TVS Motor Company Directors Report, TVS Motor Reports by Directors
TVS Motor Company
BSE: 532343|NSE: TVSMOTOR|ISIN: INE494B01023|SECTOR: Auto - 2 & 3 Wheelers
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Download Annual Report PDF Format 2014 | 2013 | 2012 | 2011
Directors Report Year End : Mar '14    « Mar 13
The directors have pleasure in presenting the twenty-second annual
 report and the audited accounts for the year ended 31st March 2014.
 Despite a challenging macroeconomic environment and intense
 competitive landscape, the Company sold 19.9 lakh two wheelers in line
 with last year. Motorcycle sales increased by 4% and scooters by 6%.
 Moped sales marginally declined mainly due to poor monsoon and decline
 of two wheeler sales in Tamilnadu. Three-wheeler sales of the Company
 increased by 63% in 2013-14. Sale of spare parts grew by 18%.
 TVS Jupiter, the newly launched scooter bagged seven awards acclaiming
 its superiority over competitive products.
 The Company''s total revenue including other income increased to
 Rs.7,992.06 Cr in the current year from Rs.7,193.09 Cr in the previous
 year. Profit before tax and exceptional items (PBT) for the year
 2013-14 significantly increased to Rs.351.26 Cr compared to Rs.254.42
 Cr of the previous year. Similarly Profit after tax (PAT) for the year
 2013-14 increased to Rs.261.63 Cr from Rs.116.02 Cr of the previous
 year, after taking into account the extra-ordinary and exceptional
                                           Year ended        Year ended 
 Details                                   31-03-2014        31-03-2013
 Quantitative                                    (Numbers in lakhs)
 Motorcycles                                     7.86              7.56
 Mopeds                                          7.33              7.93
 Scooters                                        4.74              4.46
 Three Wheelers                                  0.80              0.49
 Total vehicles sold                            20.73             20.44
 Financials                                       (Rupees in crores)
 Motorcycles                                  3061.41           2794.98
 Mopeds                                       1470.23           1547.07
 Scooters                                     1609.77           1441.54
 Spares & Accessories and
 Raw Materials                                 947.34            845.95
 Three Wheelers                                768.95            440.11
 Other Operating Income                        104.15             99.60
 Other Income                                   30.21             23.84
 Sales (Net of Excise duty) &
 other income                                 7992.06           7193.09
                                                  (Rupees in crores)
 EBITDA                                        531.95            460.62
 Finance charges &
 Interest (Gross)                               25.40             48.04
 Amortisation                                   23.64             27.75
 Depreciation                                  131.65            130.41 
 Profit before tax and
 exceptional items                             351.26            254.42
 Exceptional items                              (2.81)           (91.63) 
 Profit before tax after
 exceptional items                             348.45            162.79
 Extraordinary item                              4.09              0.79
 Profit before tax after
 extraordinary item                            352.54            163.58
 Provision for tax                              90.91             47.56
 Profit for the year after tax                 261.63            116.02
 Balance in Statement of Profit 
 & Loss                                        323.81            284.90
 Profit available for 
 appropriation                                 585.44            400.92 
 Dividend and Dividend
 Distribution Tax                               77.52             65.51
 Transfer to General Reserve                    26.16             11.60
 Surplus carried forward                       481.76            323.81
                                               585.44            400.92
 The board of directors (the board) at their meeting held on 25th
 October 2013, declared a first interim dividend of Re.0.65 per share
 (65%) for the year 2013-14 absorbing a sum of Rs.36.13 Cr including
 dividend distribution tax. The same was paid to the shareholders on 5th
 November 2013.
 The board at its meeting held on 29th April 2014 declared a second
 interim dividend of Re.0.75 per share (75%) for the year 2013-14
 absorbing a sum of Rs.41.19 Cr including dividend distribution tax. The
 same will be paid to the shareholders on or after 9th May 2014. Hence,
 the total amount of dividend including the second interim dividend
 payable, for the year ended 31st March 2014 will aggregate to Rs.1.40
 per share (140%) on 47,50,87,114 equity shares of Re.1/- each.
 The board does not recommend any further dividend for the year under
 Two wheeler industry continued to grow below the long term trend. The
 industry recovered marginally to 7% in 2013-14 from a low growth of 2%
 in 2012-13.
 Macro economic environment continued to remain weak.  Depressed
 economic sentiments coupled with high price levels and poor income
 growth continued to affect the industry.
 Industry sales of two wheelers (Domestic plus Export)
 Motorcycles continued with the low growth phase of last year and grew
 at 4% (124.6 lakh numbers) from a low of 0.1% (119.5 lakh numbers) in
 2012-13. Propelled by new launches and favourable customer preferences,
 growth in scooters was high at 23% (36.9 lakh numbers) from 14% (30.14
 lakh numbers). Scooters as a category continued to gain share from
 motorcycles in the total two wheeler industry.  Mopeds declined by 8%
 over last year.
 Industry sales of three wheelers (Domestic plus Export)
 The petrol passenger three wheeler industry (3 plus 1 segment)
 increased by 5% during 2013-14 to 4.55 lakh units.  This was mainly due
 to 17% increase in exports (from 3.00 lakhs in 2012-13 to 3.51 lakhs in
 2013-14). Domestic sales declined by 23% (from 1.35 lakhs in 2012-13 to
 1.04 lakhs in 2013-14) as new permits were not released by the State
 Low growth of GDP is expected to continue. Uncertain monsoon is an
 added concern. Inflation and consumer sentiments do not induce great
 confidence either. Added to this, geo-political uncertainty in parts of
 Asia and Europe may affect commodity prices. Consequently the Company
 expects modest growth for the two wheeler industry during the year
 New Product Launches and Initiatives:
 During the year 2013-14, the following new products and variants were
 TVS Sport:
 TVS Sport that stands for style and mileage was introduced in a new
 colour called Indigo Streak. In November 2013, Econometer was
 introduced in TVS Sport, which gave the rider extra control for fuel
 efficient riding. TVS Sport is the first motorcycle to have it in the
 100cc category.
 TVS Phoenix 125:
 TVS Phoenix was introduced in a stunning new Dual Tone Alpine White
 Color with Stylish Graphics. The new colour of TVS Phoenix is
 complemented by fully digital speedometer, backlit in premium amber, a
 digital fuel gauge, low battery reminder, trip meter, service reminder,
 soft touch grips and soft touch switch gears. Features like aircraft
 inspired decals, roto petal disc brakes, LED pilot lamp, all black
 engine, alloy wheels and stitched dual texture high density comfort
 cushion seat with premium upholstery increase the style quotient of the
 TVS Apache:
 In October 2013, TVS Apache RTR 160 that stands for high performance
 was redesigned to race in five new monotone colours - White, Red,
 Yellow, Black and Titanium- Grey. Racing Stripes running over pure bled
 colors make this full bodied track prodigy look more Athletic and
 Aerodynamic. Its linear and minimalistic design defines the hard
 angles, sculpted lines and muscular build.
 TVS Jupiter:
 TVS Jupiter was launched in September 2013 with next generation 110cc
 CVT-i Engine, best-in-class mileage and many class-leading features.
 With TVS Jupiter, riding comfort of scooters enters a new dimension.
 This innovative mobility embodies a combination of class-leading
 features and style unprecedented in the two-wheeler segment. Its
 superior vehicle design and ergonomics make it a scooter which gives
 you ''more'' in every aspect. TVS Jupiter comes with 15 class- leading
 features, 5 out of these are unique to TVS. It is a reliable,
 contemporary looking scooter with a masculine form highlighted by
 stylish body panels. With the launch of TVS Jupiter, the Company marked
 its entry into the male segment.  And now the Company can leverage a
 complete scooter portfolio. TVS Jupiter became the most awarded scooter
 ever with 7 awards viz., Viewers Choice Two Wheeler of the Year &
 Scooter of the Year by NDTV Car and Bike, Scooter of the Year by Bike
 India, Top Gear, DNA and Motoring.
 Two wheeler operations: Domestic
 Category shift from motorcycles to scooters continued in 2013-14 also,
 bringing more male buyers into the category.  The shift in the scooter
 consumer preferences towards bigger scooters resulted in drop of TVS
 Scooty sales. Launch of TVS Jupiter has addressed this issue. Overall
 sales of scooters in the domestic market increased by 6%.
 Motorcycle sales marginally increased during the year. The scenario is
 expected to improve further in 2014-15 due to launch of new StaR City .
 The Company''s products are distributed through network of authorized
 dealers across India. The Company has strong distribution network in
 the 2W industry and it continuously seeks to increase its distribution
 The Company''s two wheeler exports increased by 14% in 2013-14 due to
 demand expansion, better product mix and improvement in distribution
 network in some major export markets.
 Tie-up with BMW Motorrad
 The Company entered into a long-term ''co-operation agreement'' with BMW
 Motorrad. This agreement inter alia is to source technological know-how
 for jointly developing and producing high-end motorcycles, that will
 cater to the segment below 500 cc. Program of the project is on
 Three wheeler operations
 Sale of three wheelers grew by 63%. The Company will consolidate the
 gains during 2014-15. Three Wheeler diesel version was test marketed
 during 2013-14. The results are satisfactory and will be rolled out
 during 2014-15.
 Opportunities and Threats
 Even though Indian economy has been experiencing a slow growth phase,
 the long term prospects for 2W industry continue to be attractive.
 A slew of new launches of motorcycles and scooters in 2014-15 are
 expected to further strengthen the presence of the Company in
 motorcycles category and consolidate its position in scooter category.
 Revival of economic reforms and good monsoon are essential for recovery
 in economic growth and improved consumer sentiment. The success of
 planned launches in the motorcycle and scooter category and
 consolidation of Jupiter achieving steady state sales are important to
 maintain the momentum for the Company.
 Total Quality Management (TQM)
 In continuation of the TQM journey so far, the Company continues to
 spread this message across the organization.  In line with continuous
 improvement, more than 150 employees have been certified for TQM
 problem solving process. This helped to complete 310 projects during
 the last year.
 During 2013-14, while Total Employee Involvement (TEI) was at 100%,
 more than 1,450 projects were implemented across Quality, Cost and
 Delivery by Quality Control Circle teams.  Quality of suggestions
 improved by 25% over the last year and overall implemented suggestions
 stood at 60 per employee. These achievements were recognized by INSSAN
 (Indian National Suggestion Scheme Association) and awarded Excellence
 in Suggestion Scheme at national level in this segment.
 Cost Management
 Total cost management is a continuous journey and the Company manages
 the same through deployment of costs to users. The Company will
 continue to pursue value engineering and alternate sourcing to reduce
 material costs during this year.
 Research and Development
 The Company''s strong Research and Development (R&D) team is
 continuously working towards design and development of exciting new
 products for our customers. Aided by modern CAD / CAE resources and
 state-of-art facilities for engine and vehicle design, development and
 testing, Noise, Vibration and Harshness (NVH) measurements, R&D
 constantly develops new and innovative features. R&D team is also
 working on the development of fuel-efficient and environment friendly
 technologies. The Company also collaborates with leading research
 laboratories and educational institutions for developing future
 In 2013-14, the R&D team delivered a new Scooter ''TVS Jupiter'' with
 stunning style, class leading mileage and many first in class features.
 TVS Jupiter has become the ''Most Awarded'' scooter, recognised as class
 leading by all major auto magazines. Further, the R&D team has
 successfully delivered a motorcycle specifically tailored for African
 The R&D team has so far published 86 technical papers in national and
 international conferences.
 Information Technology
 The Company has been using ERP for integrating its various business
 processes within the Company and its business partners. The Company
 continued to implement several projects in supply chain to improve its
 efficiency and transparency. Data acquisition systems have been
 provided in the shop floor to improve overall equipment effectiveness.
 A digital framework for measuring customer satisfaction and related
 actions to improve the customer satisfaction have been implemented.
 As part of continuous improvement and to enhance information security,
 periodical audits are conducted by experts and control measures are
 taken. During the year, the Company enhanced the scope of ISO
 27001:2005 certification and got it re-certified. Business continuity
 plan for major business critical applications has been implemented.
 The Company has a proper and adequate internal control system to ensure
 that all the assets of the Company are safeguarded and protected
 against any loss and that all the transactions are properly authorized
 and recorded.  Information provided to management is reliable and
 timely and statutory obligations are adhered to.
 Occupational Health & Safety (OHS)
 The Company has won the First prize in State Safety Awards for
 longest accident free period from the Government of Tamil Nadu. The
 Company also obtained re-certification for continual improvement in
 Occupation Health Safety System through implementation of
 OHSAS18001:2007 standard.
 Apart from ''on the job'' safety, ''off the job'' safety was also focused
 regularly through various road safety campaigns and education.
 Human resource development framework has its constituents as Employee
 engagement, Resourcing, Performance & Compensation management,
 Competency based development, Career & succession planning and
 Organisation building. Each of these constituents has a structured
 approach and processes to deliver consistent results.
 Leadership development continues to be one of the key initiatives of
 the Company. Through a structured talent review process, leadership
 development to identified talents through job rotation, challenging
 project assignments and exposure to globally acclaimed programs are
 taken up on a regular basis.
 The Company continues to maintain its record of good industrial
 relations without any interruption in work. As on 31st March 2014, the
 Company had 4,684 employees on its rolls.
 The Board at its meeting held on 25th October 2013, constituted a
 Corporate Social Responsibility Committee with Mr Venu Srinivasan as
 the Chairman of the Committee, Mr Prince Asirvatham and Mr H Lakshmanan
 as members.
 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
 SST over 18 years of service, 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 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. Its significant achievements are:
 - Through partnership with the community, over 5,300 Self Help Groups
 (SHG) were formed.
 - 100% enrolment in schools, 0% drop-outs, 93% students pursue higher
 studies and over 60,145 adult women were made literate.
 - Illiteracy amongst women reduced from 47% to 12%.
 - 1,75,205 hectares under afforestation.
 - 12,938 hectares covered for soil and water conservation.
 - Proper solid and liquid waste management practices adopted in 1,418
 - SHG members have a group saving of Rs.25.57 Cr.
 - Over 1,47,136 of the families living in these villages have a monthly
 income of around Rs.15,000/- per family.
 - 1,296 villages have access to safe drinking water.
 - Enriching 2,501 villages across 5 states. Creating the most effective
 synergies for socio-economic development in India.
 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
 The following are the subsidiaries of the Company:
 1.  Sundaram Auto Components Limited
 2.  TVS Housing Limited
 3.  TVS Motor Company (Europe) B.V.
 4.  TVS Motor (Singapore) Pte. Limited
 5.  PT. TVS Motor Company Indonesia
 6.  Sundaram Business Development Consulting (Shanghai) Company Limited
 The Company has disinvested 7,35,00,000 equity shares of Rs.10/- each
 of TVS Energy Limited (TVS Energy), constituting 90.46% of paid up
 capital in TVS Energy to and in favour of Green Infra Limited (GIL),
 New Delhi.
 Consequently, TVS Energy and its two subsidiaries, namely TVS Wind
 Energy Limited and TVS Wind Power Limited, ceased to be subsidiaries of
 the Company, effective at the close of business hours of 16th August
 The Company continues to hold the required percentage of equity shares
 of Green Infra BTV Limited (name changed from TVS Energy Limited) for
 the purpose of fulfilling the norms of captive consumption.
 PT.TVS Motor Company Indonesia (PT TVS)
 During 2013-14, PT TVS sold 19,200 vehicles registering a growth of 3%
 as against 18,600 vehicles sold last year.  While its domestic sales
 grew by 12%, the exports were lower by 3%. During the year, PT TVS
 exported 10,300 two wheelers.
 The Indonesian motorcycle industry grew by 9% during the year. While
 bebek category continued to decline by 11%, the Skubek category which
 offers greater convenience and imagery over the bebeks, continued its
 growth at 12% and now accounts for 63% of the total two wheeler market.
 During the year, PT TVS launched its first skubek model TVS Dazz which
 was well received in the market and has sold more than 5,000 vehicles
 so far.
 During the year, PT TVS plans to launch a new 125cc sports motorcycle
 and a new 125cc superior Skubek which will further enhance the image of
 PT TVS. The launch of Skubek ensured PT TVS has complete range of two
 wheelers and will increase the dealer network and improve tie up with
 retail finance companies.
 PT TVS continued its focus on exports and exported more than 10,000
 units. During the year under review, PT TVS successfully made an entry
 into Myanmar market and plans to expand its presence in new markets
 like Laos, Cambodia, Malaysia and Turkey in the current year apart from
 improving its presence in the existing markets.
 TVS Motor Company (Europe) B.V (TVSM Europe)
 TVSM Europe has assigned all the assets and liabilities to an another
 wholly owned subsidiary of the Company viz., TVS Motor (Singapore) Pte
 Limited on 31st March 2014 as a part of closure of its operations.
 Accordingly a provision for diminution in the value of investment of
 Rs.33.09 Cr (last year Rs.91.63 Cr) has also been provided for in the
 books of the Company for winding up TVSM Europe.
 Sundaram Auto Components Limited (SACL)
 During the year, SACL achieved a turnover of Rs.292 Cr in Plastics
 component business. SACL earned a profit after tax of Rs.10.71 Cr
 during the year 2013-14.
 Focused improvement in energy saving and material productivity resulted
 in improvement in contribution compared to previous year. During the
 year, SACL also produced 78 new parts for various customers.
 SACL was awarded the Best Supplier Kaizen award by L&T for the year
 2013-14. During the year, SACL increased its customer base with new
 business for producing air bag covers, fuel filters and other interior
 parts for four wheelers.
 SACL declared an interim dividend of Rs.2.50 per share (25%) of face
 value of Rs.10/- each for the year ended 31st March 2014.
 Investment in subsidiaries
 During the year under review, the Company has made an additional
 investment of Rs.49.82 Cr in Class B shares viz., non-cumulative,
 non-convertible and redeemable preference shares of PT TVS. The Company
 has also made investment of Rs.0.44 Cr in equity capital of Sundaram
 Business Development Consulting (Shanghai) Company Limited.
 As required under the Listing Agreement with the Stock Exchanges, the
 consolidated financial statements of the Company are attached.
 The Ministry of Corporate Affairs (MCA) vide its circular No. 2 in file
 No. 51/12/2007-CL-III dated 8th February 2011 has granted general
 exemption from attaching annual reports of subsidiaries along with the
 annual report of the holding companies without seeking any approval of
 the Central Government, subject to the conditions laid down therein.
 The board of directors, at their meeting held on 29th April 2014,
 passed necessary resolution confirming compliance with all the
 conditions enabling the circulation of annual report of the Company
 without attaching all the documents, referred to in Section 212(1) of
 the Companies Act, 1956, 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 stakeholders, on receipt of a
 request from them, at the registered office of the Company during the
 business hours on any working day of the Company. If any member or
 investor wishes to inspect the same, it will be available during the
 business hours of any working day of the Company.
 A statement giving the following information in aggregate of each
 subsidiary including its 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 and (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 also attached.
 Mr K S Bajpai has been serving on the board since January 2003. During
 his tenure of office, he has made distinct and immense contribution to
 the deliberations of the meetings of the board in general and for the
 growth of the Company in particular.
 He is liable to retire by rotation in the AGM and is due for
 re-appointment, in terms of the erstwhile provisions of the Companies
 Act, 1956.
 He has expressed his desire not to offer himself for appointment, owing
 to his health conditions. The board does not propose to fill the
 vacancy arising from the retirement of Mr K S Bajpai.
 The board does hereby record its deep sense of appreciation for the
 valuable services rendered by him during his tenure.
 During the year, the Ministry of Corporate Affairs (MCA) has notified
 majority of the provisions inter alia provisions relating to selection,
 manner of appointment, roles, functions, duties, re-appointment of
 independent directors (IDs) and the relevant rules under the Companies
 Act, 2013 (the Act 2013) and made them effective 1st April 2014.
 The existing composition of the Company''s board is fully in conformity
 with the applicable provisions of the Act 2013 and Clause 49 of the
 Listing Agreement having the following directors as non-executive IDs,
 namely M/s T Kannan, C R Dua, Prince Asirvatham and Hemant Krishan
 The board also recommends the appointment of Mr R Ramakrishnan, who has
 been associated with the Company since 2009, as independent director of
 the Company, since he meets the criteria of independence, in terms of
 the requirements of relevant provisions under the Act 2013. On
 appointment as independent director by the shareholders of the Company,
 he will cease to be a non- independent director of the Company.
 In terms of the provisions of Section 149(10) read with Section 149(5)
 of the Act 2013, IDs are eligible to hold office for a term up to five
 consecutive years on the board and eligible for re-appointment for the
 second term on passing special resolutions by the Company. During the
 period, they will not be liable to ''retire by rotation'' as per the
 provisions of Sections 150(2), 152(2) read with Schedule IV to the Act
 It is, therefore, proposed to appoint them as IDs for a consecutive
 period of five years at the AGM. Necessary declarations have been
 obtained from them, as envisaged under the Act 2013.
 Both the Nomination and Remuneration Committee and the board also
 ensured that their appointments as IDs are in compliance with the
 requirements under the relevant statutes and that there were
 appropriate balance of skills, experience and knowledge in the board,
 so as to enable the board to discharge its functions and duties
 Notices in writing signifying the intention to offer their candidatures
 as IDs of the Company along with the requisite deposit have been
 received from members of the Company in terms of Section 160 of the Act
 In terms of the provisions of sub-section (6) read with explanation to
 Section 152 of the Act 2013, two-third of the total number of directors
 i.e., excluding IDs, are liable to retire by rotation and out of which,
 one-third is liable to retire by rotation at every annual general
 Mr H Lakshmanan, director of the Company, is, therefore, liable to
 retire by rotation, at the ensuing AGM, and being eligible, offers
 himself for re-appointment.
 The brief resume of these directors proposed to be appointed and
 re-appointed and other relevant information have been furnished in the
 Notice convening the AGM. Appropriate resolutions for their appointment
 / re-appointment are being placed for approval of the members at the
 The board, therefore, recommends their appointment / re-appointment as
 directors of the Company.
 Statutory Auditors
 The Company, in terms of Section 139 (1) and (2) of the Act 2013, is
 required to appoint statutory auditors for a term of five consecutive
 years i.e., till the conclusion of sixth annual general meeting and
 ratify their appointment, during the period, in every annual general
 meeting by an ordinary resolution.
 The period for which any firm has held office as auditor prior to the
 commencement of the Act 2013 will be taken into account for calculating
 the period of five consecutive years, as per the fourth proviso to
 Section 139(2) of the Act 2013 read with Rule 6(3) of the Companies
 (Audit and Auditors) Rules, 2014.
 M/s. V. Sankar Aiyar & Co., Chartered Accountants, Mumbai, who were
 earlier appointed as statutory auditors of the Company, at the annual
 general meeting held on 19th July 2013, are eligible to be appointed
 for the remaining period of four years out of the first term of five
 consecutive years in terms of the Act 2013.
 The Company has obtained necessary certificate under Section 141of the
 Act 2013 from the auditor conveying their eligibility for the above
 appointment. The audit committee and board reviewed their eligibility
 criteria, as laid down under Section 141 of the Act 2013 and
 recommended their appointment as auditors for the aforesaid period.
 Cost Auditor
 As required under the Companies (Cost Accounting Records) Rules 2011,
 the Company filed the Cost Audit Report along with Cost Compliance
 Report for the financial year 2012-13 in XBRL format.
 The board subject to the approval of the Central Government, has
 re-appointed Mr A N Raman, practising cost accountant, holding
 Membership No.5359, allotted by The Institute of Cost Accountants of
 India, as Cost Auditor for conducting the Cost Audit for the financial
 year 2014-15. The audit committee recommended his appointment and
 remuneration subject to the compliance of all the requirements as
 stipulated in circular no.15/2011 dated 11th April 2011 issued by the
 The Company has also received necessary certificate under Section 141
 of the Act 2013 conveying his eligibility for re-appointment. The
 remuneration fixed by the board, based on the recommendation of the
 audit committee is required to be ratified by the members at the AGM as
 per the requirement of Section 148(3) of the Act 2013.
 Secretarial 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 the
 secretarial and related records of the Company and to provide a report
 in this regard.
 Accordingly, M/s S Krishnamurthy & Co., Company Secretaries, Chennai
 have been appointed as Secretarial Auditors for carrying out the
 secretarial audit for the financial year 2014-15 for attaching their
 report with the Board''s report to the shareholders.
 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
 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 Clause 49 (V) of the
 Listing Agreement pertaining to CEO/CFO certification for the financial
 year ended 31st March 2014.
 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 2014.
 Directors'' Responsibility Statement
 In accordance with the provisions of Section 217(2AA) of the Act, with
 respect to Directors'' Responsibility Statement, it is hereby stated -
 i. that in the preparation of annual accounts for the financial year
 ended 31st March 2014, 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 2014 on a going concern basis.
 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
                                        For and on behalf of the Board
 Bengaluru                                             VENU SRINIVASAN
 29th April 2014                                              Chairman
Source : Dion Global Solutions Limited
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