Your Company recorded a net profit of Rs, 117.34 crores for the year ended 31st March, 2018 as against Rs,149.69 crores for the previous year on a consolidated basis.
HIGHLIGHTS ON PERFORMANCE OF SUBSIDIARY AND ASSOCIATES AND THEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY
Your Company's wholly owned subsidiary TVS Srichakra Investments Limited (TSIL) recorded a net loss of Rs, 26.82 lakhs (PY Rs, 576 lakhs). During the year interest on Optionally Convertible Debentures (OCDs) was waived.
During the year, ZF Electronics TVS (India) Pvt. Limited (ZFTVS), an associate Company, recorded a total revenue of Rs, 49.07 Crores (PY Rs, 46.43 Crores), ZFTVS made an EBITDA of Rs, 1.12 Crores (PY Rs, (0.35) Crores) and incured a net loss of Rs, 2.45 Crores (PY Rs, 3.82 Crores), mainly due to increase in cost of raw materials. Subsequently, ZFTVS has become a wholly owned subsidiary of TSIL with effect from 4th June, 2018 and the name was changed to TVS Sensing Solutions Private Limited (TSSPL) on 5th July, 2018. TSSPL is identifying business development opportunities and cost reduction actions for turning around and continuing its past track record of profitability.
DIVIDEND
The Board of Directors has recommended a dividend of Rs, 40/- (400%) per equity share of Rs, 10/- each for the financial year ended 31st March, 2018 amounting to Rs, 36.92 crores (inclusive of dividend distribution tax of Rs, 6.30 crores). The dividend payment is subject to approval of members at the ensuing Annual General Meeting.
The Dividend Distribution Policy of the Company is available on the Company's website: http://www.tvstyres.com/policy/ DIVIDEND%20DISTRIBUTION%20POLICY.pdf
FINANCE
Your Company was able to continue its sustained efforts in judicious management of working capital through regular monitoring receivables, inventories and other working capital parameters. The Cash and cash equivalent as at 31st March, 2018 was at Rs, 6.63 crores.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
No loan or guarantee covered under the provisions of Section 186 of the Companies Act, 2013 (“the Act”) has been given by your Company.
Particulars of investments made by your Company are furnished in the notes to the financial statements.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
As per Section 125 of the Companies Act, 2013, after completion of seven years from the date of transfer to unpaid dividend account, the unclaimed dividend amount has to be transferred to the Investor Education and Protection Fund Authority (IEPF Account). Accordingly, the unclaimed dividend amount for the financial year 2009-10 became due for transfer to IEPF Authority. The Company sent letters to those shareholders, who have not encashed their dividend amount. Despite the reminder letters sent to such shareholders, an amount of Rs.17,33,280/- remained unclaimed and the same was transferred to IEPF Account on 15.4.2017.
TRANSFER OF UNCLAIMED DIVIDEND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND AUTHORITY (IEPF Authority)
Pursuant to the provisions of IEPF Rules / Securities and Exchange Board of India (SEBI) notification, all shares in respect of which dividend has not been paid or claimed for a period of seven consecutive years, shall be transferred by the Company to the designated Demat Account of the IEPF Authority ('IEPF Account'). In this regard, the Company has sent letters to the shareholders concerned and also published notice in the newspapers as per the IEPF Rules. Accordingly, the Company had transferred 90,195 equity shares to the IEPF Account on 30.11.2017
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR Committee constituted as per Section 135 of the Companies Act, 2013 comprises of Ms. Shobhana Ramachandhran, Mr. P Vijayaraghavan and Mr. Rasesh R Doshi. Details of role and functioning of the Committee are given in the Corporate Governance Report.
The Company's Corporate Social Responsibility (CSR) activities / projects are focused towards promoting general health care, providing safe drinking water, empowering women by providing education and employment enhancing vocation skills and by setting up day care centers, ensuring environmental sustainability and conservation and maintenance of natural resources, protection of natural heritage, sports, arts and culture. The CSR policy may be accessed at the Company's website at the link: http://www.tvstyres.com/policy/CSR%20POLICY.pdf
The Company would also undertake other need based initiatives in compliance with Schedule VII to the Companies Act, 2013. The “Annual Report on CSR Activities” is annexed to the Board's Report as Annexure 1.
INTERNAL FINANCIAL CONTROLS
Your Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. Nonetheless your Company recognizes that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are re-enforced on an on-going basis. The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.
BUSINESS RISK MANAGEMENT
The Business risks identified by the Company are regularly reviewed by Senior Management and the key risks are revised and modified as per the changing scenario. The Board reviews the key risks identified and mitigation plan initiated by the Company on a quarterly basis.
VIGIL MECHANISM
The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Regulations”) is implemented through the Company's Whistle Blower Policy to report any serious actual or suspected frauds, concerns relating to financial matters / reporting, unethical or illegal conduct or actual or possible violation of Code of Conduct / Ethical Standards and provides adequate safeguard against victimization of persons who use such mechanism. The policy has been uploaded on the website of the Company: http://www.tvstyres.com/policy/WHISTLE%20BLOWER%20POLICY.pdf.
During the year, no instances were reported under this mechanism and details pertaining to Vigil mechanism / Whistle Blower Policy are explained in the Corporate Governance Report.
SUBSIDIARY COMPANY(S)
The audited accounts of the subsidiary company TVS Srichakra Investments Limited have been consolidated with the Company as on 31st March, 2018.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statement (CFS) of the Company and its subsidiary company(s) is prepared in accordance with the Act, relevant rules, Accounting Standards and as stipulated in the Regulations. The audited financial statement including the CFS along with all relevant documents and the Auditors' Report, form a part of this Annual Report and may be accessed on the Company's website www.tvstyres.com.
A statement containing the salient features of the financial statement of subsidiary / associate company(s) is provided in Form AOC 1 as Annexure 2 to the Directors Report.
The financial statement of the subsidiary company(s) may also be accessed on the Company's website www.tvstyres.com. These documents will also be available for inspection during normal business hours on working days at the Registered Office of the Company. A copy of the financial statements of the subsidiary shall be provided free of cost to the shareholders up on request.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Act, your Directors state that:
a) in the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;
b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are 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 that period;
c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors had prepared the annual accounts on a going concern basis;
e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively, and
f) 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.
DIRECTORS Directors liable to retire by rotation
Mr. R Naresh (DIN : 00273609), Director on the Board is liable to retire by rotation at the 35th Annual General Meeting (AGM) and being eligible, offers himself for re-appointment.
Brief resume of the Director seeking re-appointment along with other details required are provided in the notice of 35th AGM of the Company. Appropriate resolution for his re-appointment is being placed for approval of the members at the ensuing AGM. The Board of directors on the recommendation of Nomination and Remuneration Committee recommends his re-appointment as Director.
Independent Directors
The term of office of Mr. M S Viraraghavan and Mr. H Janardana Iyer, as Independent Directors, is upto 31st March, 2019 and Mr. Rasesh R Doshi, as an Independent Director is upto 23rd May, 2019. The Board of Directors, on recommendation of the Nomination and Remuneration Committee has recommended re-appointment of Mr. M S Viraraghavan, Mr. H Janardana Iyer, and Mr. Rasesh R Doshi, as Independent Directors of the Company for a second term of 5 (five) consecutive years on the expiry of their current term of office.
The Board based on the recommendation of the Nomination and Remuneration Committee has recommended that Mr. V Ramakrishnan be appointed as an Independent Director of the Company by the members for a term of 5 (five) consecutive years.
Brief resume of the Independent Directors seeking appointment / re-appointment along with other details required are provided in the notice of 35th AGM of the Company. Appropriate resolution for their re-appointment is being placed for approval of the members at the ensuing AGM. The Board recommends their appointment / re-appointment as Independent Directors.
The Company has received declarations from all the Independent Directors of the Company and Mr. V Ramakrishnan confirming that they meet the criteria of independence prescribed under the Act and the Regulations.
Familiarization Programme for Independent Directors
The Company has done various programmes to familiarize Independent Directors with the Company, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters.
Periodic presentations are made at the Board and Committee meetings on business and performance of the Company. Details of the familiarization programme for Independent Directors are explained in the Corporate Governance Report.
Board Evaluation
As per provisions of the Companies Act, 2013 and Regulation 17(10) of the Regulations, the evaluation process for the performance of the Board, its committees and individual Directors was carried out internally. The performance evaluation of the Chairman and Non-Independent Directors was carried out by Independent Directors. More details are available in the Corporate Governance Report.
The evaluation process considers attendance of Directors at Board, Committee and Annual General Meeting, effective participation, domain knowledge etc.
Directors / Key Managerial Personnel appointed or resigned during the year
The members of the Company at their 34th Annual General Meeting have approved the re-appointment of Mr. R Naresh, Managing Director (designated as Executive Vice Chairman) of the Company liable to retire by rotation, for a term of three (3) years with effect from 16.6.2017.
The Board of Directors based on the recommendation of the Nomination and Remuneration Committee and approval of Audit Committee, appointed Mr. K V Ganesh as Chief Financial Officer of the Company, in place of Mr. K P Rangaraj who has resigned from the services of the Company.
Mr. K V Ganesh is a Chartered Accountant and Company Secretary, having completed his graduation from Shri Ram College of Commerce (SRCC), Delhi. He also pursued Executive MBA from the Indian Institute of Management (IIM), Kolkata. He brings with him rich experience of about 3 decades in Finance & Corporate Governance, of which 19 years at CFO Level.
Appointment and Remuneration Policy
The policy on Director's appointment and remuneration including remuneration for Senior Management and other employees and on board diversity is approved by the Nomination & Remuneration Committee and the Board. The main objective of the said policy is to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate the Directors, KMP, Senior Management and other employees. The remuneration involves a balance between fixed and variable pay, reflecting short and long-term performance objectives appropriate to the working of the company and its goals.
The policy is available at: http://tvstyres.com/policy/REMUNERATION%20POLICY.pdf and the same is reproduced in the Corporate Governance Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report as Annexure 3.
Further a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in Rule 5(2) and Rule 5(3) of the aforesaid Rules forms part of this report. However, in terms of the first proviso of Section 136 of the Act, the Annual Report is being sent to the members and others entitled thereto, excluding the above information. The said information is available for inspection by members at the Registered Office of the Company during business hours on working days upto the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary and the same will be furnished.
BOARD MEETING
Calendar of Meetings is prepared and circulated in advance to the Directors.
Six meetings of the Board of Directors were held during the year. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report.
AUDIT COMMITTEE
The Audit Committee comprises of Mr. M S Viraraghavan (Chairman), Mr. P Vijayaraghavan, Mr. H Janardana Iyer and Mr. Rasesh R Doshi as members. During the year, all the recommendations made by the Audit Committee were accepted by the Board.
RELATED PARTY TRANSACTIONS
All contracts / transactions entered by the Company during the financial year with related parties were in its ordinary course of business and on an arms' length basis.
The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board may be accessed on the Company's website at: http://tvstyres.com/policy/RELATED%20PARTY%20TRANSACTION%20 POLICY.pdf
There were no materially significant related party transactions which could have potential conflict with interest of the Company at large.
Members may refer to Note 37 (b) to the Standalone Financial Statement which sets out related party disclosures pursuant to IND AS.
In accordance with Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014, Form AOC 2 is given in Annexure 4.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and date of the report. There has been no change in the nature of business of the Company.
AUDITORS Statutory Auditor
The Members at the 34th AGM of the Company had appointed M/s. PKF Sridhar & Santhanam LLP, (ICAI Registration No. 003990S / S200018) Chartered Accountants, Chennai as the Statutory Auditor of the Company to hold office for a term of five years i.e., from the conclusion of the said AGM until the conclusion of 39th AGM of the Company, subject to ratification of their appointment by the members, every year. The Ministry of Corporate Affairs vide its Notification dated 7th May, 2018, has dispensed with the requirement of ratification of Auditor's appointment by the members, every year. Hence, the resolution relating to ratification of Auditor's appointment is not included in the Notice of the ensuing AGM.
The Auditors' Report does not contain any qualification.
Cost Auditor
Pursuant to Section 148 of the Companies Act 2013, the Board of Directors, on the recommendation of the Audit Committee appointed Dr. I Ashok, Cost Accountant (Membership No. M11929) as the Cost Auditor of the company for the financial year 2018 - 2019 and has recommended his remuneration to the members for ratification at the ensuing Annual General Meeting. Accordingly, the resolution seeking the same is included in the notice convening the AGM.
Dr. I Ashok has given his consent to act as Cost Auditor and confirmed that his appointment is within the limits of the Section 139 of the Companies Act, 2013. He has also certified that he is free from any disqualifications specified under Section 141 of the Companies Act, 2013.
The Cost Audit Report does not contain any qualification.
Secretarial Auditor
The Board had appointed Mr. N Balachandran (Membership No 5113), Practicing Company Secretary to conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended 31st March, 2018 is annexed herewith marked as Annexure 5 to this Report. The Secretarial Audit Report does not contain any qualification.
SECRETARIAL STANDARDS
The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
CORPORATE GOVERNANCE
The report on Corporate Governance as stipulated under the Regulations forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as stipulated under the Regulations is presented in a separate section, forming part of the Annual Report.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure 6 to this Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the annual return in Form MGT-9 is given as Annexure 7 to this Report.
BUSINESS RESPONSIBILITY REPORT
As stipulated under the Regulations, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as a part of the Annual Report.
OTHER DISCLOSURES
- No deposits were accepted by the Company from the public falling within the ambit of Chapter V of the Act.
- During the year, the Company has not issued shares with differential rights as to voting, dividend or otherwise.
- The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.
- T he Company has not issued shares under sweat equity / stock options scheme to its employees. There is no change in the Share capital of the Company during the financial year under review
- T he Company has zero tolerance towards sexual harassment at the workplace and to this end, has adopted a policy on prevention of sexual harassment of women at work place. During the financial year under review, no cases were reported under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
- Neither the Managing Director nor the Managing Director designated as Executive Vice Chairman of the Company receive any remuneration or commission from its subsidiary.
- No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company's operation in future.
- No fraud has been reported by the Auditors to the Audit Committee or the Board.
- The Company continued to enjoy cordial and peaceful industrial relations with the workers and employees at all levels.
ACKNOWLEDGEMENT
The Board of Directors would like to express their sincere appreciation for the assistance and co-operation received from the banks, Government authorities, customers, vendors and members during the year under review. The Board of Directors also wish to place on record its deep sense of appreciation for the committed services by all employees of the Company.
For and on behalf of the Board
Madurai R NARESH SHOBHANA RAMACHANDHRAN
17.7.2018 EXECUTIVE VICE CHAIRMAN MANAGING DIRECTOR
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