The directors have pleasure in presenting the twenty-fourth annual
report and the audited financial statements for the year ended 31st
1. COMPANY PERFORMANCE
The Company continued to grow ahead of the industry for the second year
in succession and in 2015-16, registered sales of 25.7 lakh two
wheelers, growing by 7% over last year. Sale of Motorcycles increased
by 7% and scooters by 16%. Moped sales declined by 2.8%. Three-wheeler
sales of the Company increased by 3% in 2015-16. Sales of spare parts
grew by 12.7%. Despite continued weakness in economic activity and
increased competitive intensity, Company managed to grow
Company''s products continued to top the quality charts. Across
categories almost all the products were labelled as best by the
recently concluded JD Power Study for the second consecutive year.
Total revenue of the Company including other income increased from
Rs.10,072.62 Cr in the previous year to Rs.11,295.18 Cr in the current
year. Profit before tax (PBT) for the year 2015-16 increased
significantly from Rs. 456.16 Cr in the previous year to Rs.565.97 Cr
in the current year. Similarly, PAT increased from Rs. 347.83 Cr
achieved in the previous year after considering the extra- ordinary and
exceptional items to Rs. 432.14 Cr in 2015-16.
2. FINANCIAL HIGHLIGHTS
Year ended Year ended
Details 31-03-2016 31-03-2015
Quantitative (Numbers in lakhs)
Motorcycles 10.17 9.51
Mopeds 7.38 7.59
Scooters 8.13 7.00
Three Wheelers 1.11 1.08
Total vehicles sold 26.79 25.18
Financials (Rupees in crores)
Motorcycles 4236.16 3810.20
Mopeds 1554.81 1553.04
Scooters 3054.91 2431.91
Three Wheelers 1023.92 976.00
Spares & Accessories and
Raw Materials 1238.38 1093.10
Other Operating Income 135.69 178.08
Other Income 51.31 30.29
Sales (Net of Excise duty) &
other income 11295.18 10072.62
Year ended Year ended
Details 31-03-2016 31-03-2015
(Rupees in crores)
EBITDA 848.35 668.91
Finance Charges & Interest (Gross) 46.24 27.42
Amortisation 46.30 32.00
Depreciation 189.84 153.33
Profit before tax 565.97 456.16
Less:Provision for tax 133.83 108.33
Profit for the year after tax 432.14 347.83
Add: Balance in Statement
of Profit and Loss 722.08 481.76
Profit available for appropriation 1154.22 829.59
Appropriations: Dividend and Dividend
Distribution Tax # 140.92 107.51
Surplus carried forward 1013.30 722.08
# Rs.140.92 Cr includes Rs.0.20 Cr relating to increased surcharge
applicable on dividend relating to 2014-15 paid in 2015-16.
The board of directors of the Company (the board) at its meeting held
on 29th January 2016, declared a first interim dividend of Re.1/- per
share (100%) for the year 2015-16 absorbing a sum of Rs. 55.65 Cr
including dividend distribution tax. The same was paid to the
shareholders on 10th February 2016.
The board at its meeting held on 12th March 2016 declared a second
interim dividend of Rs. 1.50 per share (150%) for the year 2015-16
absorbing a sum of Rs. 85.07 Cr including dividend distribution tax.
The same was paid to the shareholders on 23rd March 2016.
Hence, the total amount of both dividends for the year ended 31st March
2016 aggregated to Rs. 2.50 per share (250%) on 47,50,87,114 equity
shares of Re.1/- each.
The board does not recommend any further dividend for the year under
5. DIRECTORS'' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) 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 2016, the applicable Accounting Standards had been
followed and that there were no material departures;
ii. that the directors had selected such accounting policies and
applied them consistently and made judgments and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit of the Company for the year under review;
iii. that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act, for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
iv. that the directors had prepared the accounts for the financial year
ended 31st March 2016 on a going concern basis;
v. that the directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively; and
vi. that the directors had devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
6. CORPORATE SOCIAL RESPONSIBILITY (CSR)
CSR activities have already been textured into the Company''s value
system through Srinivasan Services Trust (SST), the CSR arm of the
Company established by the group companies in 1996 with the vision of
building self-reliant rural community.
Over 20 years of service, SST has played a pivotal role in changing
lives of people in rural India by creating self-reliant communities
that are models of sustainable development.
The Company is eligible to spend on their ongoing projects/ programs,
falling within the CSR activities specified under the Act, as mandated
by the Ministry of Corporate Affairs for carrying out the CSR
The Committee formulated and recommended a CSR policy in terms of
Section 135 of the Act along with a list of projects / programmes to be
undertaken for CSR spending in accordance with the Companies (Corporate
Social Responsibility Policy) Rules, 2014.
Based on the recommendation of the CSR Committee, the board has
approved the projects / programs carried out as CSR activities by the
following non-profitable organizations having an established track
record for 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 2015-16.
No. Name of the Trust (Rs in Lakhs)
1 Sri Sathya Sai Central Trust 385.00
2 AIM for SEVA 50.00
3 NIMHANS 64.50
4 Voluntary Health Services 25.00
5 Srinivasan Services Trust 191.00
Presently, SST is working in 3,449 villages spread across Tamil Nadu,
Karnataka, Maharashtra, Himachal Pradesh and Andhra Pradesh covering
about 20,90,000 population and 4,63,500 families. Its major focus areas
are Economic development, health care, quality education, environment
Of the 3,449 villages, 2,654 villages (16,72,620 population and
3,67,170 families) have been funded by the Company during the year.
Achievements in 2,654 villages are:
- 2,27,667 families living in these villages have a monthly income of
above Rs.15,000/-. They have financial security.
- 1880 farmers groups have been formed with 31,323 members.
- Improved agriculture practices enabled 1,51,862 farmers owning
1,64,124 hectares to increase the yields than the state average by 15%.
- 1,36,050 families earn more than Rs 3,500/- per month through
- Formed 7,064 Self Help Groups. These groups have 1,06,720 women as
- Of the 1,06,720 members, 99,170 members are in income generation
activities. They earn a minimum income of Rs. 2,500/- per month.
- 60,512 children in the age group below 5 are not malnourished.
- 2,75,970 women are freed from anemia.
- 2,32,436 households were provided access to toilet facilities.
- The morbidity percentage reduced from 9% to 5%.
- Enrolment in anganwadis increased from 86% to 100% and attendance is
- 1,073 anganwadis have met all the Integrated Child Development
Services Scheme (ICDS) standards.
- 88% involvement of mother volunteers in the functioning of
anganwadis. They volunteer their time to ensure proper functioning.
- 100% enrolment of children in schools. There are no drop outs in the
- Percentage of slow learners reduced in schools from 27% to 14%.
- Out of 1,204 schools, 807 schools are now model schools.
- 73,345 illiterate women out of 1,18,872 have been made literates.
Environment and Infrastructure:
- 2,14,120 households dispose solid waste through individual and common
compost pits. 82 tons of vermi compost generated per month from wastes.
- Sewage water from 2,18,234 households disposed through soak pits,
kitchen gardens and drains.
- Safe drinking water is available to 2,137 villages.
Communities take care of their development needs. 5,302 social leaders
are active in this effort.
As required under Section 135 of the Act read with Rule 8 of the
Companies (Corporate Social Responsibility Policy) Rules, 2014, the
annual report on CSR containing the particulars of the projects /
programmes approved and recommended by CSR Committee and approved by
the board for the financial year 2015-16 are given by way of Annexure
IV attached to this Report.
7. FINANCIAL PERFORMANCE & POSITION OF SUBSIDIARIES & ASSOCIATE
The following companies and bodies corporate are the subsidiaries /
associates of the Company:
- 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;
- Sundaram Business Development Consulting (Shanghai) Co. Ltd.,
- Sundaram Holding USA Inc., Delaware, USA.
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.2,737 Cr including Rs.491 Cr in Plastics
Component business. SACL earned a profit after tax of Rs.28.64 Cr
SACL increased its customer base by addition of new customers for
manufacture of cluster components and heating, ventilating and
SACL productionized 314 new parts for various customers.
SACL received the following awards:
- Outstanding Supplier for achieving Delivery Target from TOYODA
- Q1 certification from FORD India
- SQ mark certification from Hyundai Motors India Ltd.
- Best Supplier Kaizen award from India Japan Lighting Pvt. Ltd.
SACL on 24th December, 2015, declared a first interim dividend of
Rs.4.00 per share (40%) for the year 2015-16 absorbing a sum of Rs.5.56
Cr including dividend distribution tax.
SACL again on 7th March, 2016 declared a second interim dividend of
Rs.3.00 per share (30%) for the year 2015-16 absorbing a sum of Rs.4.18
Cr. including dividend distribution tax.
Hence, the total amount of both dividends paid, for the year ended 31st
March, 2016 aggregates to Rs.7.00 per share (70%) thereby absorbing a
sum of Rs.9.74 Cr. including dividend distribution tax.
TVS Housing Limited (TVSH) / Emerald Haven Realty Limited (EHRL)
EHRL is the developer of the Nedungundram, Chennai project of TVSH.
Phase 1 was developed as apartments and Phase 2 was launched as villas
and row houses. As of 31st March 2016, all the 448 apartments have
been sold and customers have taken possession of the apartments.
Despite the tough real estate market condition in Chennai, the
responses for the villas and row houses have been quite good. As the
phase 2 is nearing completion, the Company has already sold about 90%
of the units. The Company is confident that the remaining units would
be sold during 2016-17.
PT.TVS Motor Company Indonesia (PT TVSM)
During 2015-16, motorcycle industry in Indonesia declined by 12% (from
7.6 million units in 2014-15 to 6.6 million units in 2015-16). The
decline was mainly due to lower economic growth and weak consumer
sentiments due to subdued commodity prices and further tightening of
credit. While the bebek segment declined by 33%, sports motorcycle
segment went down by 23%. The scooter category marginally declined by
5%. Within 2 wheelers, the scooter segment continued to dominate with a
category share of 75%.
During the year, PT TVSM launched the 110cc Dazz scooter with fuel
injection system in Indonesian market. It also launched the new Apache
200cc sports motorcycle. PT TVSM continued its focus on exports to
ASEAN and African countries. PT TVSM commenced its exports to Latin
American market by entering Colombia.
The decline in two wheeler industry resulted in lower domestic sales
during 2015-16. PT TVSM sold total of 17,100 vehicles as against 23,300
vehicles sold in the previous year. However, the focus on ASEAN and
African markets helped the company to export 15,000 nos, registering an
increase of 4% over the previous year. The EBITDA loss for the year of
6.8 Mn USD is marginally lower than EBITDA loss of 7.7 Mn USD of
2014-15. Focus during 2016-17 will be to build on the portfolio and
substantially reduce the EBITDA loss.
TVS Motor Company (Europe) B.V & TVS Motor (Singapore) Pte. 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.
Sundaram Business Development Consulting (Shanghai) Company Limited
SBDC was initially established to explore options of sourcing auto
components and local assembly of two wheelers etc., in China. After a
complete review, board felt that it may not be viable to carry out
manufacturing activities in China and therefore steps were taken for
closure of operations of SBDC. All required formalities were completed
in April 2016. Hence in the books a provision of Rs.1.07 Cr has been
made for diminution in the value of investments.
Sundaram Holding USA Inc.
SACL made an investment of USD 750 consisting of 750 shares with face
value of USD 1 each in Sundaram Holding USA Inc., (SHUI) a company
established under the applicable laws of United States of America (USA)
for carrying out the business of SACL in USA. SACL by this investment
acquired 75% of the paid up capital of SHUI and hence, it has become a
subsidiary of the Company effective 9th September 2015, by virtue of
the provisions of Section 2(87) of the Act.
Green Infra Wind Energy Theni Ltd (GIWETL)
SACL had earlier invested Rs.3 Cr. (30 lakh shares of Rs.10 each)
representing 21.58% of total share capital of Rs.13.9 Cr. of GIWETL.
The above investment was made by SACL purely to comply with the legal
requirement to draw low cost green energy from 6 MW committed to SACL
by GIWETL. SACL has no operating control and not involved in daily
operation of GIWETL. Hence, both the Company and SACL have not
consolidated the financials of GIWETL.
8. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company are prepared in
accordance with the provisions of Section 129 of the Act, read with the
Companies (Accounts) Rules, 2014 and Regulation 33 of the SEBI (LODR)
Regulations 2015 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 Auditors'' Report form part of the Annual Report.
The audited financial statements of the subsidiary companies will be
made available to the shareholders, on receipt of a request from any
shareholder and it has also been placed on the website of the Company.
This will also be available for inspection by the shareholders at the
registered office during business hours.
The consolidated profit after tax of the Company and its subsidiaries &
associate amounted to Rs. 369.33 Cr for the financial year 2015-16 as
compared to Rs. 328.26 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 14th July 2014, 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 AGM and entitled 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
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 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, all IDs have declared
that they met the criteria of independence as provided under Section
149(6) of the Act.
The detailed terms of appointment of IDs are disclosed on the Company''s
website in the following link http://
Separate meeting of Independent Directors
The IDs were fully kept informed of the Company''s activities in all its
During the year under review, a separate meeting of IDs was held on
12th March 2016 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 also reviewed the performance of Chairman after taking into
account, the views of Executive and Non-Executive Directors.
They also assessed the quality, quantity and timeliness of flow of
information between the Company''s Management and the board that is
necessary for the board to effectively and reasonably perform its
All the Independent Directors were present at the Meeting.
In terms of Section 149 of the Act and Regulation 17 of the SEBI (LODR)
Regulations 2015, the Company is required to have a woman director on
Dr Lakshmi Venu was appointed as non-executive and non-independent
director of the Company in terms of Section 161 read with Section 149
of the Act, effective 10th September 2014. Her appointment was
regularized at the AGM held on 29th July 2015.
Non-executive and non-independent directors (NE- NIDs)
In terms of the provisions of sub-section (6) read with explanation to
Section 152 of the Act, 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 AGM.
Mr H Lakshmanan, director who is liable to retire by rotation at the
AGM, and being eligible, offers himself for re-appointment.
The directors, therefore, recommend his re-appointment as director of
Key Managerial Personnel (KMP)
M/s 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.
Nomination and Remuneration Policy
The Nomination and Remuneration Committee of Directors (NRC) reviews
the composition of the board, to ensure that there is an appropriate
mix of abilities, experience and diversity to serve the interests of
all shareholders and the Company.
In accordance with the requirements under Section 178 of the Act,
Nomination and Remuneration Policy was formulated to govern the terms
of nomination / appointment and remuneration of (i) Directors, (ii) KMP
and (iii) Senior Management Personnel (SMP) of the Company. The same
was approved by the board at its meeting held on 23rd September, 2014.
There is no change in the Policy during the year under review.
The NRC also reviews succession planning of KMP, SMP and board. The
Company''s approach in recent years is to have a greater component of
performance linked remuneration for SMP.
The process of appointing a director / KMP / SMP is, that when a
vacancy arises, or is expected, the NRC will identify, ascertain the
integrity, qualification, appropriate expertise and experience, having
regard to the skills that the candidate will bring to the board /
Company, and the balance of skills added to that of which the existing
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.
NRC will ensure that any appointment of a person as an independent
Director of the Company will be made in accordance with the provisions
of Section 149 read with Schedule IV to the Act along with any other
applicable provisions and SEBI (LODR) Regulations, 2015.
Criteria for performance evaluation, disclosures on the remuneration of
directors, criteria of making payments to non-executive directors have
been disclosed as part of Corporate Governance Report attached
Variation in the terms of remuneration payable to CMD and JMD
The board, on the recommendation of NRC, at its meeting held on 3rd May
2016, reviewed the remuneration payable to CMD after taking into
consideration, the time spent and contribution to the growth of the
Company including his active involvement in all spheres of affairs and
leading the Company''s management in achieving sales and profits and
felt that, CMD can be compensated by way of monthly remuneration and
allied perquisites along with the profit related commission, from the
financial year 2016-17 effective 1st April 2016, within the overall
limits prescribed under Section 197 of the Act.
The board also reviewed the remuneration payable to JMD after taking
into consideration his active involvement in all spheres of management
and exploring business opportunities both in India and abroad and felt
that, JMD can be compensated by way of enhanced profit related
Such modification in the terms of remuneration will amount to variation
of remuneration payable to them within the overall limit permissible
under Sections 197 and 198 read with Schedule V to the Act and placed
before the members for their approval by way of ordinary resolutions in
the ensuing AGM.
NRC has recommended the modifications in the terms of remuneration
payable to both CMD and JMD, to the board subject to approval of the
Evaluation of the board, committees and directors
In terms of Section 134 of the Act and the Corporate Governance
requirements as prescribed under SEBI (LODR) Regulations 2015, the
board reviewed and evaluated its own performance from the perspectives
of Company''s performance, strategy and implementation, risk management
and corporate ethics, based on the evaluation criteria laid down by the
The board discussed and assessed its own composition, size, mix of
skills and experience, its meeting sequence, effectiveness of
discussion, decision making, follow up action, quality of information
and the performance and reporting by the Committees viz., Audit
Committee, NRC, Stakeholders Relationship Committee (SRC) and Corporate
Social Responsibility Committee (CSR).
The board upon evaluation concluded that it is well balanced in terms
of diversity of experience encompassing all the activities of the
Company. The Company endeavours to have a diverse board representing a
range of experience at policy-making levels in business and technology,
and in areas that are relevant to the Company''s global activities.
The board also noted that corporate responsibility, ethics and
compliance are taken seriously, and there is a good balance between the
core values of the Company and the interests of stakeholders. The board
is 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
The performance of individual directors including all Independent
directors is 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 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
Number of board meetings held
The number of board meetings held during the financial year 2015-16 are
provided as part of Corporate Governance Report prepared in terms of
the SEBI (LODR) Regulations 2015.
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 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 all
applicable taxes, out of pocket expenses, travelling and other expenses
as may be mutually agreed between the board and the Auditors.
It is therefore proposed to continue them as statutory auditors for the
fourth year in the first term of five consecutive years, from the
conclusion of this AGM, subject to ratification by the members at the
The Company has obtained necessary certificate under Section 141 of the
Act conveying their eligibility for being statutory auditors of the
Company for the year 2016-17.
The Auditors'' Reports for the financial year 2015-16 does not contain
any qualification, reservation or adverse remarks and the same is
attached with the annual financial statements.
As per Section 204 of the Act and the Companies (Appointment and
Remuneration of Managerial Personnel) Rules 2014, the Company is
required to appoint a Secretarial Auditor for auditing secretarial and
related records of the Company.
As required by Section 204 of the Act, the Secretarial Audit Report for
the year 2015-16 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.
M/s S Krishnamurthy & Co., Company Secretaries, Chennai, was
re-appointed as Secretarial Auditors for carrying out the secretarial
audit for the financial year 2016-17.
As per Section 148 of the Act read with the Companies (Cost Records and
Audit) Rules 2014, as amended, the cost audit records maintained by the
Company in respect of engine parts, etc., manufactured by the Company
specified under Central Excise Tariff Act heading in Table B to Rule 3
of the above Rules, are required to be audited by a Cost Auditor.
In terms of the Companies (Cost Records and Audit) Amendment Rules,
2014, the board, subject to the approval of the Central Government, has
re-appointed Mr A N Raman, Cost Accountant holding certificate of
practice No. 5359 allotted by The Institute of Cost Accountants of
India, as a Cost Auditor for conducting Cost Audit for the financial
The Company has also received necessary certificate under Section 141
of the Act 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 for the financial year 2016-17 and is also required to be ratified
by the members, at the ensuing AGM as per Section 148(3) of the Act.
The Company has been practising the principles of good governance over
the years and lays strong emphasis on transparency, accountability and
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 the Regulation 17 (8) of the SEBI
(LODR) Regulations 2015 pertaining to CEO / CFO certification for the
financial year ended 31st March 2016.
12.POLICY ON VIGIL MECHANISM
The Company has adopted a Policy on Vigil Mechanism in accordance with
the provisions of the Act and Regulation 22 of SEBI (LODR) Regulations
2015, which provides a formal mechanism for all directors, employees
and other stakeholders of the Company to report to the management,
their genuine concerns or grievances about unethical behaviour, actual
or suspected fraud and any violation of the Company''s Code of conduct
or ethics policy.
The policy also provides a direct access to the Chairperson of the
Audit Committee to make protective disclosures to the management about
grievances or violation of the Company''s Code of conduct.
The policy is disclosed on the Company''s website in the following link
The Company has not accepted any deposit from the public within the
meaning of Chapter V of the Act, for the year ended 31st March 2016.
Information on conservation of energy, technology absorption, foreign
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
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.
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 read with the Companies (Accounts) Rules 2014.
Details of employees receiving the remuneration in excess of the limits
prescribed under Section 197 of the Act 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, 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 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 read
with the Companies (Meetings of Board and its Powers) Rules, 2014, for
the financial year 2015-16 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.
Please refer note No. X to Notes on accounts for the financial year
2015-16, for details of investments made by the Company.
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.
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 good
work done by all the employees of the Company during the year under
The directors also thank the investors for their continued faith in the
For and on behalf of the Board
Bengaluru VENU SRINIVASAN
3rd May 2016 Chairman