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)
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
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
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
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.
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
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
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
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
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
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,
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
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 has not accepted any deposit from the public within the
meaning of Section 58A of the Act, during the year ended 31st March
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.
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
The directors also thank the investors for their continued faith in the
For and on behalf of the Board
Bengaluru VENU SRINIVASAN
May 24, 2012 Chairman