requisite deposit amount signifying its intention to propose the candidature of Dr Lakshmi Venu for appointment as director at the AGM.

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 Sudarshan Venu, JMD, who is liable to retire by rotation, at the AGM, and being eligible, offers himself for re-appointment.

Executive directors

Joint Managing Director (JMD)

During the year, the board, at its meeting held on 10th September, 2014, based on the recommendation of the NRC, appointed Mr Sudarshan Venu, who 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 - as JMD from the position of the whole-time director, subject to the approval of the shareholders at the AGM.

The other terms and conditions of his appointment and remuneration, as earlier approved by the board as well as by the shareholders of the Company on 18th March, 2013 through postal ballot and on 14th July, 2014 at the twenty- second annual general meeting of the Company, would remain unchanged.

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 holding company, namely Sundaram-Clayton Limited (SCL) 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.

Chairman and Managing Director (CMD)

During the year, the board, at its meeting held on 3rd February, 2015 re-appointed Mr Venu Srinivasan as chairman and managing director of the Company (CMD), effective 24th April 2015 to hold the office for a period of five years on such terms and conditions, subject to the approval of the shareholders at the AGM.

Mr Venu Srinivasan was conferred an Honorary Doctorate of Management degree by Purdue University, USA in May 2014. The honour was conferred on him in recognition of his contributions in the field of management.

Further, in December 2014, Mayor of Busan Metropolitan City, Republic of Korea, His Excellency Suh Byung-soo conferred on him the Honorary Consul General of the Republic of Korea in Chennai. This award is one of the highest of its kind being awarded to a foreign national by the Korean. He is also the first Indian industrialist to be granted this honorary citizenship, in recognition of his valuable contribution in promoting Korea-India bilateral relations.

The board, based on the recommendation of NRC, has appointed and recommended his reappointment and the terms of remuneration as CMD, in accordance with the articles of association of the Company (AoA), at the AGM. Mr Venu Srinivasan as CMD of both the holding company namely Sundaram-Clayton Limited (SCL) 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.

The brief resume of the directors proposed to be appointed and reappointed and other relevant information have been furnished in the Notice convening the annual general meeting of the Company. 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 meeting held on 29th April, 2014, Mr Venu Srinivasan, CMD, Mr Sudarshan Venu, now JMD, Mr K N Radhakrishnan, President & Chief Executive Officer, Mr S G Murali Chief Financial Officer and Mr K S Srinivasan Company Secretary were designated as ''Key Managerial Personnel'' of the Company in terms 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 23rd 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.

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.

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.We endeavour 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 at its twenty second AGM held on 14th July 2014 appointed M/s V Sankar Aiyar & Co., Chartered Accountants, Mumbai, having Firm Registration No. 109208W allotted by The Institute of Chartered Accountants of India, as statutory auditors of the Company to hold office, for four consecutive years from the conclusion of the said AGM, subject to ratification at every AGM. The Auditors'' Report for the financial year 2014-15 does not contain any qualification, reservation or adverse remark and the same is attached with the annual report.

The Company has obtained necessary certificate under Section 141 of the Act 2013 from them conveying their eligibility for being statutory auditors of the Company for the year 2015-16.

Cost Auditors

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.5 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, M/s S Krishnamurthy & Co., Company Secretaries, Chennai, was appointed as Secretarial Auditors for carrying out the secretarial audit for the financial year 2015-16.

As required by Section 204 of the Act, 2013, the Secretarial Audit Report for the year 2014-15, given by M/s S Krishnamurthy & Co., Company Secretaries, 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 chairman and managing director and the executive vice president - finance 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 23rd 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.tvsmotor.com/pdf/Whistle-Blower- Policy.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.

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 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

Details of material related party transactions under Section 188 of the Act 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, are given in Annexure VI to this report in the prescribed form.

Details of loans / guarantees / investments made

The details of loans and guarantees under Section 186 of the Act 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, for the financial year 2014-2015 are given as Annexure VII to this report. On loans granted to the employees, the Company has charged interest as per its remuneration policy, in compliance with 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 holding company i.e. Sundaram-Clayton Limited, Chennai. The directors 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.

For and on behalf of the Board Bengaluru VENU SRINIVASAN 29th April 2015 Chairman

Mar 31, 2013

To the Shareholders

The directors have pleasure in presenting the twenty first annual report and the audited accounts for the year ended 31st March 2013.

1. FINANCIAL HIGHLIGHTS

Year ended Year ended

Details 31-03-2013 31-03-2012

SALES:

Quantitative (Numbers in lakhs)

Motorcycles 7.56 8.44

Mopeds 7.93 7.78

Scooters 4.46 5.25

Three wheelers 0.49 0.40

Total vehicles sold 20.44 21.87

Financial (Rupees in crores)

Motorcycles 2794.98 2901.15

Mopeds 1547.07 1461.43

Scooters 1441.54 1625.82

Spares & Accessories 741.70 696.64

Three Wheelers 440.11 324.25

Other Operating Income 99.60 132.23

Other Income 23.84 21.71

Sales (Net of Excise duty & other income) 7088.84 7163.23

EBITDA 460.62 519.86

Finance charges & Interest (Gross) 48.04 57.09

Amortisation 27.75 28.78

Depreciation 130.41 117.53

Profit before tax and exceptional item 254.42 316.46

Exceptional item (91.63)

Profit before tax after exceptional item 162.79 316.46

Extraordinary items 0.79

Profit before tax after extraordinary item 163.58 316.46

Provision for tax 47.56 67.39

Profit for the year after tax 116.02 249.07

2. DIVIDEND

The board of directors of the Company at its meeting held on 1st February 2013, declared a first interim dividend of Re.0.60 per share (60%) for the year 2012-13 absorbing a sum of Rs. 32.85 Cr including dividend distribution tax. The same was paid to the shareholders on 12th February 2013.

The board of directors of the Company at its meeting held on 30th April 2013 declared a second interim dividend of Re. 0.60 per share (60%) for the year 2012-13 absorbing a sum of Rs. 32.66 Cr including dividend distribution tax. The same will be paid to the shareholders on or after 10th 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.1.20 per share (120%) on 47,50,87,114 equity shares of Re.1/- each.

The board of directors of the Company do not recommend any further dividend for the year under consideration.

3. SUBSIDIARY COMPANIES

As on the date of this report, the following are the subsidiaries of the Company

Name of the Company Subsidiary of

Sundaram Auto Components Limited TVS Energy Limited

TVS Housing Limited TVS Motor Company Limited

TVS Motor Company (Europe) B.V. TVS Motor (Singapore) Re. Limited Sundaram Business Development Consulting (Shanghai) Company Limited

PT. TVS Motor Company Indonesia TVS Motor (Singapore) Re. Limited

TVS Wind Power Limited _,Â,_ ,. UJ

TVS Energy Limited TVS Wind Energy Limited

4. PERFORMANCE OF SUBSIDIARIES

PT.TVS Motor Company Indonesia (PT TVS)

During the year under review, PT TVS''s sales, was lower at 19,000 nos. compared to 23,000 nos. sold during 2011-12, consequent to steep fall in the sales of Bebek category in Indonesia, where its current products are focused. However, improved margin resulted in lower EBITDA loss at Rs.37.53 Cr, compared to EBITDA loss of Rs.49 Cr of 2011-12.

During the year, PT TVS sold its surplus land of 200,000 sq.meters bought in 2008 for a sale consideration of USD 23.4 million, generating a profit of USD 16.9 million. Consequently, PBT for the year was Rs.7.57 Cr compared to loss of Rs.87.72 Cr in 2011-12. The sale of surplus land does not affect the manufacturing facilities of PT TVS.

The Motorcycle industry in Indonesia declined by 10%, during the year, mainly due to the introduction of new regulations on the down payment for consumer financing. The total two wheelers sold during 2012-13 was 7.2 mn. The category share of bebek, which was dominant for five years, came down from 39% to 27% during 2012-13.

The scooter (skubek) category grew by 5% and its category share went up from 53% to 61%. The sports motorcycle category, witnessed a significant growth of 28%, with the category share moving to 12%, indicating the new preference of Indonesian customers.

During the year, PT TVS successfully launched a new style Apache 160 cc and 180 cc, which were received well by the customers. PT TVS grew by 15% in this category over the last year. It is planning to launch a new skubek and a new motorcycle during 2013-14. Both these products are expected to perform well and increase the sales during 2013-14.

Presently, PT TVS has around 100 dealers and has plans to expand the network to 150 dealers by the end of March 2014. PT TVS also plans to tie-up with multi-finance companies, to leverage retail finance and grow the sales during 2013-14.

TVS Motor Company (Europe) B.V (TVSM Europe)

It has been proposed by the board of directors of TVSM Europe to close down the investment outfit considering the general down turn in the business environment in Europe and across other parts of the world. It has also been proposed, as part of their closing down the activities, distribution of assets and liabilities to the Company''s another overseas subsidiary, namely TVS Motor (Singapore) Pte. Limited, in the manner they now appear in their books of accounts.

By way of a provision for diminution in the value of investment viz. to the tune of Rs.91.63 Cr. representing the investment in the share capital of PT TVS Motor Company, Indonesia by TVSM Europe impairment has also been provided for in the books of the Company in the current financial year.

Way back in March 2011, TVSM Europe has taken this investment value at nil in their books.

Sundaram Auto Components Limited (SACL)

During the year, SACL achieved a turnover of Rs.298 Cr in Rubber and Plastics component business. SACL earned a profit after tax of Rs. 13.62 Cr during the year 2012-13 including the profit from sale of rubber business.

Focused improvement in material productivity resulted in 10% improvement in contribution compared to previous year even with increase in energy cost. During the year, the Company has also productionised 107 new parts for various customers. The current product profile of Rubber component business is limited. Therefore, the board of directors of SACL, after obtaining the approval of its shareholders, divested the Rubber Component business at a value of Rs.21 Cr. This will help SACL to focus and expand the Plastic business.

SACL was awarded "Best Supplier award for delivery" by the Company for the year 2012-13.

SACL declared an interim dividend of Rs.2.50 per share (25%) for the year ended 31st March 2013.

TVS Energy Limited (TVS Energy)

During the year, TVS Energy commissioned the remaining 15 turbines of the 25.5 MW project in Maharashtra and executed Energy Purchase Agreement with the state utility Maharashtra State Electricity Distribution Company Limited for sale of energy from this project.

It had also successfully registered all the wind energy projects with UNFCCC under Clean Development Mechanism (CDM) for Carbon credits.

TVS Energy, in order to tide over the power evacuation issues faced during 2011 high wind season by the turbines in Tamil Nadu, identified improvement actions based on study of the grid infrastructure and pursued implementation of improvement actions with the state utility to minimize back down of generation. Consequently, the grid availability for the turbines improved significantly during 2012-13 and this resulted in a substantial increase in energy generation by the turbines during the year under review.

The revenue earned by TVS Energy for the year is Rs.43.62 Cr and EBITDA is Rs.39.68 Cr. After providing for interest of Rs.21.89 Cr and depreciation of Rs.12.89 Cr, the PBT is Rs.4.90 Cr for the year 2012-13, compared to loss of Rs.6.87 Cr for the year 2011-12. The PAT for the year 2012-13 is Rs.4.50 Cr compared to loss of Rs.7.34 Cr for the year 2011-12.

Investment in subsidiaries:

During the year under review, the Company has made additional investment of Rs.0.61 Cr equivalent to USD 110,000 in equity capital of Sundaram Business Development Consulting (Shanghai) Company Limited.

5. 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-lll dated: 8th February 2011 has granted general exemption from attaching annual reports of subsidiaries along with the annual report of the holding companies without seeking any approval of the Central Government, subject to the conditions laid down therein.

The board of directors at its meeting held on 30th April 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 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. If any member or investor wishes to inspect the same, it will be available at the registered office of the Company 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 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.

6. DIRECTORS

Mr Hemant Krishan Singh who was appointed as an additional director effective 1st February 2013 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 Non executive and Independent director of the Company.

Mr Sudarshan Venu who was appointed as an additional director effective 1st February 2013 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.

Mr Sudarshan Venu was also appointed in the rank of whole time director for a period of five years effective 1st February 2013 and the terms and conditions of appointment and remuneration payable to him were approved by the shareholders by way of special resolution through Postal Ballot on 18,h March 2013.

Notices in terms of Section 257 of the Companies Act, 1956 have been received from the members of the Company signifying their proposals for the appointment of Mr Hemant Krishan Singh and Mr Sudarshan Venu as directors, at the ensuing annual general meeting.

In terms of the Articles of Association of the Company, Mr H Lakshmanan, and Mr R Ramakrishnan, directors of the Company, are liable to retire by rotation at the ensuing annual general meeting of the Company, 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 / appointment are being placed for approval of the shareholders at the ensuing annual general meeting. The directors recommend their appointment / re-appointment as directors of the Company.

7. AUDITORS

M/s Sundaram & Srinivasan, Chartered Accountants, Chennai were re-appointed as statutory auditors at the last annual general meeting held on 12th September 2012 to hold office till the conclusion of the ensuing annual general meeting.

M/s Sundaram & Srinivasan, Chartered Accountants, Chennai have informed that they do not wish to be re-appointed as the statutory auditors of the Company at the ensuing Annual General Meeting.

In view of this, the board of directors have recommended the appointment of M/s V Sankar Aiyar & Co., Chartered Accountants, Mumbai as the statutory auditors of the Company, subject to the approval of the shareholders at the ensuing Annual General Meeting. The Company has received consent from M/s V Sankar Aiyar & Co., Chartered Accountants, Mumbai to serve as statutory auditors of the Company, if they are so appointed.

They have also furnished necessary certificate u/s 224(1 B) of the Companies Act, 1956 conveying their eligibility in terms of the number of company audits.

Directors place on record their sincere appreciation of the valuable services rendered by M/s Sundaram & Srinivasan, Chartered Accountants, Chennai since inception of the Company as statutory auditors of the Company.

8. COST AUDITOR

As per the Companies (Cost Accounting Records) Rules 2011, the Company filed the Cost Audit Report along with Cost Compliance Report for the financial year 2011-12 in XBRL format.

The board of directors, subject to the approval of the Central Government, re-appointed Mr A N Raman, Cost Accountant, holding certificate of practice No.5359, as a Cost Auditor for conducting the Cost Audit for the financial year 2013-14. Subject to the compliance with all the requirements as stipulated in circular no.15/2011 dated 11th April 2011 and No. 36/2012 dated 6th November 2012 issued by the MCA, the audit committee of directors recommended his re-appointment.

The Company has also received a letter from the Cost Auditor, stating that the appointment, if made, will be within the limits prescribed under Section 224(1 B) of the Companies Act, 1956.

9. 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 with the 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 chairman and managing director and the executive vice president - finance of the Company have certified to the board on the 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 2013.

10. 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 (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 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 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 2013 on a "going concern basis".

ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co-operation received from the holding Company i.e. Sundaram-Clayton Limited, Chennai. The directors 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.

For and on behalf of the Board

Bengaluru VENU SRINIVASAN

30th April 2013 Chairman

Mar 31, 2012

The directors have pleasure in presenting the twentieth annual report and the audited accounts for the year ended 31st March 2012.

1. FINANCIAL HIGHLIGHTS

Year ended Year ended Details 31-03-2012 31-03-2011

QUANTITATIVE (Numbers in lakhs)

Sales:

Motorcycles 8.44 8.33

Mopeds 7.78 7.05

Scooters 5.25 4.66

Three wheelers 0.40 0.39

Total vehicles sold 21.87 20.43

FINANCIAL (Rupees in crores)

Motorcycles 2895.79 2748.88

Mopeds 1458.74 1235.34

Scooters 1622.82 1340.69

Spares and accessories 692.97 539.17

Three wheelers 323.65 314.35

Other operating income 132.23 109.59

Other income 21.71 35.62

Sales (Net of Excise duty) and Other income 7147.91 6323.64

EBITDA 519.86 491.34

Finance costs 57.09 72.33

Amortisation 28.78 63.67

Depreciation 117.53 107.25

Profit before tax 316.46 248.09

Provision for tax 67.39 53.51

Profit for the year after tax 249.07 194.58

2. DIVIDEND

The board of directors of the Company at their meeting held on 14th March 2012, declared an interim dividend of Re.0.60 per share (60%) for the year 2011-12 absorbing a sum of Rs.33.13 Cr including dividend distribution tax. The same was paid to the shareholders on 26th March 2012.

The board of directors of the Company at their meeting held on 24th May 2012 declared a second interim dividend of Re.0.70 per share (70%) for the year 2011-12 absorbing a sum of Rs.38.65 Cr including dividend distribution tax. The same will be paid to the shareholders on or after 12th June 2012. Hence, the total amount of dividend including the second interim dividend payable, for the year ended 31st March 2012 will aggregate to Rs.1.30/- per share (130%) on 47,50,87,114 equity shares of Re.1/- each.

The board of directors of the Company do not recommend any further dividend for the year under consideration.

4. SUBSIDIARY COMPANIES

As on date of this report, the following are the subsidiaries of the Company

Name of the Company Subsidiary of

Sundaram Auto Components Limited (SACL)

TVS Energy Limited (TVS Energy)

TVS Housing Limited TVS Motor Company Limited

TVS Motor Company (Europe) B.V.

TVS Motor (Singapore) Pte. Limited

Sundaram Business Development

Consulting (Shanghai) Company Limited

PT. TVS Motor Company Indonesia TVS Motor (Singapore) Pte. Limited

TVS Wind Power Limited

TVS Wind Energy Limited TVS Energy Limited

Sundaram Engineering Products Services 51% of share capital held by Limited SACL and TVS Energy

During the year under review, the Company has established a wholly foreign owned enterprise (WFOE) in China under the name of Sundaram Business Development Consulting (Shanghai) Co. Ltd, Shanghai, China. The body corporate was registered in Shanghai province of China on 2nd September 2011 and the Company invested a sum of Rs.0.20 Cr in the equity capital and thereby it became a subsidiary of the Company on that date.

The WFOE closed its accounts for the first year, for a short period from 2nd September 2011 to 31st December 2011.

On 23rd January 2012, Sundaram Auto Components Limited, the wholly owned subsidiary and TVS Energy Limited, subsidiary company invested in the equity capital of Sundaram Engineering Products Services Limited (SEPSL), an unlisted public company, incorporated on 1st December 2011 with the main object of rendering consultancy services for catering to the needs of the group companies and is yet to commence its activities. SEPSL has also become a subsidiary of the Company by virtue of the provisions of Section 4(1)(c) of the Companies Act, 1956, in view of the investment made by the subsidiaries of the Company.

5. PERFORMANCE OF SUBSIDIARIES

PT.TVS Motor Company Indonesia (PT TVS)

PT.TVS Motor Company Indonesia (PT TVS) ended the financial year 2011-12, with a sales of 23,000 vehicles which is a 16% growth from the previous year. Turnover of the Company increased from Rs. 85.36 Cr in 2010-11 to Rs. 107.36 Cr in 2011-12. Operating loss at EBITDA level was lower at Rs. 49 Cr during the current year compared to loss at EBITDA level (excluding amortisation of Foreign

Currency Monetary Translation Reserve) was Rs. 58.4 Cr of previous year.

The Indonesian motorcycle industry has been growing at 15% in the last 5 years and is expected to grow at 10% to 12% over the next five years. However, there has been a significant shift in the form of vehicles sold. The popular Bebeks category which constituted close to 80% of the market 5 years back has now come down to 40% on the back of strong growth from the scooters (skubeck) category. The scooters offer greater convenience and imagery over the Bebeks and hence are a preferred choice. The category share of Sports model, however, remains stable at 8%.

PT TVS has 3 brands in the Bebek category and one brand in the Sports category and is still unrepresented in the Scooters category. All the product brands have been well received by the customers.

PT TVS has just completed the launch of 2012 model of Neo in February 2012. This was followed by the launch of new TVS RockZ in May 2012. All new TVS Apache in 3 models viz., 160cc, 180cc and 180cc ABS (first in the category) will also be launched during the year 2012-13.

The company has decided to focus on 6 identified provinces and increase its share in these markets through focused expansion and improving the productivity of existing dealers. The present strength of around 110 dealers will be increased to 240 by end of next year.

Retail finance, being the most important enabler to sales has been given high priority. The Company has tied up with 3 national and several regional financing companies that will provide retail financing.

The company had, in the last year, exported 10,000 units to countries like Iran, Philippines and West Africa. PT TVS plans to expand its presence in new markets like Laos, Columbia, Argentina, Peru, Guatemala, Nigeria, Brazil and Vietnam.

Sundaram Auto Components Limited (SACL)

During the year, SACL achieved a growth of 10% in the sale of Rubber and Plastics component business. SACL earned a profit after tax of Rs 5.13 Cr during the year 2011-12 as against Rs.8.22 Cr in the previous year.

Due to abnormal increase in the price of polymers and increase in fixed costs, the profitability of SACL was affected and resulted in lower contribution and consequently lower profits during 2011-12.

SACL has added injection moulding machines with annual capacity of 680 tons of plastics at its plant located at Mysore to support its customers. During the year, SACL has also productionised 92 new parts for various customers.

SACL was awarded "National Best Partner for Business Development" by Hyundai Mobis for the third consecutive year in recognition of outstanding performance and achievement in India during the year.

SACL declared and paid an interim dividend of Rs 1.50 per share (15%) for the year ended 31st March 2012.

TVS Energy Limited (TVS Energy)

During the year, power generation by TVS Energy's wind turbines had to be backed down under instruction of the state transmission utility, viz., Tamil Nadu Transmission Corporation Limited (TANTRANSCO) during the peak wind season due to overloading and high frequency of the grid. Consequently, the energy generation from four wind energy projects with a capacity of 34.25 MW located in Tamilnadu was severely affected. The revenue earned by TVS Energy for the year was Rs.16.64 Cr and EBITDA was Rs. 13.34 Cr. However after providing for interest of Rs. 13.06 Cr and depreciation of Rs. 7.15 Cr, the net loss from operations is Rs. 6.87 Cr. TVS Energy expects the grid availability to improve during the current year.

During the year, TVS Energy planned to set up a 25.5 MW capacity wind energy project in Maharashtra. The power generated by this project is proposed to be sold to power distribution utility in Maharashtra. Two turbines (3 MW) were commissioned during the year and the remaining fifteen turbines (22.5 MW) are expected to be commissioned during the current financial year 2012-2013.

Investment in subsidiaries:

During the year under review, the Company made additional investments in its subsidiaries:

- USD 18 Million in non cumulative, non convertible and redeemable shares (Class B) of PT TVS.

- Rs 24.90 Cr in the equity capital of SACL.

- Rs 25.00 Cr in the equity capital of TVS Energy.

- Euro 5450000 in the equity capital of TVS Motor Company (Europe) B.V.

- USD 40000 in equity capital of Sundaram Business Development Consulting (Shanghai) Company Limited.

6. CONSOLIDATED FINANCIAL STATEMENTS

As required under the Listing Agreement with the Stock Exchanges, the consolidated financial statements of the Company have been prepared in compliance with the applicable Accounting Standards and are attached.

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

The board of directors at their meeting held on 11th April 2012 passed necessary resolution for complying with all the conditions enabling the circulation of annual report of the Company without attaching all the documents referred to in Section 212(1) of the Act, of the subsidiary companies to the shareholders of the Company.

The annual accounts, reports and other documents of the subsidiary companies will be made available to the members, on receipt of a request 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 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, Mr T Kannan and Mr Prince Asirvatham, directors of the Company, are liable to retire by rotation at the ensuing annual general meeting of the Company, 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.

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 received a letter from them, stating that the appointment, if made, will be within the prescribed limit under Section 224(1B) of the Act.

9. COST AUDITOR

The Company filed the Cost Audit Report in terms of Cost Accounting Records (Motor Vehicles) Rules, 1997 for the financial year 2010-2011 on 19th September 2011 which was due to be filed with the MCA on or before 30th September 2011.

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 Companies Act, 1956.

The board of directors, subject to the approval of the Central Government, appointed Mr A N Raman, a Cost Accountant holding certificate of practice No.5359, as a Cost Auditor for conducting the Cost Audit for the financial year 2012-2013. The audit committee of directors recommended his appointment subject to the compliance of all the requirements as stipulated in circular no.15/2011 dated 11th April 2011 issued by the MCA. The Central Government has also accorded its approval for the appointment.

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 this Annual Report.

The chairman and managing director and the executive vice president - finance 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 2012.

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, during the year ended 31st March 2012.

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 2012, the applicable Accounting Standards had been followed and that there are 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 2012 on a "going concern basis."

ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co-operation received from the holding company i.e., Sundaram-Clayton Limited, Chennai. The directors 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.

For and on behalf of the Board

Bengaluru VENU SRINIVASAN

May 24, 2012 Chairman

Mar 31, 2011

Directors' report to the Shareholders

The directors have pleasure in presenting the nineteenth annual report and the audited accounts for the year ended 31st March 2011.

1. FINANCIAL HIGHLIGHTS

Details Year ended Year ended

31-03-2011 31-03-2010

QUANTITATIVE (Numbers in lakhs)

Sales:

Motorcycles 8.33 6.38

Mopeds 7.05 5.71

Scooters 4.66 3.10

Three wheelers 0.39 0.15

Total vehicles sold 20.43 15.34

FINANCIAL (Rupees in crores)

Motorcycles 2,748.88 2,046.23

Mopeds 1,235.34 952.48

Scooters 1,340.69 822.03

Spares and accessories 540.22 421.84

Three wheelers 314.35 120.53

Other income 119.18 121.57

Sales (net of excise duty) and other income 6,298.66 4,484.68

EBITDA 466.00 303.62

Interest and finance charges (net) 46.99 63.17

Amortisation 63.67 61.75

Depreciation 107.25 102.53

Profit before tax 248.09 76.17

Provision for tax (including deferred tax and fringe benefit tax) 53.51 (11.84)

Profit for the year (after tax) 194.58 88.01

Surplus brought forward 34.12 33.02

Profit available for appropriation 228.70 121.03

APPROPRIATIONS

First Interim dividend 23.76 16.63

Second Interim dividend payable 28.51 11.88

Tax on dividend paid 3.95 2.83

Provision for dividend tax 4.26 1.53

Transfer to general reserve 32.75 54.04

Surplus carried forward 135.47 34.12

2. DIVIDEND

The board of directors of the Company at their meeting held on 20th January 2011, declared first interim dividend of Re.0.50 per share (50%) for the year 2010-11 absorbing a sum of Rs.27.71 Cr including dividend distribution tax. The same was paid to the shareholders on 1st February 2011.

The board of directors of the Company at their meeting held on 29th July 2011 declared a second interim dividend of Re.0.60 per share (60%) for the year 2010-11 absorbing a sum of Rs.32.77 Cr including dividend distribution tax. Hence, the total amount of dividend including the second interim dividend payable, for the year ended 31st March 2011 will aggregate to Rs.1.10 per share (110%) on 47,50,87,114 Equity shares of Re.1/- each.

The board of directors of the Company do not recommend any further dividend for the year under consideration.

3. PERFORMANCE

During the year under review, the Company for the first time achieved annual two wheeler sales of two million, a growth of 32% from 1.52 mn units sold in the previous year, driven by growth across all segments of two wheelers. The sales of three wheelers significantly increased from 14,702 Nos. in 2009-10 to 39,257 Nos. in 2010-11.

During the year, the Company strengthened its portfolio of two wheelers by launching Apache RTR 180 equipped with Anti-lock Brake System (ABS) and Max 4R motor cycle.

The Company's total revenue including other income grew from Rs.4,484.68 Cr in the previous year to Rs.6,298.66 Cr in the current year. The profit before tax (PBT) of Rs. 248.09 Cr for the year was higher by 226% than the previous year's PBT of Rs.76.17 Cr. The profit after tax (PAT) of Rs.194.58 Cr for the year was higher by 121% than the previous year's PAT of Rs.88.01 Cr.

The Company expects to grow further in the two wheeler segment, with additional sales coming from the new products launched during the year and the exports of three wheelers. The Company is well positioned to improve business performance during the year 2011-12.

4. BONUS SHARES

During the year, the Company issued and allotted 23,75,43,557 equity shares of Re.1/- each as bonus equity shares on 10th September 2010 in the ratio of 1:1 to the eligible shareholders of the Company as on the record date, i.e, 9th September 2010 by capitalizing an equivalent amount standing to the credit of the general reserve account of the Company as approved by the shareholders through postal ballot on 30th August 2010.

As a result, the Company's paid up equity share capital now stands at Rs. 47.51 Cr. The said issue, allotment and listing of bonus equity shares were 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.

5. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Two wheeler industry continued its impressive growth during 2010-11. The industry registered a growth of 27% with all segments recording an impressive growth.

The Company recorded an overall growth of 32% in two wheeler sales. This was driven by an impressive 50% growth in scooter segment, 23% growth in moped segment and 31% growth in the motorcycle segment. Launch of Apache RTR180 ABS has reinforced the Company's position in the Premium segment of the motorcycle market. TVS Wego in the big scooter segment has contributed considerably to the sales and the scooter segment was further strengthened with the launch of Scooty Babelicious series. The Company launched the Max 4R series to serve the load carrying need of the customers. The Company launched TVS Jive in the Executive segment, which forms 60% of the motorcycle category. During the year, the three wheeler sales have increased from 14,702 nos. in 2009-10 to 39,257 nos. in 2010-11. Sales of spare parts grew by 28%.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The overall two wheeler sales increased by 27% from 10.5 mn numbers in 2009-10 to 13.32 mn numbers in 2010-11. This growth was mainly propelled by a 24% growth in motorcycles from 8.4 mn numbers to 10.5 mn numbers. Scooters grew by an impressive 42% from 1.5 mn numbers to 2.1 mn numbers. Mopeds registered a growth of 23% from 0.57 mn numbers to 0.70 mn numbers. Exports of two wheeler have grown by 34%. The Petrol Passenger three wheeler industry (3 plus 1 segment) grew by 36% during 2010-11 to reach 4 lakh units. Domestic market grew by 21% to reach (1.6 lakh numbers) and Export market grew by 48% (2.5 lakh numbers).

In motorcycle category, the Executive segment grew by 26% and the Premium segment by 38%. Absence of adequate retail finance in all areas continued to affect the Economy segment and it grew only by 12%.

Industry sales of two wheelers (Domestic plus Export)

2009-10 2010-11 Particulars Sales Growth Category Sales Growth Category in mn in % share in mn in % share (nos.) (nos.)

Motorcycles 8.44 24 80% 10.50 24 79%

Un-Geared scooters 1.49 28 14% 2.12 42 16%

Mopeds 0.57 27 6% 0.70 23 5%

Total two wheelers 10.50 25 100% 13.32 27 100%

BUSINESS OUTLOOK AND OVERVIEW

Tight liquidity, high interest cost and inflation are likely to result in lower GDP growth for the country during 2011-12 compared to previous year. The two wheeler industry is also consequently expected to grow at a lower rate of 12% to 14% compared to 27% growth recorded in the previous year. Commodity cost which showed a mild upward bias in the first half may come down in the second half of the year.

COMPANY PERFORMANCE

New Product Launches and Initiatives

During the year 2010-11, the following new products and variants were launched.

TVS Apache RTR 180 first Indian Motorcycle with ABS, is a technical showcase of the RTR Series. Inspired from the track, the RTR Series is a class definer when it comes to performance. The Racing DNA is further personified with the highest in class power to weight ratio and Racing Ergonomics, which render agility and superb handling to the RTR Series.

Inspired by the new generation of young India, the Company launched the Scooty Pep babelicious series with five stunning colours. Along with fresh graphics, this collection is meant for young women. Scooty is known to be a pioneer with successful fashion editions and colour innovations launched in the past. Leading the fashion trend with the babelicious series along with benefits of ease and lightweight, Scooty is further likely to consolidate its position as the most preferred scooter for young women.

Sensing the imminent need of a sturdy and durable motorcycle the Company launched TVS Max4R during the year. The noticeable differentiator is the four shock absorbers that are fitted at the rear end of the motorcycle, so that the bike can easily carry heavy loads.

Two wheeler operations: Domestic:

The Company registered higher growth rates than the market across the segments. While motorcycle segment grew by 23%, TVS grew by 29%.

TVS grew by 50% in the scooter segment. Entry of Wego has further strengthened TVS scooter portfolio. Mopeds grew by 23% with growth coming from both southern and non southern markets.

The Company's products are distributed by network of dealers and authorised service centers across India. The Company will continuously seek to increase distribution reach.

Exports:

TVS crossed a new milestone in exports with all time high sales of 2.23 lakh numbers. The growth of 37% over last year is driven by improved sales in South Asian market, Africa, Brazil and foray into Mexico.

Three wheeler operations:

The Company has cumulatively sold over 58,700 vehicles till March 2011 in India and in international markets since launch.

During the year 2010-11, TVS Motor launched a new customer service initiative "TVS Service Anytime Anywhere (24x7)" in three major cities, which is first of its kind in the industry.

The Company has exported three wheelers to 18 countries. Export of three wheelers provides an excellent opportunity in the current year.

Opportunities and Threats:

Growth in two wheeler demand will come mainly from rising population in target age and income groups. Increased use of personal transport would also be a significant demand driver. Smaller towns are expected to contribute more to the industry growth. TVS StaR City and TVS Sport motorcycles stand to gain from this. Customer acceptance and high customer satisfaction of TVS Jive are expected to result in higher sales. Buoyant rural economy is expected to drive the demand for MAX 4R.

Apache RTR 180 ABS has further strengthened the Company's position in the Premium segment.

The Company has a strong presence in the sub 100cc ungeared scooter segment. The launch of TVS Wego in the large scooter segment further increases the Company's growth prospects in the scooter category.

The rising interest cost, tight liquidity and high inflation may however impact the growth prospect during 2011-12.

OPERATIONS REVIEW

Quality:

The Company has significantly improved the quality of all its existing and new products. Steps have also been taken to improve the quality of after-sales service. The combination of these measures has enabled the Company to achieve best in class customer satisfaction.

Total Quality Management (TQM):

The Company has adopted the philosophies of TQM as the cornerstone of its management. In an attempt to standardize, strengthen and deepen the understanding, the Company has formalized and documented these philosophies titled as "TVS Way". The Company has continued to benefit from 100% participation of employees in TQM activities, for the fifth year in succession. The employees have completed and presented more than 1,600 projects through QC Circles and Cross Functional Teams for the year 2010-11 towards achieving Company's objectives.

During 2010-11, the Company received and implemented on an average 47 suggestions per employee. The Company has won the first prize for "Excellence in Suggestion Scheme" from INSSAN (Indian National Suggestion Scheme Association) for the eighth consecutive year.

Cost management:

The Company continues its rigorous focus on its costs through an effective deployment system. Value engineering and aggressive global sourcing projects are being pursued to reduce material costs and also to partially neutralize input material cost increases.

Research and Development (R&D):

The Company's strong R&D team is supported by modern computer aided laboratory, capable of developing new and innovative products. It has state-of-art facilities for engine testing, noise, vibration and harshness (NVH) measurements and life testing. At present, more than 600 engineers are working on development of new products and in other advanced areas of technology. The Company works with leading technological research laboratories and institutions. The Company is also working on development of fuel-efficient technologies and CO2 reduction technologies to remain ahead of needs of consumers and environment regulations.

R&D has developed and launched a new 110cc 4 stroke ungeared scooter with disc brake system for export market. R&D has developed and launched a new 150cc 4 stroke liquid cooled engine for Indonesian Market. R&D has also developed and launched a 180cc 4 stroke motorcycle with ABS technology.

R&D team has so far published 72 technical papers in national and international conferences.

Information technology:

The Company has been using enterprise wide system to integrate all the business processes within the Company as well as integrating suppliers' and dealers' business processes. Several projects have been implemented during the year to improve productivity and quality. The Company also uses Product Lifecycle Management to reduce the new product development lead time, control cost and improve quality. During the year, the Company has developed applications and dashboards to monitor and improve product quality using early watch and alert system.

Dealer Management System (DMS) - developed by the Company has been extended to all dealers of the Company. DMS also helps the Company to exchange information between the Company and dealers online and provides business intelligence for undertaking initiatives to improve sales, service, product development and customer satisfaction.

RISKS AND CONCERNS

The fragility in global economic recovery is a major concern. Apart from the political unrest in some countries, tight monetary stance, the contagion of hardening crude and commodity prices in international markets are expected to impact Indian economy significantly. Any failure of monsoon could trigger significant supply constraints further fuelling inflation and interest rates. The success of new launches is important to maintain the momentum for the Company.

Government of India has indicated that with effect from 1st October 2011, the current DEPB scheme applicable to exports of two wheeler and three wheeler may be replaced by a duty drawback scheme. Industry expects the new scheme to adequately protect the current benefits to ensure continued competitiveness in the global markets.

INTERNAL CONTROL 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, recorded and reported.

HUMAN RESOURCE DEVELOPMENT

Human Resource Development is focussed and aligned to business needs towards improved performance and business results through the HR roadmap evolved over the years. The key components of the roadmap are - Employee engagement, resourcing, performance and compensation management, Competency based development, Career and succession planning and Organisation building.

The Company continues to be an employer of choice in most engineering schools and polytechnics in the country. The online performance management system has been streamlined across plants and locations including the field staff. Learning Management System (LMS) was leveraged fully for the functional competencies at entry level roles in the engineering streams. Competency assessment and development through various training programs have improved the capability of engineers for their delivery on the job. Skill Training Centre focusing on training and enhancement of fundamental skills have been expanded to other processes such as painting, welding, maintenance and material handling. Talent review conducted as a part of the talent management process has improved the rigour in identifying potential and providing individual development plans. Towards leadership development, the key competencies have been identified and exclusive assessment and development workshops conducted to cover top 200 of the senior management team.

The Company continues to maintain its record on industrial relations without any interruption in work.

As on 31st March 2011, the Company had 4,589 employees on its rolls.

ENVIRONMENT, HEALTH AND SAFETY (EHS)

The Company bagged the "Parivartan Sustainability Leadership Award" for 2011. This award is for Water Conservation Thought Leadership to recognize Indian companies, which have embraced sustainability in their business operations and supply chain and have shown leadership by taking initiatives for making their products, processes and facilities sustainable.

Efforts in material stewardship and 4R measures have helped to effectively manage the waste generated across the operations. Significant reduction in generation of paint sludge has been achieved through introduction of robot in painting operation. Introduction of advanced waste-water treatment technologies, simplification of treatment processes and optimization of chemical dosing through automation have resulted in reduction of chemical sludge generation.

A number of energy saving initiatives viz., optimal utilization of different equipments; heat loss elimination and efficiency improvements in the ovens and boilers; optimisation of higher rating motors and pumps and LED based street lights have resulted in reduction of specific fuel by 5% and specific power by 7% in comparison to previous year.

Rigor in implementing hazard control measures and effective safety training to all new recruits have further improved the safety standards in the Company.

The Company has been recertified second time under Environmental Management System (ISO14001:2004) and Occupational Health and Safety Management System (OHSAS 18001:2007).

CORPORATE SOCIAL RESPONSIBILITY

Srinivasan Services Trust (SST), co-sponsored by the Company with the vision of building self reliant rural community, was established in 1996. Over 15 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.

At present, SST is working in 1,000 villages, spread across Tamil Nadu, Karnataka, Maharashtra, Gujarat and Himachal Pradesh. Its major focus areas are: Economic Development, Health, Education, Environment and Infrastructure. Its significant achievements are:

- Through partnership with the community helped to form over 2,635 Self Help Groups (SHG).

- The Infant Mortality Rate and Maternal Mortality Rate reduced to 2 /1000 live births and 25 / one lakh births.

- 100% enrolment of children in schools and over 36,000 adult women made literate.

- Proper solid and liquid waste management practices adopted in 662 villages.

- Over 1,62,000 hectares of degraded forests reforested and 13,000 hectares of dry lands covered by watershed development activities.

- Over 39,657 families have taken up income generating activities. They earn an additional income from Rs.2,000/- to Rs.4,000/- per month.

- SHG members have a group saving of Rs.10.01 Cr.

- Over 61,600 of the families living in these villages have a monthly income around Rs.10,000/- per family.

Over 200 persons are involved in the activities, consisting of employees, volunteers, field directors, doctors, etc.

Charitable organisations, voluntary institutions, commercial entities have also joined the Company as 'Partners in Progress'.

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.

6. SUBSIDIARY COMPANIES

As on date of this report, the following are the subsidiaries of the Company:

Name of the Company Subsidiary of

Sundaram Auto Components Limited

TVS Energy Limited

TVS Housing Limited TVS Motor Company Limited

TVS Motor Company (Europe) B.V.

TVS Motor (Singapore) Pte. Limited

PT. TVS Motor Company Indonesia TVS Motor (Singapore) Pte. Limited

TVS Wind Power Limited TVS Energy Limited TVS Wind Energy Limited

During the year under review, the Company acquired the entire paid up capital of Rs.5 lakhs of TVS Housing Limited (TVS Housing) and thereby TVS Housing became a wholly owned subsidiary of the Company effective 21st June 2010.

During the year under review, the subsidiary company viz., TVS Energy Limited subscribed to the equity capital of TVS Wind Power Limited (TVS Wind Power) and TVS Wind Energy Limited (TVS Wind Energy) amounting to Rs. 4.10 Cr and Rs. 10.15 Cr respectively, constituting 73% of the paid up equity capital of these special purpose vehicles (SPVs).

SPVs therefore became subsidiaries of TVS Energy Limited effective 16th February 2011 in terms of Section 4(1)(b) of the Companies Act, 1956 (the Act) and thereby they became subsidiaries of the Company in terms of Section 4(1)(c) of the Act effective that date. TVS Wind Power and TVS Wind Energy closed their accounts for the first year, for a short period from 6th January 2011 to 31st March 2011 to coincide with the closing of the annual accounts of the holding company, viz., 31st March 2011.

7. CONSOLIDATED FINANCIAL STATEMENTS

As required under the Listing Agreement with the Stock Exchanges, the 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 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 fulfillment of conditions as stipulated in the said circular granting exemption to the holding company and passing of a resolution by the board in this regard.

The board of directors at their meeting held on 29th April 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 in Section 212(1) of the Act, of the subsidiary companies to the shareholders of the Company.

The annual accounts, reports and other documents of the subsidiary companies will be made available to the members, on receipt of a request 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 of the Company in compliance with the conditions of the said circular issued by MCA.

Performance of subsidiaries:

PT.TVS Motor Company Indonesia (PT.TVS)

During the year, PT.TVS Motor Company Indonesia (PT.TVS) increased its sale of two wheelers from 15,000 nos. to 19,800 nos., registering a growth of about 32%. The company's export initiatives proved successful as the company also exported about 4,700 nos. of vehicles to various countries.

The turnover of the company increased from Rs. 68.31 Cr in 2009-10 to Rs. 85.36 Cr in 2010-11. Increased margin and control over costs helped PT.TVS to reduce its operating loss level to Rs.39.84 Cr compared to Rs.64.23 Cr incurred in the last year.

PT.TVS continued its network expansion and as at the end of March 2011, the Company had its network across 16 provinces with 160 dealerships across Indonesia. During the year under review, the Company launched a new re-style version of TVS Neo and a refresh of TVS RockZ. The company also launched a double disc version of Apache and all these products are well accepted in the market. The company was quite successful in launching good quality products and more than 50,000 satisfied customers bear testimony to this fact. PT.TVS's products have won several awards for its superior style, design and features from leading auto magazines. PT.TVS tied up with leading finance companies to extend retail finance to its products.

During the first quarter of the current financial year 2011-12, the company was able to improve its sales to 7,000 nos. as against 5,700 nos. during the corresponding period of the last year. In May 2011, the company launched a new 150 cc hi-technology bebek TVS Tormax motorcycle in the market and it is expected to bring in additional sales numbers.

Sundaram Auto Components Limited (SACL)

The continued growth in automotive industry has enabled SACL to record its improved performance this year also.

During the year, SACL achieved a growth of 44% in the sale of Rubber and Plastics components business. SACL also earned a profit after tax of Rs.8.2 Cr during the year 2010-11 as against Rs.10 Cr in the previous year.

Due to abnormal increase in price of rubber and increase in fixed costs, the profitability of SACL was affected and resulted in lower contribution and consequently lower profits during 2010-11.

With the stability in commodity prices, SACL expects an improved performance during 2011-12.

SACL was awarded "National Best Partner for Business Development" by Hyundai Mobis in recognition of outstanding performance and achievement in India during the year.

SACL declared and paid an interim dividend of Rs.3/- per share (30%) for the year ended 31st March 2011.

TVS Energy Limited (TVS Energy)

During the year, TVS Energy successfully commissioned the Wind Energy project with a capacity of 9.35 MW at Gandamanur in Theni district, Tamil Nadu for captive consumption and 14.4 MW at Vagaikulam in Tirunelveli district, Tamil Nadu for sale of energy to Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) under Renewable Energy Certificate (REC) scheme.

It has registered the 14.40 MW project under REC scheme with the National Load Despatch Centre (central agency) and under Generation Based Incentive scheme with Indian Renewable Energy Development Agency Limited. Its entire revenue of Rs.2.79 Cr from operations was on account of wheeling of energy generated from 9.35 MW project to the captive consumer.

It has also promoted two SPVs namely TVS Wind Energy and TVS Wind Power as its subsidiaries for setting-up of 10.5 MW Wind Energy Capacity in Theni district, Tamil Nadu for wheeling energy to Captive Consumers. It has also signed agreements with Engineering Procurement and Construction (EPC) supplier for setting-up this Wind Energy Capacity.

Investment in subsidiaries:

During the year under review, the Company made additional investment in its subsidiary, PT.TVS to the tune of Rs.59.56 Cr in non cumulative, non convertible and redeemable shares of PT. TVS.

The Company also invested a sum of Rs.14.25 Cr in the equity capital of TVS Energy Limited during the year under review.

8. DIRECTORS

In terms of the Articles of Association of the Company, Mr K S Bajpai and Mr C R Dua, directors of the Company, are liable to retire by rotation at the ensuing annual general meeting of the Company, 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.

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. COST AUDITOR

The board of directors, subject to the approval of the Central Government, appointed Mr A N Raman, a Cost Accountant within the meaning of the Cost & Works Accountants Act, 1959 and holding a valid certificate of practice No.5359, as a Cost Auditor for conducting the Cost Audit for the financial year 2011-2012. The audit committee of directors recommended his appointment subject to the compliance of the requirements as stipulated in circular no.15/2011 dated 11th April 2011 issued by MCA.

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. The Central Government has also accorded its approval for the appointment.

The Company filed the Cost Audit Report in terms of Cost Accounting Records (Motor Vehicles) Rules, 1997 for the financial year 2009-2010 on 17th September 2010 which was due to be filed with the MCA on or before 30th September 2010.

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 in clause 49 of the Listing Agreement(s) with the Stock Exchange(s) form part of this Annual Report.

The chairman and managing director and the executive vice president - finance 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.

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 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 members of the Company. Any member 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 are 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."

ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co-operation received from the holding company i.e. Sundaram-Clayton Limited, Chennai. The directors 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.

For and on behalf of the Board

Bengaluru VENU SRINIVASAN

July 29, 2011 Chairman

Mar 31, 2010

The directors have pleasure in presenting the eighteenth annual report and the audited accounts for the year ended 31st March 2010.

1. FINANCIAL HIGHLIGHTS

Details Year ended Year ended

31.03.2010 31.03.2009

QUANTITATIVE

(Numbers in lakhs)

Sales:

Motorcycles 6.38 6.44

Mopeds 5.71 4.38

Scooters 3.10 2.59

Three wheelers 0.15 0.05

Total vehicles sold 15.34 13.46

FINANCIAL

(Rupees in crores)

Sales (net of excise duty) and

other income 4,484.68 3,741.18

EBITDA 303.62 247.02

Interest and finance charges (net) 63.17 55.01

Amortisation 61.75 58.03

Depreciation 102.53 102.88

Profit before tax 76.17 31.10

Provision for tax (including deferred

tax and fringe benefit tax) (11.84) 0.02

Profit for the year (after tax) 88.01 31.08

Surplus brought forward 33.02 31.40

Profit available for appropriation 121.03 62.48

APPROPRIATIONS:

First Interim dividend 16.63 16.63

Second Interim dividend 11.88 -

Tax on dividend paid 2.83 -

Provision for dividend tax 1.53 2.83

Transfer to general reserve 54.04 10.00

Surplus carried forward 34.12 33.02

2. DIVIDEND

The board of directors of the Company at their meeting held on 20th January 2010, declared first interim dividend of Re.0.70 per share (70%) absorbing a sum of Rs.19.46 Cr including dividend distribution tax for the year 2009-10. It was paid to the shareholders on 29th January 2010.

The board of directors of the Company at their meeting held on 21st July 2010 declared a second interim dividend of Re.0.50

per share (50%) absorbing a sum of Rs.13.41 Cr including dividend distribution tax for the year 2009-10. Hence the total amount of dividend including the second interim dividend, for the year ended 31s1 March 2010 will aggregate to Rs.1.20/- per share (120%) on 23,75,43,557 equity shares of Re.1/- each.

The board of directors of the Company do not recommend any further dividend for the year under consideration.

3. PERFORMANCE

During the year under review, the Company recorded a growth of 13.1% in sales with overall two-wheeler sales growing from 13.4 lakh units in the previous financial year to 15.2 lakh units, mainly driven by impressive growth of 19.4% in scooters and 30% in mopeds. Motorcycles declined marginally by 1% due to lower exports.

However, new launches of TVS JIVE and TVS wego will enable the Company to grow in the hitherto un-addressed segments of motorcycles and scooters respectively. With the launch of 4-stroke three-wheelers, the Company expanded its sales of three-wheelers and doubled its market share to 10% in the domestic market.

The Companys total revenue including other income grew from Rs. 3,741.18 Cr in the previous year to Rs. 4,484.68 Cr in the current year. Profit for the year after tax and exceptional items was Rs. 88.01 Cr as against Rs. 31.08 C r of previous year.

The Company expects to consolidate further in the two-wheeler segment, with additional sales coming from the new products launched during the year and it will also commence exports of three-wheelers during 2010-11. With these, the Company is confident of further improved business performance during 2010-11.

4. BONUS SHARES

The board has recommended issue of bonus equity shares to the shareholders in the proportion of one equity share of Re.1/- each for every one equity share of Re.1/- each held by them by capitalising an equivalent amount standing to the credit of the general reserve account of the Company for approval of the shareholders through Postal Ballot. The said bonus equity shares will be issued and allotted to those shareholders whose names appear in the register of members and in the beneficial ownership position held with the depositories as on the record date to be fixed later.

5. AMENDMENT TO MEMORANDUM OF ASSOCIATION

The board has approved a proposal for amendment to the capital clause of the memorandum of association of the Company for increase in the authorized share capital from Rs.25 Cr to Rs.50 Cr, in order to accommodate the increase in share capital after the proposed issue of bonus equity shares. This is subject to approval of the shareholders through Postal Ballot.

The board has recommended the proposed issue of bonus equity shares to be considered and approved by the shareholders by passing appropriate resolutions through Postal Ballot process in accordance with the rules governing Postal Ballot and in order to complete the issue of bonus equity shares within two months as required under SEBI (Issue of Capital and Disclosure Requirements) Regulation, 2009.

Therefore, a separate notice is being sent to the shareholders seeking their consents through Postal Ballot for increasing the authorized share capital of the Company in terms of Sections, 16, 94 and other applicable provisions of the Companies Act, 1956 and for capitalization of an equivalent amount standing to the credit of the general reserve account in order to accommodate the proposed issue of bonus equity shares.

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In 2009-10, the two wheeler industry saw remarkable growth after two consecutive years of low growth and sales crossed 10 mn units. Early recovery of the economy from the financial crisis and resurgence in domestic demand aided by fiscal stimulus resulted in exceptional growth rates of 33% and 40% in third and fourth quarters of 2009-10 respectively, resulting in an annual growth rate of 24% for the year.

The Company recorded an overall growth of 13.1% in two wheeler sales. This was driven by an impressive 19.4% growth in scooter segment and 30.3% growth in the moped segment. Motorcycle sales declined marginally by 1 % mainly due to lower exports owing to the global financial crisis. Domestic motorcycle sales, however, grew by 6%. New launches of TVS JIVE and TVS wego gave the Company an impressive entry into the unaddressed markets of executive segment of motorcycle and higher cc scooter segment respectively. Both products are expected to pave the way for a higher market share for the Company in the coming years. Launch of Apache RTR180 has reinforced the Companys position in the premium segment of the motorcycle market. During the year, the Company also launched a four stroke three wheeler with superior features. Sales of spare parts grew by 34%.

The Company achieved annual two wheeler sales of 1.52 mn, a growth of 13.1% from 1.34 mn units sold in the previous year. The turnover increased from Rs.3,741 Cr to Rs.4,485 Cr. The profit before tax (PBT) of Rs.76.17 Cr for the year was higher by 144% than the previous years PBT of Rs 31.10 Cr. The profit after tax (PAT) of Rs.88.01 Cr for the year was higher by 183% than the previous years PAT of Rs.31.08 Cr.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The two wheeler industry experienced an impressive growth of 24% during 2009-10. Smaller towns (<1mn population), which accounted for 75% of the industry, grew by 29% in spite of restricted availability of retail finance to end customers.

Domestic motorcycle sales grew by 30%. Exports declined by 1% in the first half of the year, but witnessed a dramatic turnaround in the second half growing at 34% leading to annual growth of 16%.

In the motorcycle category, economy segment grew by 6% mainly led by export demand. Aided by new launches, executive and premium segments grew by 30% and 38% respectively. However, the category share of motorcycles marginally declined from 81% in 2008-09 to 80% in 2009-10.

Ungeared scooters maintained its momentum with a growth of 24%. Introduction of new products and renewed focus on market expansion by industry players enabled this growth. The category share remained constant at 14%.

In contrast to the low growth of 2% in 2008-09, mopeds grew by 28% in 2009-10. The category share increased from 5% in 2008-09 to 6% in 2009-10.

BUSINESS OUTLOOK AND OVERVIEW

2008-09 2009-10

Particulars Sales Growth Category Sales Growth Category

in Mn in % share in Mn in % share (units) (units)

Motorcycles 6.79 4% 81% 8.42 24% 80%

Ungeared scooters 1.15 12% 14% 1.47 24% 14%

Mopeds 0.45 2% 5% 0.57 28% 6%

Total two wheelers 8.39 5% 100% 10.46 24% 100%

The growth momentum of the economy is expected to strengthen further. Coupled with the Government focus on infrastructure improvement, this will bolster the economies of smaller towns (<1 mn population) and rural areas. This translates to significantly enhanced disposable incomes across segments. Thus higher affordability and increased mobility needs will provide considerable scope for industry growth.

Consequently motorcycle segment is expected to grow by 14%, ungeared scooter segment by 24% and mopeds by 10%.

COMPANY PERFORMANCE

New Product Launches and Initiatives:

During the year 2009-10, the following new products and variants were launched.

The Company introduced TVS JIVE 110 cc with innovative T-Matic technology in the executive segment which accounts for 60% of the total motorcycle market. This motorcycle allows hands-free gear shift because of absence of the clutch lever. Coupled with this an anti-stall mechanism makes smooth riding possible at low speeds even in high gears, without the engine shutting off. It is also the first motorcycle in the country to have an under-seat storage compartment, large enough to hold a water bottle, vehicle documents and even a small umbrella.

TVS wego marks the foray of the Company into the higher cc (>100 cc) scooter segment which accounts for 80% of the scooter market. It is a family-friendly scooter that is designed for multiple users, be they are men or women, young or old. This sleek metal bodied scooter strikes a perfect balance between stability and maneuverability, power and mileage, making it a delight to ride for any category of users. The all aluminium low-friction engine ensures best-in- class mileage. Multi-reflector halogen headlamps and LED tail lamp with optical guides give the scooter dynamic styling and effective lighting. The Body Balance Technology makes it the best scooter to handle in city traffic conditions.

TVS Apache RTR 180s sporty, chiseled looks and unmatched performance enabled by superior engine technology, make the bike a Class leader in terms of performance and styling. The bike has an aerodynamic design and high power-to-weight ratio that enable excellent acceleration and handling.

TVS TRU 4 oil launched successfully 3 years ago, has captured 3% market share in 4T market. In line with the changes happening in lubricants international market, the Company has developed TRU4 PREMIUM SAE 10 w 30 oil, a semi synthetic and fuel efficient lubricant. Subsequent to the successful tests, this product was awarded JASO MA2 certification. With TRU4, the Company has entered international markets like Srilanka and Africa.

Two Wheeler Operations:

Domestic:

In motorcycle category, the Company achieved a sales growth of 6% during 2009-10. Sales of TVS Apache grew by an impressive 26% and TVS StaR grew by 5%. TVS JIVE launched at end of the year is well received by the target segment and expected to contribute significantly in the next year.

"Scooty" continues to be a significant player in the scooter segment.The sales of Scooty Pep and Streak grew by 19%.The Company market share in the overall scooter market declined marginally from 21 % to 20%.There was a delay of six months in the launch of TVS wego a unisex higher cc scooter. The product is well accepted in the market and will help the Company to regain market share in the scooter segment. With an improved rural economy, mopeds grew by 30.3% during the year.

Exports:

During the year, the Company exported 1.63 lakh vehicles. The global financial crisis and consequent lower sales mainly in Africa resulted in a 17% decline in sales. However value of exports declined only by 1%, due to better product mix and higher realization. Exports revived in the 4,h quarter registering a growth of 13% and are expected to grow further during 2010-11. During 2009-10, the Company commenced export of TVS Apache to Brazil and the initial response has been encouraging.

Three Wheeler Operations:

The three wheeler industry (non diesel 3 plus 1 segment) grew by 28% during 2009-10 to reach 3 lakh units. Domestic market grew by 45% to reach 1.32 lakh numbers. Domestic Industry has registered an impressive growth after 3 years . Export market at 1.68 lakhs grew by 17%.

The Company has launched its four stroke three wheeler,

offering much superior features, performance and experience. During the year, the Company also developed a pan India presence in three wheelers. These initiatives enabled the Company to double its market share in the domestic market to10% in 2009-10.The Company has started exploring the export markets which may contribute significantly to the total three wheeler market.

OPPORTUNITIES AND THREATS

Growth in two-wheeler demand will come mainly from rising population in target age and income groups and increased use of personal transport. Smaller towns are expected to contribute more to the industry growth.

TVS StaR City and TVS Sport motorcycles stand to gain from this. Customer acceptance, appreciation of the new technology and positive word of mouth will result in increased sales of TVS JIVE motorcycles.

Apache RTR 180 has further strengthened the Companys position in the premium segment. However it requires frequent refreshes and upgrades to remain on top of mind of younger customers.

The Company has a strong presence in the sub 100cc ungeared scooter segment. The launch of TVS wego in the large scooter segment further increases the Companys growth prospects in the scooter category.

OPERATIONS REVIEW

Quality:

The Company has significantly improved the quality of all its existing and new products. Steps have also been taken to improve the quality of after-sales service. The combination of these measures has enabled the Company to achieve best in class customer satisfaction.

Total Quality Management (TQM):

The Company has been using the philosophies of TQM as the cornerstone of its management. The Company has continued to benefit from 100% participation of employees in TQM activities, for the fourth year in succession. The employees have completed more than 1,300 projects through QC Circles and Cross Functional Teams.

During 2009-10, the Company received and implemented an average of 44 suggestions per employee. The Company won First Prize for "Excellence in Suggestion Scheme" from INSSAN (Indian National Suggestion Scheme Association) for seventh consecutive year.

Cost management:

The Company continues its rigorous focus on its costs through an effective deployment system. Value engineering and aggressive global sourcing projects are being pursued to reduce material costs and also to partially neutralize input material cost increases.

Research and development:

The Companys strong Research and Development (R&D) team is supported by modern computer aided laboratory, capable of developing new and innovative products. It has state-of-art facilities for engine testing, Noise, Vibration and Harshness (NVH) measurements and life testing. At present, nearly 600 engineers are working on development of new products and in other advanced areas of technology. The Company works with leading technological research laboratories and institutions. The Company is also working on development of fuel-efficient technologies and C02 reduction technologies to remain ahead of needs of consumers and environment regulations.

R&D has developed and launched 3-wheelers with alternate fuels like LPG and CNG. Indias first motorcycle with auto clutch technology, a motorcycle which runs on ethanol blended fuel for Brazilian market, a two wheeler with music system for ASEAN market are the innovations in the current year. R&D has developed and demonstrated a motorcycle with Anti Lock brake system technology, a scooter and a 3-wheelev with hybrid technology. R&D has also ensured that during 2010-11 all products will meet new emission norms.

R&D team has so far published 58 technical papers in national and international conferences.

Information technology:

The Company has been using enterprise wide system to integrate all the business processes within the Company as well as integrating suppliers and dealers business processes. The Company also uses Product Lifecycle Management to reduce the new product development lead time, control cost and improve quality. During the year, the Company has developed applications to monitor and improve product quality using early watch and alert system.

Dealer Management System (DMS) - developed by the Company has been further simplified and extended to 143 more dealers during the year. DMS also helps the Company to exchange information between the Company and dealers on-line and provide business intelligence for undertaking initiatives to improve sales, service and product development.

Long term wage settlement with Union:

The workers of the Company in Hosur and Mysore plants formed a Trade Union called TVS Motor Company Employees Union. During the year, the Hosur branch of the Union concluded a wage settlement with the management whereby the emoluments of the employees have increased substantially.

Similarly, the long term wage settlement is due for renewal for Mysore plant and negotiations with the Union will commence after the receipt of charter of demands from them.

Financial Performance:

The Companys financial performance for the year 2009-10 as compared to the previous year is furnished in the following table:

Year 2009-10 Year 2008-09

Particulars Rs in % Rs in %

crores crores

Sales:

Motorcycles 2,046.23 45.7 1899.72 50.8

Mopeds 952.48 21.2 707.34 18.9

Scooters 822.03 18.3 664.81 17.8

Spares and accessories 421.84 9.4 363.93 9.7

Three Wheelers 120.53 2.7 35.12 0.9

Other income 121.57 2.7 70.26 1.9

Total Revenue 4,484.68100.0 3741.18 100.0

Raw material consumed 3114.00 69.4 2761.64 73.8

Staff cost 251.25 5.6 204.52 5.5

Stores and tools

consumed 34.36 0.8 30.70 0.8

Power and fuel 49.74 1.1 46.25 1.2

Repairs and

maintenance 48.08 1.1 34.09 0.9

Packing and

freight charges 132.71 3.0 116.82 3.1

Advertisement and

publicity 118.67 2.6 55.54 1.5

Sales promotion and

other marketing expenses 163.28 3.6 122.34 3.3

Other expenses 268.97 6.0 122.26 3.3

Total (Excl. Interest,

Amortisation &

Depreciation) 4181.06 93.3 3494.16 93.4

EBIDTA 303.62 6.8 247.02 6.6

Interest 63.17 1.4 55.01 1.5

Amortisation 61.75 1.4 58.03 1.5

Depreciation 102.53 2.3 102.88 2.8

Profit before tax 76.17 1.7 31.10 0.8

Provision for tax

(incl deferred tax) (11.84)(0.3) 0.02 -

Profit after tax 88.01 2.0 31.08 0.8

Profit before tax for the year 2009-10 is after net debit of Rs.46.72 Cr. on account of exceptional items comprising of (a) Profit on sale of land - Rs.54.07 Cr. (included under other income); (b) Accelerated amortization of tools & dies of slow moving models - Rs.11.77 Cr. (included under Raw materials consumed); and (c) Loss on sale of investment in TVS Finance and Services Limited - Rs.89.02 Cr. (included in other expenses).

Profit before tax for the year 2008-09 is after debit of Rs.3.27 Cr. on account of exceptional item relating to accelerated amortization of moulds and dies on slow moving models (included under Raw materials consumed).

Some of the key ratios for the current year are furnished below:

Description UOM 2009-10 2008-09

EBITDA / turnover % 6.8 6.6

(including exceptional items)

EBITDA / turnover % 7.8 6.7

Profit before tax / turnover % 1.7 0.8

(including exceptional items)

Profit before tax / turnover % 2.7 0.9

Return on capital employed % 8.0 5.6

Return on net worth % 11.2 4.1

Earnings per share at a face

value of Re. 1/-per share Rs. 3.7 1.3

RISKS AND CONCERNS

The continued economic crisis in some European countries can lead to global economic downturn. Any failure of monsoon could trigger a significant rise in inflation and interest rates thus squeezing the disposable income of the customer. Retail finance continues to be a concern. A further rise in interest rate would be detrimental to industry growth. The success of new launches would be highly significant for continued momentum for the Company.

INTERNAL CONTROLS 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, recorded and reported.

HUMAN RESOURCE DEVELOPMENT

Human Resource Development is focussed and aligned to business needs towards improved performance and business results through the HR roadmap evolved over the years. The key components of the roadmap are - Employee engagement, Resourcing, Performance & compensation management, Competency based development, Career & succession planning and Organisation building. The Company continues to be an employer of choice in most engineering schools and polytechnics in the country.

Focus on workmen training took a new impetus with the setting up of Skill Training Centre, focussing on training and enhancement of fundamental skills. Functional competencies for various functions across the Company have been finalised and an online Learning Management System (LMS) has been rolled out.

Career templates and succession plans are in place for all critical roles.Towards Leadership development key competencies have been identified and exclusive assessment and development workshops conducted for the top 100 of the senior management team.

The Company continues to maintain its record on industrial relations without any interruption in work. As on 31sl March 2010, the Company had 4,248 employees on its rolls.

ENVIRONMENT, HEALTH & SAFETY (EHS)

Introduction of advanced waste water treatment technologies, simplification of treatment processes and optimization of chemical dosing and automation resulted in 31% reduction of specific Effluent Treatment Plant (ETP) sludge generation at Hosur plant and 14% at Mysore plant.

Significant reduction in generation of paint sludge has been achieved through process improvement, use of textured plastics and pigmented plastics.

A number of energy saving projects, optimal utilization of different equipments and waste heat recovery have resulted in reduction of specific fuel by 15% and specific power by 11 %

Rigour in implementing hazard control measures and effective safety training to all new recruits have further improved the safety standards in the Company.

Environmental Management System (ISO14001:2004) and Occupational Health and Safety Management System (OHSAS 18001:2007) are being adopted as an integrated EHS Management System.

CORPORATE SOCIAL RESPONSIBILITY

Srinivasan Services Trust (SST), co-sponsored by the Company with the vision of building self reliant rural community, was established in 1996. Over the 14 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.

At present, SST is working in 703 villages, spread over in the States of Tamilnadu, Kamataka, Maharashtra, Gujarat and Himachal Pradesh. Its major focus areas are: Economic Development, Health, Education, Environment and Infrastructure.

One of the ways to involve rural women in community development has been through Self Help Groups (SHG). These voluntary bodies have succeeded in giving them access to credit with the necessary training to establish micro enterprises that can give them a regular income. SHG have also provided a forum where women are exposed to programmes that impact their lives - education, healthcare, hygiene, nutrition and environmental issues. Increased awareness has resulted in women taking control of their lives and playing a more active role in their households and the community at large.

Over 40% of the families living in these villages have a monthly income around Rs. 10,000/-. Its significant achievements are:

- There has been no maternal mortality in any of the project villages.

- Infant mortality is down to 1.8 per 1,000 live births.

- 100% enrolment of children in schools.

- Over 21,000 adult women made literate.

- Proper solid and liquid waste management practices adopted in most villages.

- Over 1,40,000 hectares of degraded forests reforested.

- Almost 13,000 hectares of dry land covered by watershed development activities.

Achievements:

- Our partnership with the community has helped to form over 2,122 SHG.

- Over 30,654 families have taken up income generating activities. They earn an additional income from Rs.1,500/- to Rs.2,500/- per month.

- SHG members have a group saving of Rs.7.03 Cr and have received bank loans of Rs.23.79 Cr.

- Increased participation of women in development programmes, greater access and control over community resources / government schemes.

- More women are now aware of issues relating to health, nutrition, family planning and womens rights.

- Visible changes in womens participation and attendance in meetings and training programmes.

- 43% of the local representatives are members of SHG.

- Increase in social status at home and in the community.

CAUTIONARY STATEMENT

Statements in the management discussion and analysis report describing the Companys 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 Companys 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.

7. SUBSIDIARY COMPANIES

As on date of this report, the following are the subsidiaries of the Company

Name of the Company (M/s) Subsidiary of M/s

Sundaram Auto Components Limited TVS Motor Company Limited

TVS Energy Limited TVS Motor Company Limited

TVS Housing Limited TVS Motor Company Limited

TVS Motor Company (Europe) B.V. TVS Motor Company Limited

TVS Motor (Singapore) Pte. Ltd TVS Motor Company Limited

PT. TVS Motor Company Indonesia TVS Motor (Singapore) Pte.Ltd

During the year under review, the Company acquired the entire shareholding of M/s TVS Energy Limited (TVS Energy) and thereby TVS Energy became a wholly owned subsidiary of the Company effective 3rd December 2009.

During the year 2010-11, the holding company viz., M/s.Sundaram-Clayton Limited has also participated in the equity capital of TVS Energy and hence the status of TVS Energy changed to subsidiary of the Company from that of wholly owned subsidiary.

The accounts of the subsidiaries are consolidated with the accounts of the Company in accordance with Accounting Standard 21 (AS 21) prescribed by The Institute of Chartered Accountants of India. The consolidated accounts duly audited by the statutory auditors and the consolidated financial information form part of the annual report.

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 its letter No. 47/516/2010-CL-III dated 4th 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, if any member wishes to inspect the same during the business hours of any working day.

The Company on 21st June 2010 acquired the entire paid up capital of Rs. 5 lakhs of TVS Housing Limited (TVS Housing) and thereby TVS Housing has become a wholly owned subsidiary of the Company effective 21st June 2010. TVS Housing was incorporated on 22nd March 2010 and it will close its first years accounts by 31 st March 2011.

Performance of Subsidiaries:

PT. TVS Motor Company Indonesia (PT. TVS)

PT. TVS which is in its third year of operation has so far sold around 30,000 vehicles. During the year 2009, the Company launched a new 125 cc bebek TVS RockZ with the unique feature of integrated music system and the product, apart from winning awards for its attractive design and style, has been well received in the market.

During the year 2009-10, the Company was able to improve its exit gross margin from a level of 5% to around 17% in March 2010. The Company has already achieved around 50% of localization in procurement of materials and plans to increase this over a period of time. Another milestone was to start exporting its products to other Asian markets.

During the year 2009-10, PT. TVS sold 15000 two wheelers. Consequent to higher expenditure required on product development and brand building, the operations of the Company resulted in a loss (before tax) of Rs. 104.49 Cr.

In the coming years, the focus will be on building the brand image of TVS as a trustworthy manufacturer of durable and innovative products, increasing the sales and distribution network from current 106 to 500 and reaching a monthly sales of 10,000 two wheelers.

Sundaram Auto Components Limited (SACL)

The growth in automotive industry has enabled SACL to record an improved performance during the year.

SACL also has secured substantial business from Daimler India, Ashok Leyland - Nissan and Toyota India for their vehicles. SACL has shown a sales growth of 23% in the year 2009-10, compared to the previous year 2008-09. The profit before tax for the year is Rs. 12.40 Cr as against a loss of Rs. 2.07 Cr in the previous year 2008-09.SACL has earned a profit after tax of Rs.10.00 Cr in the year 2009-10.

SACL has also declared an interim dividend of Rs.3.50 per share (35%) for the year ended 31st March 2010 and the same was paid on 19th April 2010.

Investment in subsidiaries:

During the year under review, the Company made additional investment in its subsidiary, PT. TVS Motor Company Indonesia to the tune of Rs.93.55 Cr through the Companys wholly owned foreign subsidiary, namely TVS Motor (Singapore) Pte Limited.

The Company also invested a sum of Rs. 37.50 Cr in TVS Energy Limited during the year under review. It will start operating in the year 2010-11.

8. DIRECTORS

Your directors are happy to report that Mr Venu Srinivasan chairman and managing director of the Company has been conferred in January 2010 Padmashrf, a prestigious adoration by Government of India in appreciation of his significant contribution for the promotion of trade, industry and corporate social responsibility.

Mr Venu Srinivasan also received the distinguished civilian honour "Order of Diplomatic Service Merit" from the President of the 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 Venu Srinivasan was re-appointed as chairman and managing director of the Company, effective 24th April 2010 by the board at its meeting held on 21st April 2010 on such terms and conditions, subject to the approval of the shareholders at the ensuing annual general meeting of the Company.

Mr H Lakshmanan, director and Mr R Ramakrishnan, who was co-opted as a director of the Company in the casual vacancy caused by resignation of Mr Gopal Srinivasan, retire at the ensuing annual general meeting of the Company in terms of the Articles of Association, and being eligible, offer themselves for re-appointment.

The brief resume of the directors M/s. Venu Srinivasan, R Ramakrishnan and H Lakshmanan and other information have been detailed in the notice convening the annual general meeting of the Company. Appropriate resolutions for their reappointment are being placed for approval of the shareholders at the ensuing annual general meeting. The directors recommend their re-appointment as directors of the Company.

9. AUDITORS

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai, 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(1 B) of the Companies Act, 1956.

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 chairman and managing director and executive vice president - finance 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.

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 Companies Act, 1956 read with the Companies (Disclosure of par ticulars in the report of board of directors) Rules, 1988, the inf ormation 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 31s1 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."

12. ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co-operation received from the holding Company i.e. Sundaram-Clayton Limited, Chennai.The directors 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.

For and on behalf of the Board

VENU SRINIVASAN Chairman

Bengaluru July 21, 2010

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