TVS Motor Company Ltd Directors Report.


The Directors have pleasure in presenting the twenty eighth annual report and the audited accounts of the Company for the year ended 31st March 2020.


The Company registered sales of 30.9 lakh units of two wheelers in 2019-20. The 2W industry declined by 14.4% majorly impacted by on-road price increase in domestic market due to increase in motor vehicle insurance, mandatory safety norms and tepid demand due to lower GDP growth estimated at 4.7%.

Companys performance was better than the industry with 11% decline in the first half of the FY 2019-20. In the second half, the Company transitioned into BS-VI emission norms, well ahead of the competition and successfully positioned entire portfolio with BS-VI product line up by January, 2020 (3 months before deadline). Exports of two-wheeler in 2019-20 were at 6.79 lakh units with a growth of 9.2% over 2018-19. Three-wheeler sales grew by 11% in 2019-20 mainly on account of good acceptance of the product from the international customer base. Sales revenue of spare parts grew by 6%.

The Company forayed in the electric vehicle space with the launch of its first electric Scooter, TVS iQUBE. The product came with 58 exciting features, with many Industry-first elements like Geo-fencing, Ride Statistics, Telematics, Remote Charge Status and Navigation Assist, all brought together to give the customer an overwhelming connected experience. In the existing product categories, new launches like TVS NTORQ 125 racing edition, TVS Jupiter Grande "SmartXonnect" and TVS XL100 Comfort "i-TouchStart" further enhanced its positioning as a company with focus on innovative technology and passion for customers.

With continued efforts towards customer satisfaction and focus on quality, the Company secured leadership position in JD Powers Two-wheeler Customer Service Index (2W CSI) survey for consecutive years since 2016. During the year 2019-20, Companys products bagged 15 awards, of which the premium brands like TVS NTORQ 125 and TVS Apache won the most.

Towards the end of 2019-20 starting 23rd March, the Companys operations were halted due to the CoVID-19 pandemic. A nationwide lockdown was announced to contain the spread of the virus. Understanding the severity of the crisis, the Company took lot of measures to help and support its customers, employees, dealers, suppliers, and society. The Company also set-up a Business Continuity Task Force and pro-actively rolled-out a slew of measures to ensure health & safety of its employees, suppliers and dealers. Work from home was implemented for almost all executives & managers well on time. Some of the key initiatives undertaken by the Company to support the society in fighting this battle include providing 1 Million protective face masks, sanitization of numerous villages and towns, providing food packets to essential service providers and to the deprived sections of the society.

The Company has spent $ 32.33 Cr towards CoVID-19 relief measures, which includes contribution to Prime Ministers dedicated National Fund "PM CARES" and Tamil Nadu Chief Ministers Public Relief Fund.

Total revenue of the Company including other income was Rs.16,455.44 Cr in the current year as against Rs.18,217.46 Cr in the previous year. Profit before tax (PBT) was Rs.754.41 Cr in the current year (after exceptional item of Rs.32.33 Cr) as against Rs.960.96 Cr in the previous year. Similarly, Profit after tax (PAT) was Rs.592.25 Cr in the current year as against Rs.670.14 Cr in 2018-19.


Details Year ended 31-03-2020 Year ended 31-03-2019
Quantitative (Numbers in lakhs)
Motorcycles 13.63 15.59
Mopeds 6.51 8.97
Scooters 10.75 13.01
Three Wheelers 1.74 1.56
Total vehicles sold 32.63 39.13
Financials (Rupees in Crores)
Revenue from operations 16073.63 17912.51
Other Operating Income 349.71 297.41
Other Income 32.10 7.54
Revenue 16455.44 18217.46
EBITDA 1377.96 1440.79
Finance Charges & Interest (Gross) 102.19 80.56
Depreciation 489.03 399.27
Profit before tax 786.74 960.96
Less: Exceptional Item 32.33
Profit before tax after exceptional Item 754.41 960.96
Provision for Tax 162.16 290.82
Profit after tax 592.25 670.14


The Board of Directors of the Company (the Board) at their meeting held on 4th February 2020, declared a first interim dividend of Rs.2.10 per share (210%) for the year 2019-20

The Board at its meeting held on 10th March 2020 declared a second interim dividend of Rs.1.40 per share (140%) for the year 2019-20 absorbing a sum of Rs.79.75 Cr including dividend distribution tax. The same was paid on 20th March 2020. Thus, the total amount of both dividends for the year ended 31st March 2020 aggregated to Rs.3.50 per share (350%) on 47,50,87,114 equity shares of Rs.1/- each absorbing

$ 200.03 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 Companys subsidiary on its dividend declared to the extent available. The Board does not recommend any further dividend for the year under consideration.




2019-20 marked the successful transition to BS-VI for the Indian 2-wheeler industry. A global first of leapfrogging from Stage IV - Stage VI emission norms in 3 years. However, the domestic two-wheeler industry recorded a sale of 17.4 Mn units in 2019-20, a decline of 17.7% from 21.2 Mn units of 2018-19. 16% was the decline in the first half of the year on back of weakening consumer sentiment, falling GDP growth forecasts and increased 2W prices due to insurance cost increases and mandatory safety regulations. The decline further intensified in second half to 20%, owing to BS-VI transition, wherein 2W prices further went up by an average of 15%. The year ended with start of the single minded struggle against CoVID-19 pandemic.

The scooter category declining 16.7%, with 5.6 Mn Units in 2019-20 over 6.7 Mn Units in 2018-19. The category share increased marginally to 32% in 2019-20 from 31.6% in 2018-19.

The motorcycle category also declined by 17% over last year. The category share for motorcycle settled at 64.4%. Within motorcycles, the premium segment with a category share of 9.3%, declined by 25% from 2.15 Mn units in 2018-19 to 1.61 Mn units in 2019-20. The commuter segment category share however moved to 50% while volumes declined by 16% to 8.7 Mn units in 2019-20 from 10.4 Mn units in 2018-19.

In the international market, two-wheeler industry had a growth of 7% over last year. Stable price of crude oil and continued growth in Africa propelled the growth of exports.


Overall three-wheeler small passenger industry (3 plus 1 segment) declined by 12% in 2019-20 (from 8.45 lakh units in 2018-19 to 7.45 lakh units in 2019-20). Domestic industry declined by 14% and exports market declined by 11% in 2019-20 over last year.


Indias GDP growth has decelerated to 11 year low estimated at 4.7% in 2019-20. In 2020-21, the economy will see significant challenges owing to the impact of CoVID-19 pandemic and the resultant interruption to economic activity which is beginning to reopen.

Economic activity and lifestyles will be rebuilt, factoring in coexistence with CoVID-19. Social Distancing (SD) and Work From Home (WFH) practices will see greater prevalence. These new long-term practices of SD could see consumer preferences change towards personal mobility, which could prove to provide some opportunity, especially to the 2-wheeler industry. The Company is cognizant of this opportunity, and well poised to leverage this opportunity with its superior BS-VI offerings across the widest range of personal mobility needs. The restriction on public mobility and impact on many sectors of the economy will affect GDP, disposable incomes, consumer sentiment and the auto industry as well. Consequently, a very sharp decline in the first quarter of 2020-21 is expected, which may partially alleviate in the following quarter, with any upside possibilities only playing out in the later part of the year. BS-VI Two wheelers offer consumers affordable, safe and eco friendly personal transport and may see less impact due to the need for such solutions. The favorable reservoir levels, good rabi output and possibility of normal monsoon may support agriculture growth. It is to be noted that much of the sale of two wheelers are in semi urban and rural areas which could see some benefit of this. As pandemic CoVID-19 is affecting most countries across the globe, export of two-wheeler is likely to see a decline during initial part of the year. A sustained trend of low crude prices may also impact export market growth in oil dependent economies of Africa. However, the economic impact of CoVID-19 is expected to be more pronounced in the markets of LATAM, whereas the African countries seem to be lesser impacted, and the core demand may return sooner.

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 over 72,000 units of BMW 310cc motorcycle till date.

Norton Acquisition

The Company acquired Norton Motorcycles, in an all-cash transaction for a consideration of GBP 16 Mn through one of the Companys overseas subsidiaries. The "Norton", "Commando", "Dominator" and the more recent "V4RR" are part of the portfolio of this historic motorcycle Company. The first of many Isle of Man wins dates as far back as 1908. An integral part of British popular culture, identity and history, it has a loyal following across Europe.

This acquisition enhances the Companys global portfolio bringing in complementary product segments, markets and capabilities. The Company also believes that Norton Motorcycles can leverage its additional geographical network reach and global supply chain capabilities to expand to new markets and audiences with existing and upcoming products.

New Product Launches and Initiatives

During the year 2019-20, the following new products and variants were launched.

TVS Jupiter Grande:

TVS Jupiter has become a strong household brand in the last 6 years since inception, with more than 3.5 Mn happy customers by FY 2019-20. Continuing the journey of providing "Zyada ka Fayda", TVS Jupiter Grande SmartXonnect was launched during festival season (October 2018) making it the first Bluetooth enabled scooter in the 110cc segment. Apart from having a differentiated visual appeal, TVS Jupiter Grande SmartXonnect is loaded with practical, useful features such as, call & message notifications, high speed alert, helmet reminder, trip data and many more.

The brand communication campaign named, Dil Ka Mileage went on to bag the prestigious Marketing Campaign of the Year Award at the Global Awards for Retail Excellence event by ET NOW.

TVS Jupiter Classic BS-VI was the first BS-VI offering by the Company launched in November 2019.

TVS Apache:

TVS Apache Series crossed 3.8 Mn global customers milestone in March 2020. Through the years, TVS Apache has stood for providing an unrivalled experience backed by its rich 38 years of TVS Racing pedigree, technological prowess and stylish design. Over the last 14 years, the brand has developed a host of premium offerings, ranging from 160cc to 310cc, creating aspiration along every step of evolution. TVS Apache Series has multiple customer experience properties like AOG (Apache Owners Group), ARE (Apache Racing Experience), APP (Apache Pro Performance), TVS Racing Training School & One Make Championship, all of which bring the Apache owners together to celebrate the spirit of Racing.

The 1st edition of TVS Racing MotoSoul Days, the biggest bike festival for TVS, was organized in October 2019 in Goa that saw a strong participation of 1000+ motorcycle enthusiasts. It was also a stage for the launch of TVS Racing Performance Gears, a range of high performance and quality riding gears, helmets and merchandize for TVS Apache Customers.

The end of the financial year 2019-20 saw the launch of the TVS Apache RR310 BS-VI with many first in segment features making it one of the most technology-rich motorcycles in its class. The motorcycle continues to resonate with lots of enthusiasts, thus increasing its loyalists exponentially across the globe.

In the transition to BS-VI, the TVS Apache Series has received a major update that includes a style refresh and an addition of many first in segment features. The entire series is now powered by RT-Fi (Race Tuned Fuel Injection) technology which ensures delivery of best race performance at all driving conditions. The 4V Series comes with a best in class LED headlamp while the RTR 200 4V also boasts of the TVS SmartXonnect. One of the most loved features of the RTRs - the signature exhaust note has gotten racier and more refined. TVS Apache RR310 has seen the biggest upgrade with a multitude of best in class features - new Titanium Black dual tone graphics scheme, Throttle by wire technology, customizable 5" TFT cluster, TVS SmartXonnect with advanced ride analysis and 4 ride modes of Track, Sport, Urban, and Rain (first in segment). The entire series also features the introduction of first in segment Glide Through Technology (GTT) which allows the rider to easily navigate through traffic thus reducing rider fatigue.

TVS Radeon:

A unique blend of sturdy build, robust style and plush comfort, TVS Radeon is targeted at the discerning progressive Millennials of Middle India. TVS Radeon has upped the choice for everyday commuters and is successfully creating lot of excitement & delight amongst its consumers. Over 2 lakh proud consumers overjoyed with their Buland choice.

TVS Radeon has received many accolades and became one the most awarded commuter motorcycles in its early days itself. The Commuter of the Year Celebratory Special Edition stays true to the TVS Radeon Buland DNA and celebrates its spirit.

TVS Radeon BS-VI comes with next-gen Eco Thrust Fuel Injection (ET-Fi) Technology, which boasts of 15% better mileage along with enhanced engine performance, better durability & smooth riding experience. TVS Radeon offers 20 Best in Class features including chrome bezel headlamp with DRL, car like speedometer, stylish petrol tank with ribbed thigh pads, largest cushion seat, solid suspension among others. The riding experience is made seamless with an optimum seat height, high ground clearance, long wheel-base and handy functional features like USB charging spot and convenient pillion grab-rail.

With distinctiveness and practicality, TVS Radeon continues to live true to its promise to Live Strong Ride Strong (JIYO BULAND BADHO BULAND).

TVS XL100 HD i-TouchStart:

TVS XL100 crossed a new milestone of 3 Mn customers since its launch in 2015 and a Special edition variant was launched to mark this celebration.

Further, a new variant TVS XL100 Comfort i-TouchStart focusing on entry level commuters was also launched. This variant comes with many style features like head lamp fairing, cushion back rest, chrome finish elements along with mobile charging option. With compact light weight design, new suspension setup, auto gear, this variant would be an ideal choice for those seeking affordable easy to ride product for everyday commute - including elderly people & women. The product series is now upgraded to meet BS-VI emission norms and launched with exciting features for the customers. Now TVS XL100 series is powered by ET-Fi technology which delivers 15% more mileage, excellent power and pickup with smoother engine. Also, many useful customer friendly features are added to improve convenience and safety - easy on-off combo switch, hydraulic suspension, wider platform, comfortable handlebar, low fuel indicator, roll-over switch off, mobile charger and more. TVS XL100 series has advanced in terms of technology and benefits yet remains affordable to the customer and continues to offer high value.


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 eco-friendly experience. It comes equipped with SmartXonnect, advanced features like Geo-fencing, Ride Statistics, Telematics, Remote Charge Status and Navigation Assist.

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 Electric Vehicles, the TVS iQUBE is expected to be a strong contender in this space in the times to come. TVS iQUBE will increase its presence in India in a phased manner, having started with Bengaluru and gradually moving to other key cities.

TVS King:

TVS King got a new variant in May 2019, with the introduction of TVS King Duramax with alternate fuel options like Petrol, LPG and CNG. This new variant comes with the 225 cc engine equipped with latest Liquid cooled technology, providing a great combination of speed, power and performance. This also ensures low wear and tear of engine parts, leading to higher life of engine. The brighter headlamp and strengthened B and C Pillars add better safety to driver and passengers. The new and sublime changes in both exterior and interior of DURAMAX brings a refreshing change and pride of ownership. The new look dashboard, styling handlebar with compact speedo cluster, integrated fuel gauge and dual tone seat add style to the variant. TVS King Duramax is an ideal choice for those who want to embrace technology to make their daily earnings better.

TVS King family (comprising Deluxe and Duramax variants) is now upgraded to meet the new BS-VI norms. The new BS-VI variants come with integrated starter generator, silent i-touch start, single start-stop switch, anti-wheel lock control and automatic altitude fuel correction. The bi-fuel option will be unique in this category. TVS King will continue to provide best combination of adequate power, mileage, comfort and lower running cost, delivering a great value to the customer.

Domestic Sales

The Company achieved sales of 24.1 lakh units of two-wheelers in the domestic market compared to sales of 31.4 lakhs in 2018-19. Companys domestic volumes declined in 2019-20 mainly due to falling consumer sentiment and rapid increase in cost of ownership towards higher mandatory insurance costs and enhanced safety norms. At the end of the year, towards a planned transition from BS-IV to BS-VI stock was effected throughout the trade.

In domestic motorcycles, the Company achieved sales of 7.6 lakh units and registered a decline of 25% over 2018-19. TVS Apache however, was able to garner a substantial share of the Premium motorcycle market with 3.7 lakh units, posting a decline of only 21%, while the Premium Motorcycle industry declined by 25% in 2019-20 against 2018-19.

In domestic scooters, the Company achieved sales of 10.2 lakh units and registered a decline of 18% over 2018-19. However, inspite of the headwinds, TVS NTORQ 125 sales grew by 24% in 2019-20 and TVS NTORQ 125 Racing Edition created a great momentum for the brand. The product continues to delight the customers and has garnered several accolades since its inception.

The Company also invested time for training all its service advisors and mechanics (18,000 employees of the extended enterprises) adequately across the country on BS-VI products and technology.

Exports sales - two-wheeler and three-wheeler

The Companys two-wheeler exports in 2019-20 were at 6.79 lakh units and witnessed an improvement with a growth of 9.2% over 2018-19.

Three-wheeler exports during the year reached 1.62 lakh units and recorded a 15.9% growth over 2018-19.

Opportunities and Threats

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 and could emerge as an area of opportunity for two-wheelers.

The Company has also strengthened its offerings in the premium segment catering towards younger customers. Many products in the new BS-VI line up of the Company have first in class and best in class features to attract such customers. TVS Apache, TVS NTORQ and the electric TVS iQube will all help the Company in these segments.


Domestic Business:

The brunt of the adverse economic environment will be manifest in real contraction of disposable income and weak consumer sentiment. The severity of impact is also higher at the lower to mid income with customers who form bulk of the commuter 2W industry. Consumers will conserve cash, in view of unforeseen events like potential job loss and salary cuts levels. This will lead to delay in purchase of all non-essential durables, and may pose a risk to many industries in the manufacturing sector including automobiles. This may result in delayed recovery of the 2W industry. While government and RBI are taking measures for enhancing availability of credit for dealers and suppliers, the participation would be dependent on the business outlook. This could lead to challenges in working capital management in the supply chain. The Company is cognizant and is advising dealers and suppliers to make prudent choices in cost reduction and enhance working capital management. From the supply side, availability of manpower in tier-2 and tier-3 suppliers affecting the supply of parts and daily operations are likely risks. Casual workmen and migrant workers hailing from other states may not return rapidly, posing risks across the supply chain of the Company. The Company has taken appropriate steps to minimize the impact of such risks and has channelled efforts to get back to normalcy at the earliest.

International Business:

The global pandemic has impacted economic activity across the world, hurting consumer sentiment, disrupting supply chains and reducing demand across many categories. The rising number of CoVID-19 cases in the Companys exports markets of LATAM, Asia, Africa, South-east Asia continue to pose high risk to various industries. Some of the Companys exporting countries have seen a rapid spread of CoVID-19 thereby lowering economic activity while other export markets including some in Africa have seen a more limited impact. A sustained drop in commodity prices and exports will reduce foreign exchange income in some of the export countries. 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.


Companys 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 Companys target.

As a process, risks associated with the business are identified and prioritized based on the Companys 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 Companys 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.


Total Quality Management (TQM)

TQM has always been a way of life, towards driving sustainable growth across the entire chain of suppliers, dealers, stakeholders and community. Continuous drive on cross-functional cluster approach to achieve breakthrough has helped significantly the business processes in the Company.

Several initiatives taken as part of policy management process, has facilitated implementing breakthrough initiatives like BS-VI transition, cost reduction and International business market growth. Emphasis on adhering to Daily Work Management practices was continued for retainment. Towards TVS Way permeation, 170 managers were trained on TVS way of working for developing champions and cascading the initiatives in the respective functions.

Total Employee Involvement continues to be the strong area, with focus expanding from functional excellence to contribution towards business results through theme-based kaizens. Employees have significantly contributed in the cost reduction initiatives, by focusing on eliminating wastes in processes. War room approach towards cost reduction was intensified and expanded to all functions. Teams had focused on speedy implementation of improvements, while strictly adhering to guiding principle of "speed without haste". Focus continued towards enhancing people capability in problem solving which has helped in increasing the speed of implementation of key projects for achieving business results.

Srinivasan Services Trust (SST), CSR arm of the group, has also used TQM way of work in its activities in the villages adopted.

Mr Venu Srinivasan, Chairman of the Company has been conferred with the prestigious Deming Distinguished Service Award for Dissemination and Promotion Overseas by Japanese Union of Scientists and Engineers (JUSE), for his outstanding contribution in the dissemination and promotion of Total Quality Management (TQM) across all companies in the group. Chairman has also guided in permeating TQM practices in many companies in India through cluster approach initiated by CII and ACMA.

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 localization to reduce material costs. Waste elimination, productivity improvements and process improvement will continue across the supply chain during 2020-21.

In the area of fixed cost, similar systematic approach of deployment of cost reduction is being done.

Research and Development

The Research and Development (R&D) team continued its focus on in-depth customer understanding, technology development and design innovations. This resulted in launch of TVS iQUBE, the first Electric scooter from TVS stable, with cutting edge technologies, including Smart Connect. The team has developed technologies to meet the stringent BS-VI norms, which is significantly lower than the BS-IV emissions for both 2W and 3W models in the portfolio. Focused work on advanced engine technologies for further improvements in fuel efficiency, performance and reduction of emission is being pursued for both domestic and CO2 international markets. Further technologies in the area of electric powertrains are continuously pursued with a strong focus towards future requirements.

The R&D team continues their efforts in developing cutting-edge technologies that are relevant for the near and long-term requirements of the Companys business plans. These developments are centered on customers, emerging mobility needs, advanced safety regulations and sustainability. The Company also collaborates with leading research establishments and educational institutions, both within and outside the country to develop breakthrough technologies. TVS Racing continued its dominance with high performance during the year, with 97% podium positions and 9 championship wins out of 10 participations. Several technology and product development projects in R&D are closely linked with the racing technology development, leveraging the decades of racing experience.

Information Technology

The Company continues to implement several projects to improve its efficiency, transparency and process control across supply chain from suppliers to dealers. 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. The Company has adopted various machine learning tools for improving quality of its products and processes.

Company has developed new products with connected technologies and developed skills to take them to the next phase.

As part of continuous improvement and technology benchmarking, the Companys IT systems were audited by external experts and recommendations were implemented. The Company has enhanced information security by adopting new cyber security tools. Periodic audits are conducted by external experts and necessary control measures are taken. 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 multilayered 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.

The Company is leveraging digital technology to enhance consumer experience and sheer reach with high engagement. Social listening is institutionalized and the Company is leveraging it for grievance redressal, consumer learnings and overall online reputation management.


The Board is accountable for evaluating and approving the effectiveness of 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.


As required under Regulation 34 of the Listing Regulations, there was a significant change in Interest coverage ratio compared to the previous financial year.

Details of change in Interest coverage and Return on Net Worth as compared to the previous financial year is given below.

Standalone Consolidated
Particulars UOM* 2019-20 2018-19 2019-20 2018-19
Interest coverage Times 8.38 12.93 2.01 2.63
Return on Net worth % 17.01 21.52 19.36 24.10

* UOM - Unit of measurement

Profit for the year is lower primarily due to suspension of plant operations on account of CoVID-19 pandemic and transition from BS-IV to BS-VI.

Also, exceptional expenses, associated with CoVID-19 has negatively impacted the profit for the year. Reduction in profit for the current financial year has resulted in adverse movement of ratios.


During the month of April 2020, the Board approved the issue of rated, unsecured, redeemable, non-convertible debentures (NCD) for a sum of Rs.500 Cr (Rupees Five Hundred Crores Only). The Company had allotted on 15th May 2020, 5000 NCDs of face value of Rs.10 Lakhs each aggregating to

$ 500 Cr with a tenor of 3 years at the rate of 7.5% p.a. NCDs will be redeemed at the end of 3rd year by way of bullet payment. The NCDs were listed with National Stock Exchange of India Limited (NSE) on 19th May 2020.


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 and effectiveness of Internal Financial Controls.

Occupational Health & Safety (OHS)


To promote sustainability to stakeholders, a conference was organized with the theme "Sustainability in Manufacturing Supply Chain" during February 2020. The Companys 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 that meets the requirements of each of the standards.

a. Utilization of Non-renewable energy:

The renewable power contributes to 76% in overall share of power. These initiatives of renewable energy resulted emission reduction of about 60,000 tonnes during in CO2 2019-20. Company has invested in group captive mode to the tune of 35 MW wind power and roof top solar power of 5.9 MW.

b. Conservation of water

To conserve water consumption in canteen, the Company has introduced dishwasher and automated washing machines for vegetables which resulted in substantial water saving.

c. Material conservation & waste minimisation

In process design, efforts have been taken to minimize the generation of waste by introduction of clean technologies. Water based paint application (cathodic electro-deposition), pre-treatment based on nano technology in powder coating have been adopted. Robotic paint application is being continuously augmented towards enhancing paint transfer efficiency. Virtual training facility has been established for training operators towards improving their painting skills without using paint and generating waste.

d. Effluent treatment

Automation and advanced treatment processes have been adopted in Effluent treatment, Recycling, Evaporator and Sewage treatment facilities. During 2019-20, a unique effluent treatment process which maximizes recycling efficiency in RO plants was established to treat effluents with different characteristics in a common facility. The chemical sludge from waste water treatment plants and paint sludge generated during paint application are used for co-processing in cement industry.

Towards IT & IOT initiatives, ambient air quality, ambient VOC and stationary emissions are monitored through online systems. Water & energy consumption is monitored through online system. The forms and returns under applicable Environmental Acts and Rules were made online.

Health & Safety

Implementation of ISO 45001:2018 has helped to improve occupational health and safety performance by proactively preventing work-related injury and ill health. As part of continual improvement in safety, around 643 proactive hazard control measures have been implemented across plants. The Company has achieved a reduction of 33% in frequency rate of accidents compared to previous year.

Towards building a sustainable safety culture, periodical safety trainings have been organized and around 7352 employees were covered. During National Safety Day celebration on 4th March 2020, as a part of "Buckle up & Strap up" - Road Safety campaign, various promotional activities were conducted and all the employees were covered across Hosur, Mysore & Nalagarh locations. TVSM-Hosur plant received three "First prizes" from Government of Tamil Nadu in the State Safety Awards function held in Chennai during September 2019. This recognition for achieving longest accident free period & reducing frequency rate of accident.

Influenza immunization was done to employees under high risk categories including those in marketing and field staff all over India. Health days were celebrated (World Health Day, Diabetic, Heart, No Tobacco and Aids Days) to create awareness among employees through talks, posters, quiz competitions, standees. Walkathon conducted during March 2020, to promote idea of health and wellness among employees and encourage walking among them and their families.


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 31st March 2020, the Company had 5,133 employees on its rolls.


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, 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.


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 2020, 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 2020 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.


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

Over 24 years of service, SST has played a pivotal role in changing lives of people in rural India by creating self-reliant communities that are models of sustainable development. The Company is eligible to spend on their ongoing projects/ programmes, falling within the CSR activities specified under the Act, 2013, as mandated by the Ministry of Corporate Affairs for carrying out the CSR activities.

The Committee formulated and recommended a CSR Policy in terms of Section 135 of the Act, 2013 along with a list of projects / programmes to be undertaken for CSR spending in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Based on the recommendation of the CSR Committee, the Board has approved the projects / programmes carried out as CSR activities by the following non-profitable organizations having an established track record for more than the prescribed years in undertaking similar programmes / projects, constituting more than 2% of the average net profits of the Company, made during the three immediately preceding financial years, towards CSR spending for the financial year 2019-20.

The Company spent an additional sum of Rs.17 Cr by way of contribution to PM CARES fund, which is covered under the CSR provisions of the Act, 2013.

Amount spent
S.No. Name of the Organisation ($ in Cr)
1. Srinivasan Services Trust (SST) 7.66
2. Sri Sathya Sai Central Trust 3.00
3. Ramakrishna Mission Centre For Human Excellence 3.00
4. Seva Bharati, Purbanchal 2.00
5. Sreevalsam Educational Trust 1.00
6. PM CARES 17.00
Total 33.66

Presently, SST is working in 5,000 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 focused on the areas of economic development, health care, education, environment, social and infrastructure actively in 3000 villages. SST will focus on 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 2019-20 are given by way of Annexure IV attached to this Report.


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


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


- Emerald Haven Realty Limited, Chennai and its subsidiaries.

- Ultraviolette Automotive Private Limited, Bengaluru.

- Tagbox Solutions Pvt Ltd, Bengaluru.

Associates of TVS Motor (Singapore) Pte Ltd

- Tagbox Pte Ltd, Singapore.

- Predictronics Corp, USA.


Sundaram Auto Components Limited (SACL)

Sales of SACL was Rs.530 Cr in 2019-20 as against Rs.601 Cr in the previous year.

SACL earned a Profit Before Tax of Rs.6.44 Cr during the year 2019-20 as against Rs.17.37 Cr in the previous year. SACL declared an interim dividend of Rs.0.50 per share (5%) for the year ended 31st March 2020, thereby absorbing a sum of Rs.2.54 Cr including dividend distribution tax, and paid to the Company.

During the year, TVSM (the Company) has subscribed a sum of Rs.60 Cr in the equity capital of SACL.

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

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


Chennai residential real estate market has de-grown by 20% in the financial year 2019-20. The NBFC crisis, changes to GST regulations and CoVID-19, led to a reduction in the number of new launches by developers and postponement of purchase decision by buyers, resulting in a general slowdown in the real estate market.

During the year, all villas in the final phase of GreenHills and plots in Salamangalam, Chennai were sold.

In 2019-20, the Company launched Flourish Apartments at Salamangalam comprising of 208 residential units. This project falls under the category of "affordable homes" defined by the Government of India. 61% of the apartments have been sold till date.

During 2019-20, project Lighthouse in Chennai was launched - a 14 storey residential apartment complex comprising of 279 units and 73% of the apartments have been sold till date. In January 2019, Emerald Haven Life Spaces (Radial Road) Limited (EHLSRRL), a subsidiary of EHRL acquired land admeasuring 6 acres to develop Multistoried Building (MSB) at Kovilambakkam, Radial Road, Chennai.

During the year, the Company geographically expanded to Bengaluru via Joint Development Agreement (JDA) for a 6.4 acre land parcel in Kagglipura, Bengaluru.

During the year, EHRL entered into a Joint Venture Agreement with ASK Real Estate Special Opportunities Fund - II (ASK) and invested a sum of Rs.16.63 Cr and ASK invested their share of Rs.15.98 Cr.

The Company has completed construction of 1.4 Million Sft till date and the total area under development as on date is 5.5 Million Sft.

Subsidiaries of EHRL

1. Emerald Haven Development Limited (EHDL);

2. Emerald Haven Projects Private Limited (EHPPL);

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

4. Emerald Haven Realty Developers (Paraniputhur) Private Ltd (EHRDPPL);

5. Emerald Haven Property Development Limited (EHPDL);

6. Emerald Haven Town and Country Private Limited (EHTCPL);

7. Happiness Harmony Property Developers Private Limited (HHPDPL); and

8. Emerald Haven Towers Limited (EHTL)

PT.TVS Motor Company Indonesia (PT TVSM)

The Indonesian two-wheeler Industry was stagnant during the year 2019-20 at around 7.2 million units. While Skubek segment grew by 3%, bebek and motorcycle segments suffered negative growth of 15% and 21% respectively. During the year under review, PT TVS achieved sales of 53,650 nos. of two wheelers as against 40,760 nos. of last year, thereby registering a growth of 31%. In three wheelers, the Company recorded sales of 8,100 units as against 2,700 units of sales during the previous year.

The impressive growth in sales numbers, coupled with margin improvement enabled the company to achieve a positive EBITDA of USD 0.75 million for the full year as against a loss of USD 3.04 million of last year. It is also worthwhile to note that the Company achieved break even by posting operating profit for the second half of the financial year 2019-20. During the year, TVSM (the Company) has invested a sum of USD 5 Mn in the ordinary shares of PT TVSM.

TVS Motor Company (Europe) B.V

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

TVS Motor (Singapore) Pte. Ltd

TVS Motor (Singapore) Pte Limited, a wholly owned subsidiary is leveraged to operationalize digital technology by delivering high quality solutions that addresses real life business challenges viz., harnessing the power of Analytics, Artificial Intelligence, Augumented Reality, Machine Learning and Internet of Things.

These are focused in areas of automotive and fintech industries that have direct relevance to Company and its subsidiaries. The digital strategy would be delivered through both organic and inorganic means.

As part of this strategy, during the financial year 2019-20, TVS Motor (Singapore) Pte Limited has made investments in US based companies viz., Altizon Inc, Predictronics, Scienaptics and also in Tagbox Pte, Singapore, which are in the fields of IOT, predictive maintenance and credit underwriting, with an aggregate investment of USD 16.57 Mn. During the year, TVSM (the Company) has invested a sum of SGD 26.48 Mn in the ordinary shares of TVS Motor (Singapore) Pte Limited.

Project 303 Bidco Limited, United Kingdom (UK)

TVS Motor (Singapore) Pte Limited has acquired a newly incorporated company viz., Project 303 Bidco Limited, UK (UK Subsidiary) on 2nd April 2020 and consequently, it has become wholly owned subsidiary.

UK Subsidiary has signed an asset purchase agreement with, amongst others, Norton Motorcycles Holdings Limited (in administration) and Norton Motorcycles (UK) Limited (in administration) (together "Norton") to acquire certain assets from Norton, including, the brand "Norton" and other associated brands.

Norton Motorcycles (UK) Limited (in administration) was engaged in the business of manufacturing the iconic "Norton" and allied brand motorcycles. It is an entity based in the United Kingdom of Great Britain and Northern Ireland.

TVS Motor Services Limited (TVS MS)

TVS MS was initially the investment SPV of the Company, for funding TVS Credit Services Limited (TVS CS). The National Company Law Tribunal, Chennai (NCLT), on 16th April 2019 approved a Scheme of Arrangement (Scheme) between TVS MS, TVS CS and their respective shareholders and became effective from 9th May 2019, being the date of filing of the said approved Scheme with the Ministry of Corporate Affairs.

In terms of the said Scheme, TVS MS redeemed its entire Non-cumulative Redeemable Preference Shares (NCRPS) held by the Company by transferring the investment held by it in TVS CS equity shares in favour of the Company on 6th June 2019.

Post transfer of equity shares of TVS CS, the Company now holds 83.95% directly in TVS CS, which was earlier held through TVS MS, the wholly owned subsidiary of the Company. TVS MS continues to be a 100% subsidiary of the Company. During the year, TVSM (the Company) subscribed to 4,50,00,000 Equity Shares of TVS MS aggregating to $ 45 Cr at a price of Rs.10/- per share.

TVS Credit Services Limited (TVS CS)

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

During the year 2019-20, TVS CSs overall disbursements registered at Rs.7,585 Cr as compared to Rs.7,067 Cr in the previous year. During the year under review, the assets under management stood at Rs.9,215 Cr as against Rs.8,335 Cr during the previous year registering a growth of 10%. Total income during the financial year 2019-20 increased to Rs.2,015 Cr from Rs.1,635 Cr, during the previous financial year, registering an increase of 23.2% over the previous year.

The profit before tax and exceptional items for the year has also improved and stood at Rs.219 Cr as against Rs.216 Cr during the previous year. During the year, TVSM (the Company) has invested a sum of Rs.45 Cr in the Equity capital of TVS CS.

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.

Sundaram Holding USA Inc. (SHUI) and its subsidiaries

SACL along with 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. SHUIs 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 2019-20, SACL has invested a sum of USD 6 Mn in the ordinary shares of SHUI and holds 75% of the total capital of SHUI as on 31st March 2020.

Ultraviolette Automotive Private Limited (UV)

The Company has invested a sum of Rs.11 Cr in the shares of UV including a sum of Rs.5 Cr invested in Preference

Shares in 2019-20 and holds 25.76% of its total capital as on 31st March 2020. UV is a start-up company engaged in developing electric mobility solutions.


The consolidated financial statements of the Company are prepared in accordance with the provisions of Section 129 of the Act, 2013 read with the Companies (Accounts) Rules, 2014 and Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) along with a separate statement containing the salient features of the financial performance of subsidiaries / associates in the prescribed form. The audited consolidated financial statements together with Auditors Report 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 as mentioned in the Notice of AGM.

The consolidated Profit Before Tax of the Company and its subsidiaries & associates amounted to Rs.865 Cr (after exceptional item of Rs.40 Cr) for the financial year 2019-20 as compared to Rs.1,083 Cr in the previous year.


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 them, one-third is liable to retire by rotation at every annual general meeting. Dr. Lakshmi Venu and Mr H Lakshmanan, Directors are liable to retire by rotation at AGM, and being eligible, offer themselves for re-appointment.

As per the Listing Regulations, 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. Hence, approval of the shareholders for the re-appointment of Mr H Lakshmanan, aged 86 years NE-ID of the Company, who is liable to retire by rotation at this ensuing AGM, is being sought through special resolution.

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

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

Independent Directors (IDs)

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

M/s T Kannan, C R Dua, Prince Asirvatham and Hemant Krishan Singh, IDs were re-appointed by the shareholders through Postal Ballot on 5th March 2019 for the second term of five consecutive years from 14th 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.

During the year, Mr R Ramakrishnan (RK), who served as Director for more than a decade, passed away on 7th July 2019, after a brief illness.

RKs versatile knowledge and business acumen helped the Company over a decade to achieve its current growth. He was instrumental in enhancing the international business of the Company and the fact that the Company has spread globally in more than 60 countries stands testimony to RKs contribution to the Company; his par excellent skill in dealer arrangement and resolving many critical issues between the dealers and the Company from time to time.

At the 27th AGM held on 22nd July 2019, the shareholders approved the appointment of Mrs Lalita D Gupte and Mr R Gopalan as IDs of the Company, effective 23rd October 2018 and 30th April 2019 respectively for the first term of five consecutive years, from the respective dates of their appointment.

The terms of IDs cover, inter-alia, duties, rights of access to information, disclosure of their interest / concern, dealing in Companys shares, remuneration and expenses, insurance and indemnity. The IDs are provided with copies of the Companys 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 Companys website in the link as provided in page no. 97 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 Act, 2013 and obtained ID registration certificate.

Separate meeting of Independent Directors

During the year under review, a separate meeting of IDs was held on 10th March 2020.

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 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 the Non-IDs interaction during the Board / Committee meetings and thoughtful inputs given by them to improve the risk management, internal controls and contribution to the Companys 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 Chairmans high level of integrity, trust, confidentiality, impartial & judicious approach, transparency and commitment to governance, setting high standards for the Company; Outstanding ability to motivate the boards involvement and stimulate discussions particularly during a year of diverse challenges which included transition to BS-VI and related supply chain and other challenges and tough state of economy and clear initiatives for staying ahead of competition.

Chairman was also nominated for the "Padma Bhushan" award, the third highest civilian award, and was conferred with the prestigious Deming Distinguished Service Award for Dissemination and Promotion Overseas, and becomes the First Industrialist from India to be bestowed this prestigious award for his contributions in the field of Total Quality Management (TQM).

The Deming Prize is the highest award for TQM in the world. Deming Distinguished Service Award for Dissemination and Promotion Overseas is given to individuals who have made outstanding contributions in the dissemination and promotion of Total Quality Management (TQM) and is sponsored by Japanese Union of Scientists and Engineers (JUSE). He is also a key member of Prime Minister council on Trade and Industry.

IDs also recorded the growth story of the Company under the stewardship of Chairman and significant increase in turnover & Profit and its effect on increased share price for past five years.

c) Board

The IDs also evaluated Boards 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. 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, Banking, Information Technology and Governance.

IDs recorded that they were always kept involved through open and free discussions and provided additional inputs in emerging areas being forayed into by the Company and high levels of Corporate Governance in all management discussion and decisions were maintained.

The IDs unanimously evaluated the prerequisites of the Board viz., formulation of strategy, acquisition & allocation of overall resources, setting up policies, directors selection processes and cohesiveness on key issues and satisfied themselves that they were adequate.

They were satisfied with the Companys 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 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)

During the year, the board, at its meeting held on 4th February, 2020 re-appointed Mr Venu Srinivasan as Chairman and Managing Director of the Company (CMD), effective 24th April 2020 to hold the office for a further period of five years on such terms and conditions and the same was approved by the shareholders through Postal ballot on 17th March 2020 by way of a special resolution.

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 the 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

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 23rd September 2014 and amended from time to time to maintain consistency and statutory amendments to be reflected in the policies to make it upto date and more comprehensive.

The objective of such policy shall be to attract, retain and motivate executive management and devise remuneration structure to link to Companys strategic long term goals, appropriateness, relevance and risk appetite.

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

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

Remuneration payable to Non-executive Independent Directors

The Shareholders at the 25th AGM of the Company held on 11th 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. The Company derives substantial benefit through their expertise and advice, increased involvement in policy issues and also by devoting considerable time in providing guidance to various issues of the Company from time to time.

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 Listing Regulations, the Board reviewed and evaluated Independent Directors and various Committees viz., Audit Committee, Risk Management Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders Relationship Committee, based on the evaluation criteria laid down by the NRC. Board has carried out the evaluation of all Directors (excluding the Director being evaluated) and its Committees through a set a questionnaires.

Independent Directors

The performance of all IDs were assessed against a range of criteria such as contribution to the development of business strategy and performance of the Company, understanding the major risks affecting the Company, clear direction to the management and contribution to the Board cohesion. The performance evaluation has been done by the entire Board of Directors, except the Director concerned being evaluated. The Board noted that all IDs have understood the opportunities and risks to the Companys strategy and are supportive of the direction articulated by the management team towards consistent improvement.

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


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 Committees terms of reference to ensure that the Companys existing practices remain appropriate.

Recommendations from each Committee were considered and approved by the Board prior to its implementation. The Board has accepted all the recommendations of the committees which are mandatorily required, 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 2019-20 is provided as part of Corporate Governance Report prepared in terms of the Listing Regulations.


Statutory Auditors

The Company at its twenty sixth AGM held on 7th 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 26th AGM till the conclusion of 31st 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 3rd 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 2020-21.

The Auditors Report for the financial year 2019-20 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 year 2019-20, 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 28th May 2020 has re-appointed M/s. S Krishnamurthy & Co., Practising Company Secretaries, Chennai having CP No. 2215 allotted by the Institute of Company Secretaries of India as Secretarial Auditors for the financial year 2020-21.

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 2020-21.

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, actual travelling and out-of-pocket expenses incurred by him, and 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 2018-19 on 20th August 2019 in XBRL format.


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 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 Regulation 17 (8) of the Listing Regulations pertaining to CEO/CFO certification for the financial year ended 31st March 2020.


In terms of Regulation 34 of Listing Regulations, the Business Responsibility Report for the year 2019-20 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 Companys website in the link as provided in page no. 97 of this Annual Report.


The Company has adopted a Policy on Vigil Mechanism in accordance with the provisions of Act, 2013 and Regulation 22 of 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 Companys 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 Companys Code.

The Board at its meeting held on 4th February 2020 made certain amendments to the Whistle Blower Policy for protecting whistle blower who made in good faith and express guidance on procedure to be undertaken by the investigators for carrying out investigation on complaints filed by employees.

The Policy is disclosed on the Companys website in the link as provided in page no. 97 of this Annual Report.


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 2020.


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:

The Manufacturing facilities and all offices of the Company were closed on March 23, 2020 following the nationwide lockdown due to CoVID-19. The Company has since obtained required permissions and restarted its manufacturing facilities and all offices partially. Based on assessment of the impact of CoVID-19 on the operations of the Company and ongoing discussions with customers, vendors and service providers, the Company is confident of obtaining regular supply of raw materials and components, resuming supply chain logistics and serving customers.

The Company has considered the possible effects of CoVID-19 on the carrying amounts of Property, Plant and Equipment, Investments, Inventories, Trade Receivable and Other Current Assets. In developing the assumptions relating to the possible future uncertainties in the economic conditions because of this pandemic, the Company, as at the date of approval of the financial results, has used external and internal sources of information / indicators to estimate the future performance of the Company. Based on current estimates, the Company expects the carrying amount of these assets to be recovered.

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 Companys website in the link as provided in page no. 97 of this Annual Report.

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 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. Certain incentive / performance related payments for the financial year 2019-20 for KMPs and SMPs have been reduced / deferred on account of CoVID-19.

Comparative analysis of remuneration paid:

A comparative analysis of remuneration paid to Directors and Employees with the Companys performance is given as Annexure V to this Report.

Details of material 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 all related party transactions are enclosed as part of the accounts for the year ended 31st March 2020.

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 2019-20 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, 2013.

Please refer note No. 4 to Notes on accounts for the financial year 2019-20, 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.


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
28th May 2020 Chairman