TVS MOTOR COMPANY LIMITED
The Directors have the pleasure in presenting the 31st annual report and the audited
accounts of the Company for the year ended 31st March 2023.
1. COMPANY PERFORMANCE
Key Performance Snapshot
The Company registered sales of 35.13 lakh units of two-wheelers in 2022-23. The
Company, in-spite of headwinds, registered an all-time high turnover of $ 26,378 Cr and an
all-time high profit before tax of $ 2,003 Cr.
Macro Overview: Indian economy outperforms global peers in Fiscal 2023
India was open for business throughout FY 23, this stability, was a welcome respite
from the lockdown led disruptions of the previous 2 years. The remarkable and
unprecedented rapid mass vaccination drive undertaken by the Government made this
possible. India experienced a revival with improvement in markers of labour participation,
income, consumption, savings and gross fixed capital formation. The global geo-political
strife, persisted unresolved. This led to global supply chain challenges, semiconductor
shortages, commodity inflation. Advanced global economies also tightened their monetary
policies with consequent cascade impacts on global markets especially on the economies of
emerging and low income countries. The growth trajectory of the Indian Economy has been
better than global peers. This has been made possible by an active and prudent policy
management by the government and also the inherent fundamentals of the Indian economy. The
diverse growth drivers provided much needed stability in a globally volatile economic
environment.
India recovery continued to demonstrate its strong economic fundamentals, a growing and
young population, a skilled educated cost competitive workforce, access to vast natural
resources, a consistent political leadership. Further, the low but rising penetration of
discretionary consumption, increasing digitization, and a new wave entrepreneurship aided
by the improved ease of doing business are also providing renewed impetus for growth.
Government has made significant push towards building infrastructure leading to $ 7.28
Lakh Cr public capital expenditure in FY 23 and has followed that up with the highest ever
outlay for public capital expenditure at $ 10 Lakh Cr earmarked for FY24. This consistent
infrastructure build will vitalize the economy in the short term and improve quality of
life in the mid to long term.
The Service sector growth was robust in fiscal 2023 and offset the moderation in
manufacturing sector. Despite external pressures, India's service exports have continued
to increase. The agricultural sector grew by 3.5%, and also strengthened the Company's
position as a net exporter of agricultural products.
In fiscal 2023, the overall growth of rural was slower than urban due to relatively
slower recovery in the rural non-agricultural sector.
RBI has been actively intervening to contain rising inflation which showed signs of
moderation by the end of the fiscal. The inflation was driven by core and food inflation
which adversely impacted the low income consumers however, there was buoyant private
consumption, particularly among higher income earners.
As India emerges as the most populous nation in the world, a milestone it will cross in
mid FY 24, it also retains its position as the fastest growing global economy. The large
demand base, strong infrastructure buildout, robust fundamentals, diversified strength
across manufacturing, services, agricultural and export sectors are poised for continued
sustenance of India growth story ahead of all global peers.
Mobility Industry Performance - India overview
In a vital step towards e-governance, VAHAN 4.0 portal, records registrations of all
automotive vehicles barring 1 state in India. This flagship project of the National
Transport project, has become a reliable indicator of automotive retail trends. Andhra
Pradesh & Madhya Pradesh states registration details started flowing in from Q2 of
2022-23. 16.1% two-wheeler industry retail growth in 2022-23 was recorded on VAHAN.
(excluding Andhra Pradesh, Madhya Pradesh & Telangana).
The VAHAN retail industry growth trends across quarters, over comparable periods year
on year saw sharp changes, Q1 2022-23 growth of 54.5% was driven primarily by the low Q1
2021-22 base, Q2 decline of 3.7%, however there was a positive inflation, as Q3 and Q4
2022-23 grew by 13.5% and 10.7% respectively.
The two-wheeler Industry wholesale stood at 15.5 million units compared to 13.4 million
units in last fiscal. While this reflects a growth of 15.5%, it should also been in the
context that this is still less than the 8 years ago level of 16 million units in 2014-15
and a long way off from Industry high of 21.2 million in 2018-19. This juxtaposition
reflects both the healthy growth momentum and the ample headroom for future growth.
Compared to the Industry growth of 15.5%, the Company recorded a growth of 22.8%.
Mobility Industry Performance - International Business overview
In the International Business, Industry exports of two-wheelers in 2022-23 were at 3.65
million units, a decline of 18% over 2021-22. The Company out performed the industry,
however declined by 16%. The industry was affected by liquidity crunch, currency
devaluations and country specific local socio- political and economic disturbances.
In terms of movement across the quarters, the year began with Q1 2022-23 showing small
positive growth which progressively weakened each quarter, as more of the headwinds across
geographies mounted. This led to lowered exports to these markets. We are circumspect yet
optimistic that while its taking longer than expected, but by the second half of the
forthcoming fiscal the industry will find its way back to a growth trajectory. The
Company's two wheeler exports stood at 0.91 million units down from 1.09 million in the
previous year. Three-wheeler exports during the year reached 1.53 lakh units, a decline of
6.1% compared to 2021-22.
Mobility Industry Performance - Electric Vehicles (EV) Overview
The two wheeler EV retail Industry on VAHAN reached 7.18 lakh units FY 2023-24 up from
2.3 lakh units of FY 2022-23 that is a fix growth over last year. The penetration of EV
two wheelers for the year stood at 4.7%, with exit of 5.4% for Q4 2022-23.
The consumer demand remained overwhelmingly in favour of the scooter format.
In course of the year, there was a consistent policy and regulatory interventions to
ensure standardized quality and enhanced safety levels for the consumers. This also led to
the formalization of the industry, and the result product mix moved from low quality, low
cost options in favour of the offerings meeting quality and safety requirements. The
accelerated pace of EV adoption as witnessed by the fix growth in industry volumes have
been driven by the support extended in form of FAME II and PLI support from the Central
Government. In addition, state specific support policies have also been rolled out by the
State Governments. The vision of accelerated EV adoption is being driven by the government
and the Company is responding with investments in technology and building capacity to help
realize this vision. The Company retailed 0.91 lakh units vehicles for the year with a
~10x growth. In Q4 2022-23 approximately 1 in 5 EV two wheelers retailed was a TVS iQUBE.
The Company increased its geographical presence to 130 towns, while its ICE distribution
network covers 600+ towns. The phased expansion is to ensure that the Company's customer
receives the intended usage experience. In this year, through a series of ecosystem
partnerships the public charging network available to TVS iQUBE owners now exceeds 2000.
In a short time, the Company has cumulative of over 1 lac delighted customers.
New Product Launches
The Company's new product launches have been well received by consumers, experts and
trade.
In July '22, the Company launched TVS Ronin in a segment of its own to cater to the
#unscripted new-age rider. It's a 225cc lifestyle motorcycle which refuses to be typecast
in any segment.
The Company clocked a global sales milestone of 5 million units for the TVS Apache.
In the year 2022, TVS Apache RTR 160 and RTR 180 were updated with striking style
elements and attractive graphics that are in line with its racing DNA.
TVS Racing went beyond the racetrack and right into the virtual gaming world with the
introduction of the Apache RR 310 in Gameloft's Asphalt 8: Airborne. Gamers and racing
enthusiasts will get to virtually ride the Apache RR 310, making it the first Indian
two-wheeler company to bring its motorcycle to a popular gaming franchise.
TVS Jupiter, clocked the Fastest Five Million milestone for the TVS Jupiter series.
A new refresh was also launched as the new TVS Jupiter Classic. TVS Jupiter was
consistently one of the top 10 selling two wheelers in India.
TVS NTORQ 125 XT was launched with TFT screen coupled with its SmartXonnect
connectivity platform including new age features like VOICE ASSIST. This has created a new
benchmark first-in-class features for its connected GenZ customers.
The Company built upon its TVS RAIDER franchise with the new TVS RAIDER SMARTXONNECT
with TFT CLUSTER. This was a truly WICKED UPDATE, and line with its new age consumers,
this became the first two wheeler in the world to be launched in the metaverse, on TVS
Motor's proprietary metaverse platform, TVS Motoverse. In the second half of the year TVS
Raider has broken into the TOP 10 selling two wheeler in India.
TVS XL 100 retained it place amongst the top 10 selling two wheelers in the country.
Its continuous innovation of providing usable and relevant technology innovation to the
utility user has seen it maintain a dedicated consumer franchise.
TVS HLX series celebrates its 3 million global sales milestone. TVS HLX series has been
instrumental in transforming millions of lives across Africa and has been offering easy
mobility solutions in personal commute, motorcycle taxi and delivery segments. It has
delivered to the brand's promise of being a sturdy product that is highly reliable across
rugged terrains.
The JD Power (JDP) syndicated studies assess each of the industry offerings on JDP
APEAL (Automotive Performance Execution and Layout) and JDP IQS (Initial Quality Study).
the Company has been adjudged No. 1 in ICE Scooter and Motorcycle in the JDP APEAL study.
The Company has been adjudged No. 1 in Scooter and No. 2 in Motorcycle in the JDP IQS
study. The Company continued its winning streak of over 8 years.
These new offerings, with TVS DNA of customer-centric innovation and quality, ensured,
that they have become the most awarded launches in their respective categories. TVS Ronin
was recognised at various fora in categories like "Bike of the Year" and
"Roadster of the Year". TVS Jupiter 125 was awarded "Scooter of the
Year". TVS electric scooter iQUBE was awarded as "The Green two-wheeler of the
year" by Autocar.
BMW Association
The BMW association has crossed its 10 year milestone. A cumulative sale of 1.4 lakh
units have been jointly achieved. The offerings have enabled BMW to access newer markets
and younger consumer cohorts. This partnership was further strengthened in 2021 with the
expansion of the Cooperation Agreement for Future Technologies and Electric Vehicles.
Company's scope includes the design and development of future BMW Motorrad products and
delivering world-class quality, supply chain management and industrialisation. Under this
enhanced cooperation, both companies have identified a range of products and technologies
to deliver significant business benefits.
Corporate Social Responsibility
The Company recognizes social responsibility as an integral and a critical part of its
value system. Through its CSR arm, the Srinivasan Services Trust (SST) the Company has
been successfully driving positive change in rural communities in the areas of Health,
Education, Environment and Economic Empowerment. SST has a matured model centred on
community participation in all its projects. It also brings the practices of Total Quality
Management (TQM) to cooperatives and Self Help Groups (SHGs) empowering them to improve
quality. This allows them to find newer markets, better prices and hence enabling local
job creation and enhanced prosperity in a sustainable manner.
It follows an integrated, holistic and participatory approach to village development,
women empowerment, working very closely with the communities and the Government for
sustainable development in villages. So far in the last 27 years, across the working areas
of SST, more than 60,000 women have been organized into SHGs, 2,500 village government
infrastructures have been repaired and renovated and 350 water conservation projects
including desilting of tanks and irrigation channels have been implemented.
SST has won the FICCI CSR AWARDS 2022 for "Fight against COVID - 19" during
the year. The FICCI (Federation of Indian Chambers of Commerce & Industry) CSR Awards
recognize individuals and organizations that have made significant contributions to
India's development and growth. The Company is the First Indian 2W & 3W maker to have
become a signatory to the world's largest sustainability initiative, the United Nations
Global Compact (UNGC). This will ensure enhanced collaborations and actions towards wider
development of goals, particularly the Sustainable Development Goals (SDGs).
Cost & Price Management
It was only in the second half of the year, that there was broader softening in the
commodity cost shocks and in semi-conductor availability. The Company however, was able to
alleviate most, though not all, of the margin pressures through active cost management and
targeted premium realisations in specific categories. Due to its continuous and structured
approach of derisking through alternate sourcing, the semi-conductor availability issues
were mitigated early. Premiumisation across all product categories and improving the
product mix in favour of premium segments led to improvement in realisation. In spite of
all headwinds the Company was able to deliver all time high profit performance.
2. FINANCIAL HIGHLIGHTS
Details |
Year ended 31-03-2023 |
Year ended 31-03-2022 |
SALES |
|
|
Quantitative (Numbers in lakhs) |
|
|
Motorcycles |
17.33 |
17.32 |
Mopeds |
4.46 |
4.83 |
Scooters |
13.34 |
9.23 |
Three Wheelers |
1.69 |
1.72 |
Total vehicles sold |
36.82 |
33.10 |
Financials (Rupees in Crores) |
|
|
Revenue from operations |
26,378.09 |
20,790.51 |
Other Income |
100.57 |
18.99 |
Profit / loss before Depreciation, |
|
|
Finance Costs, Exceptional items and Tax Expense |
2,775.26 |
1,980.73 |
Less: |
|
|
Depreciation / Amortization / |
|
|
Impairment |
631.23 |
611.44 |
Profit / loss before Finance |
|
|
Costs, Exceptional items and |
|
|
Tax Expense |
2,144.03 |
1,369.29 |
Less: Finance Costs |
140.66 |
125.92 |
Profit / loss before Exceptional items and Tax Expense |
2,003.37 |
1,243.37 |
Add / (less): Exceptional items |
|
(30.16) |
Profit / loss before Tax Expense |
2,003.37 |
1,213.21 |
Less: Tax Expense (Current & |
|
|
Deferred) |
512.34 |
319.65 |
Profit / loss after Tax |
1,491.03 |
893.56 |
Total Comprehensive Income / loss |
(27.68) |
(64.31) |
Total |
1,463.35 |
829.25 |
Less: Dividend on Equity Shares |
237.54 |
178.16 |
Balance carried forward |
1,225.81 |
651.09 |
3. DIVIDEND
The Board of Directors of the Company (the Board) at their meeting held on 24th January
2023, declared an interim dividend of $ 5/- per share (500%) on 47,50,87,114 equity shares
of $ 1/- each for the year 2022-23 absorbing a sum of $ 237.54 Cr. The same was paid on
9th February 2023. The Board does not recommend any further dividend for the year under
consideration. The dividend pay-out is in accordance with the Company's Dividend
Distribution Policy. The Board is not considering any transfer of amount to General
Reserves for the year under review, as it is not mandatorily required.
4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
INDUSTRY STRUCTURE AND DEVELOPMENTS
Two-wheeler
The domestic two-wheeler ICE industry posted a sale of 15.5 Mn units in 2022-23, with a
growth of 15.5% from 13.4 Mn units in 2021-22.
The dispatch industry growth trends across quarters, over comparable periods year on
year saw sharp changes, Q1 2022-23 growth of 52.8% was driven primarily by the low base of
Q1 2021-22, followed by Q2 2022-2023 growth of 11.7%, Q3 2022-23 and Q4 2022-23 grew by
5.3% and 4.5% respectively.
The ICE scooter industry grew by 21.9%, 4.86 Mn units sold in 2022-23 compared to 3.98
Mn units in 2021-22. The category share came up to 31.3% from 29.7% in FY 2022-23. This
was led by a strong pick up in urban demand with uptick in economic activities and opening
of schools and offices in urban centres. The Motorcycle industry grew by 13.9% over last
year and reached a category share of 65.8% down from 66.8% of last year.
Although Premium motorcycles industry declined in Q1 of 2022-23 impacted by
semi-conductor shortages, but as these challenges were mitigated the industry rebounded to
post a growth of 16.6% for the year 2022-23 over 2021-22. Premium motorcycle sales was
1.21 Mn units in 2022-23 compared to 1.04 Mn units in 2021-22. The category share
moderately increased to 7.8% from 7.7% of 2021-22.
Commuter motorcycle volumes increased by 10.6% to 7.91 Mn in 2022-23 from 7.16 Mn units
in 2021-22. The category share continued to be a dominant 51% of the two wheeler industry.
This resilient category share is a clear indicator of the critical role played by this
segment in meeting India's mobility needs. The growth was driven by the Executive segment
in Commuter motorcycles which has greater skew to relatively affluent customers and urban
skew as opposed to the economy motorcycle segment.
The Economy motorcycles and mopeds, showed a muted demand growth as they have been the
most severely impacted by the rising vehicle and fuel prices. These customer segments are
yet to fully recover from depleted savings. These segment of customers also have a higher
dependence on rural economy. While the rural agricultural segment saw a healthy growth of
3.5%, the rural non-agrarian economy remained muted.
Three-wheeler
The overall three-wheeler small passenger industry (3 plus 1 segment) declined by 5.0%
in 2022-23 (from 5.82 lakh units in 2021-22 to 5.53 lakh units in 2022-23). The domestic
small passenger industry doubled over a low base. Exports market declined by 26% in
2022-23 over last year.
Electric two-wheelers
The penetration of EV two wheelers for the year stood at 4.7%, with exit of 5.4% for Q4
2022-23.
The heightened consumer interest is driven by the attractive Total Cost of Operation
(TCO) and technology proposition that EVs offer. This is made even more relevant with
increasing fuel prices.
However, fix growth in industry volumes, this accelerated pace of EV adoption has been
made possible by the FAME II and PLI support from the Central Government. In addition,
state specific support policies have also been rolled out by the State Governments.
The enhanced safety, localization and quality norms have a threefold impact. First,
they enhance the quality of products received by the customers. Second they aid the
formalization of the sector, ensuring quality players. Thirdly, product quality is on par
with global levels, enabling the industry to export overseas. Like in ICE two wheelers,
India will emerge as a major hub for EV two wheeler exports in addition to the large
domestic market.
BUSINESS OUTLOOK & OVERVIEW
As we step into fiscal 2024, the Company maintains its cautiously optimistic view to
the future. GDP growth for fiscal 2024 is expected to be around 5.5% by various sources,
in spite of the difference in the specific forecast, the almost common agreement is that
India GDP growth will remain highest among all major economies.
This performance would be based on underlying socioeconomic fundamentals with active
policy management. Some of the key active drivers would be :
Pick-up in urban discretionary consumption demand especially on services such as
travel, tourism, and hospitality.
Improving consumer sentiment as indicated by RBI's
Consumer Confidence survey.
Moderate global crude oil prices.
Higher disposable income among mid-income group by introducing tax reforms driving
higher consumption.
Improved investment climate for economies with well-regulated banking and financial
markets like India.
Highest ever capex outlay of $ 10L Cr in the Central Government budget FY24.
The focus of the Union Budget for fiscal 2024 on increasing Capital Expenditure (CapEx)
along with reducing fiscal deficit, creates a platform for higher growth with lower future
liabilities. The lift in the consumption cycle is tied to broad based pickup in economic
activity, which the Indian Government is supporting through focus on investments.
Rural recovery continues to be slow and this significantly impacts the growth
trajectory of the economy. El-Nino arriving early and affecting monsoon may lead to a
weaker performance of the rural agricultural sector impacting the already weakened rural
demand. Domestic Moped and Economy motorcycle segments have seen constrained demand due to
weak performance in the rural non-agricultural sector, a poor monsoon could further
adversely impact demand.
Company is positive about the performance of the Premium motorcycle segment and scooter
segment with improved urban demand.
Over the long term, the Indian economy is expected to increase by ~2.5x to $6.5
trillion by 2030, with a real GDP growth rate in the range of 6-6.5%. Per capita income
and vehicle ownership is expected to double by 2030, ushered in by formalization,
digitization and urbanization.
The improving road infrastructure and economic environment with our current mass
transit systems will further drive the demand for mobility for the masses. This demand is
today best served by the 2-wheeler segment, making its fundamentals very attractive
considering a resurgent India. Export of two-wheelers is likely to see a growth during the
year after the weak performance in 2022-23. The Africa market is expected to perform
better in 2023-24 recovering from the global slowdown and with moderation of inflation.
Expansion programs in LATAM, ASEAN and Middle East will add further momentum. Falling
freight rates and better availability of containers are likely to support exports from
India this year.
Overall the India long term growth trajectory is based on a few persistent and unique
but socio economic assets or drivers:
A large population supporting the domestic demand
A growing and youthful skilled educated cost competitive workforce
A vibrant private sector with large enterprises and MSMEs eager for growth
Access to vast natural resources
A consistent political leadership
Rising penetration of discretionary consumption
Rapid adoption of digitization across all strata of society increasing velocity through
reducing wastage
A new wave of entrepreneurship aided by the improved ease of doing business.
Due to the above fundamentals and its strong product lineup, unwavering focus on
consumer, quality, cost, the Company is confident going into FY 2023-24.
Electric two-wheeler
The EV industry will continue to grow rapidly as the consumer interest is buttressed
with active policy support from the Central and State Governments through PLI, FAME II and
State specific support policies. Continued support will ensure a smooth lift off for the
industry volumes.
The Company will deliver the "power of choice" as we enhance our offerings to
provide relevant options to new consumer cohorts, in doing so, expand the portfolio to new
variants within iQUBE and introduce new brands. This portfolio expansion will also see
introduction of new innovative features and technology. The choice will be made available
in new geographies within India, beyond the current 130 towns, and outside India as the
Company's EV exports kick in. All of this, would be also see a steady increase in the
ecosystem presence and the 2000 plus public charging options grow further.
In addition, with the strategic association with BMW, the Company is involved in joint
design and development of urban EV options for the global markets.
New Product Launches and Initiatives
During the year 2022-23, the following new products and variants were launched.
TVS RONIN:
Launch - TVS first entry in the Classic/ Retro space TVS RONIN, launched in July '22 to
cater the requirements of a #unscripted new-age rider, it has been a category builder and
refuses to be slotted in an existing framework. The bike has cutting-edge features like
rain and urban riding modes, dual channel ABS, a 3-step adjustable lever, gold-toned USD
front forks, all LED lamps, a fully connected asymmetric digital speedometer, voice
assist, and more. Along with that, it has been winning hearts with its retro design.
TVS RONIN has also created a community of like-minded people and call it the TVS RONIN
CuLT which is adding to the ownership experience. Here the riders experience varied
cultures, explore different lifestyles and travel to the most #Unscripted places. All this
is done through #Unscripted breakfast rides, overnight rides and marquee rides.
TVS Apache:
TVS Apache RTR 160/180 Refresh, RTR 160 4V Special Edition Launch Designed as "The
All-New Racer's Choice", the 2022 TVS Apache RTR 160 and RTR 180 are updated with
striking style elements and attractive graphics that are in line with its racing DNA. The
motorcycles also get segment leading features like an all-new LED head lamp and tail lamp.
The power increase coupled with weight reduction has resulted in an enhanced
power-to-weight ratio, offering an unravelling riding experience.
Building on the unparalleled trust of TVS Apache customers, the thoroughbred race
derived Apache RTR 160 4V launched its special edition. Inbuilt with features that are
pinnacle of performance and technology along with new dual tone colour and sporty bullpup
exhaust with powerful throatier note. The increased power-to-weight ratio adds cherry to
the cake.
TVS Raider SmartXonnect:
The motorcycle comes with first-in-segment features such as TFT display. The wicked
ride now offers a slew of new age features like a segment first 5 inch TFT cluster and
advanced connectivity tech like Bluetooth connectivity, navigation assist, voice assist,
ride reports and call alerts. This along with its distinctly naked street style, high
performance engine, delivering best-in-class acceleration, is committed to continue
delighting its customers with connected features as well.
TVS Raider Uniseat:
TVS Raider, India's most award-winning 125 cc motorcycle, has continuously lived up to
its promise of being a thrilling ride with cutting-edge technology, exceptional
performance and sporty style. There was sustained interest from young families and they
were seeking a Uniseat option for family riding comfort. TVS RAIDER DISC WITH UNISEAT,
which comes with two colour options, red and black. Similar to the existing disc variant,
TVS Raider disc uniseat also boasts a striking animalistic LED headlamp, front disc brake,
ride modes and reverse LCD cluster. With the introduction of the new Raider disc uniseat
the riders now have additional options to choose from for their wicked ride.
NTORQ XT:
The new variant TVS NTORQ 125 XT coupled with its SmartXonnect connectivity platform
created a new benchmark in the segment with first-in-class features for its connected
customers.
One of the key features of the scooter includes its segment-first hybrid SmartXonnectTM
with coloured TFT and LCD console. This, along with a host of other 60+ hi-tech features,
makes the new TVS NTORQ 125 XT, the most tech-advanced scooter on sale in the country. The
first-of-its-kind Voice Assist feature can now accept voice commands directly. The scooter
also features the TVS IntelliGO technology with silent, smooth, and superior start-stop
function. Additionally, it has lighter, sportier alloy wheel enabling to deliver enhanced
vehicle performance and fuel-saving.
NTORQ Race Edition:
TVS NTORQ 125 Race Edition launched in Marine Blue colour. The TVS NTORQ 125 Race
Edition Marine Blue will come packed with the best features of the Race Edition series. 60
Connected Features Powered by TVS SmartXonnect 0-60 in 9.2 seconds 3-valve 125 CVTi-Revv
Engine stealth aircraft inspired styling among many others.
Jupiter Classic:
TVS Jupiter celebrated "Fastest Five Million Vehicles On Road" milestone with
the launch of the New TVS Jupiter Classic.
The TVS Jupiter Classic gets a premium rendition with black theme across its mirror
highlights, fender garnish, tinted visor, and a 3D black premium logo. It also gets
handlebar ends, diamond cut alloy wheels, and rich dark brown inner panels. In keeping
with the theme, it comes with premium suede leatherette seats with back rest. The decals,
dial art depict the timeless classic charm. This variant is decked out in two exclusive
colours Mystic Grey and Regal Purple. Staying true to the philosophy of Zyada ka Fayda,
the variant delivers the promise of Zyada safety with disc brakes & engine kill switch
and Zyada convenience with all-in-one lock, USB charger and pillion back rest making it a
unique offering with style and substance.
Radeon Digi Cluster:
TVS Radeon has delighted customers with its excellent performance, best in class
features and strong customer-centric designs. TVS Radeon comes with next-gen Eco thrust
Fuel injection (ET-Fi) technology, which delivers 15% better mileage and enhanced engine
performance, better durability, and a smoother riding experience.
TVS Motor Company launched a New TVS Radeon with 1st in segment Reverse LCD Cluster
with Real-Time Mileage Indicator (RTMI). The new TVS Radeon is India's 1st 110 cc
motorcycle to flaunt the multi-colour reverse LCD Cluster. Class-leading Reverse LCD
cluster comes with Real-Time Mileage Indicator (RTMi) feature, which enables the user to
control the mileage according to riding conditions. Apart from RTMi, there are 17 other
useful features in-built into the digital cluster like Clock, Service indicator, Low
battery indicator, Top Speed & Average speed.
TVS Radeon ensures the comfort for the long-distance riders owing to its longest seat
in the category and a host of practical features including a USB charger. It also comes
loaded with distinct Premium chrome headlamp, chrome rear view mirrors, front disc brakes
and robust thigh pad design.
TVS Sport:
TVS Sport - MILEAGE KA BAAP introduced new ELS. As the record holder on mileage, the
promise of mileage and remains intact, some of the key features of this new variant are:
All Gear Electric Start, Fresh Colour Options All Black & All Grey, Long Seat, Black
Alloy Wheels, Premium 3D chrome logo. Within 6 months of launch the new variant has sold
61k units. This delivers on its core proposition for the economy segment of an Electric
Start with unbeatable mileage at an unbelievable price.
ELECTRIC - TVS iQUBE
Launched in January 2020, The iQUBE has been lauded on its dependable performance,
reliable range, and silent comfortable driving experience. The connected features like
turn-by-turn navigation, live charge status, geo fencing and multiple vehicle function
alerts, along with the convenience of a carry along charger, have also made everyday
commute much more comfortable and worry free.
The iQUBE brand was expanded into 3 offerings - the iQUBE, iQUBE S and iQUBE ST in May
2022, and was received with great excitement. The iQUBE has also expanded its presence to
130+ towns and 230+ dealers across India that offer sales and after sales service for
iQUBE.
The iQUBE S was acknowledged as the "Green scooter of the year" by Autocar
India.
Domestic Sales
The Company achieved sales of 25.01 lakh units against 20.37 lakh units of two-wheeler
ICE in the domestic market compared to sales of 20.3 lakh units in 2021-22. The Company
outperformed the broader Industry which increased by 15.5%.
In domestic motorcycles, Company achieved sales of 9.1 lakh units and registered a
growth of 28.7% over 2021-22. The premium segment was affected by semiconductor shortages
early in the year which the Company overcame and logged in 3.46 lakh units of sale
primarily in the TVS Apache series. The Company sold 5.56 lakh units of commuter
motorcycles in 2022-23 which is growth of 48% over 2021-22. The TVS Raider is the flagship
executive motorcycle offering and was the primary growth driver.
In domestic scooters, the Company achieved sales of 11.49 lakh units with TVS scooters
growth of 34.3%. The Jupiter brand was the primary growth driver.
International Business sales - two-wheeler and three-wheeler
The Company's two-wheeler exports in 2022-23 were 9.15 lakh units, a decline of 16%
over 2021-22 due to global industry slowdown.
Three-wheeler exports during the year reached 1.53 lakh units, a decline of 6% over
2021-22.
RISKS AND CONCERNS
Environmental & Geopolitical Factors:
The geo political strife that emerged last year, though localized, had global
ramifications. This situation remains persistent and unresolved. This spectre of strife
hangs over the global economy and trade. Any escalation or delayed resolution would impact
global liquidity, food and energy demand supply. These could adversely impact many low
income and emerging markets. Even though the India story remains buoyant, the speed of
growth may be impacted by global factors.
The global liquidity and inflationary trends could also lead to slowdown in private
investments and consumption. These could adversely impact the global economy and slow down
the Indian recovery. The Indian urban consumption which has seen a smart recovery may be
susceptible to challenges on liquidity, especially in the emerging start up ecosystem. In
international business, there is risk of slower than expected recovery due to currency
depreciation, inflation, forex shortage and socio-political turmoil in select geographies.
Additionally, the two and three wheeler export industry is influenced by changing
regulatory policies in some markets like Egypt and Iraq.
Strong two wheeler markets like Sri Lanka, Bangladesh, Afghanistan and Myanmar are
taking longer than expected time for recovery, owing to one or more country specific
factors.
Supply Side Factors
The broader risk of supply chain disturbances is expected to be lower than previous
years. However, some EV specific components may continue to face challenges leading to
delayed service levels and impacted financial performance. The Company manages a
diversified, multi-source, global supply chain. Any new developments arising out of geo
political strife, which impact the global supply chain, causing short-term or mid-term
disruptions in the supply of essential raw materials or utilities could also have an
impact.
Demand Side Factors
Demand growth in India will need to be preceded by an improvement in consumer
sentiment. The consumer sentiment index, though on the mend, is yet to recover to
pre-COVID levels. This could be adversely impacted by slower than projected GDP growth.
The consumption demand may also be impacted by persistent high inflation directly and by
raising of interest rates by RBI to counter inflation.
Monsoon still delivers majority of the irrigation needs of Indian agriculture. This
year due to predicted El-Nino conditions if the monsoons are less than normal, this could
significantly impact and delay recovery in rural demand further.
A large section of the Indian two wheeler buyers rely on retail finance to access their
mobility needs. Any increase in cost of credit could impact two wheeler Sales. Over the
last few years a combination of factors have led to anywhere between 35 - 45 % increase in
the price of two wheeler in India. This affordability challenge has already impacted
demand. The low and mid segment of the market have low headroom for further price
increases. Any further price increases would have further demand ramifications. Country
specific retail prices may be adversely impacted by currency devaluations due to global
inflation, supply disruptions and liquidity situation.
RISK MANAGEMENT POLICY
Company's 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 Company's target.
As a process, risks associated with the business are identified and prioritized based
on the Company's 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 Company's 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.
OPERATIONS REVIEW
Total Quality Management (TQM)
Total Quality Management (TQM) continues to be the key focus in the organization for
performance excellence and to mitigate the business risks amidst an uncertain industry
environment. This consistency has ensured the organization stays steadfast on its the
growth path over the years. Digitalisation and analytics initiatives are used to
continuously improve customer experience processes, and forecasting accuracy in the front
end. The Company maintains a lean stock with trade and employs a cash and carry system to
ensure freshness of stocks for consumers and enhanced profitability for its extended
enterprise, the channel partners. Periodic Change management workshops are conducted by
senior management with dealer partners to strengthen the culture of Process for Results,
executional excellence through rigorous Daily Work Management towards achieving
breakthrough targets on customer satisfaction, market share and profits.
Supplier excellence team is a continuous program to institutionalize the TVS production
system amongst suppliers. The objective is to improve maturity levels, Quality and
Delivery performance ratings of selected prioritized suppliers through establishing
sustainable manufacturing system and focused war on waste. New age tools like Vision AI
and predictive maintenance algorithms are some of the best practices being horizontally
deployed. This program will be extended to an expanded number of suppliers this year. CoP
(Community of Practice) groups are informally bound together by shared expertise and
passion in a specific area. CoPs of OR, TRIZ and Taguchi methods are being leveraged to
drive strategy, solve complex problems quickly, optimise solutions, transfer best
practices, develop professional skills and competencies across the Company. CoP projects
are aligned towards achievement of business objectives. Total Employee Involvement culture
was significantly permeated towards profitability of the organization by promoting 'Profit
Improvement Plan' initiatives. Theme of 'waste elimination' in areas of inventory
management and asset management helped the Company to significantly enhance working
capital management.
Cost Management
The Company is committed to delivering a value intensive offering to the consumers.
This ensures that the Company continually focus on aggressive waste elimination with
quality upgradation through value engineering, modularity, light weighting, alternate
material, alternate sourcing, localization and process innovation. This is done not only
within the Company but across the entire supply chain, via productivity improvements and
process improvements and low cost automation.
The Company's focus is reflected by each of its employees leading to one of the most
prolific Employees suggestion programme, in the industry. Workmen, executives and managers
significantly focused on implementing cost reduction towards operational improvements and
waste elimination during the year.
In the area of fixed cost increasing digitalization of internal processes are employed
to eliminate waste and enhance speed.
This rigorous focus on cost management has allowed the Company to withstand the
commodity price inflation, and yet deliver its highest ever profit performance while
delighting consumers as evidenced in the JD Power APEAL and IQS study wins.
Research and Development
The Company has a strong philosophy of Design, Technology and is committed to
"Make in India". The Company is continually investing in building upon its world
class in-house skill set on technology research, product design and development. The
Company prioritizes building core technology for EV, such as battery, e-power train,
controller. The Company also recognizes that the future is connected and hence is
significantly building capabilities in Telematics, OTA, smart connected cluster &
infotainment, connected services, cyber security, and Software product platform. The
Company's R&D retains its key focus on in-depth customer understanding, technology
development and design innovations, while adding an agile, vigorous trans disciplinary
approach towards creating the future of mobility solutions led by cutting-edge, deep
technology innovations. This is evidenced by more than 900 cumulative domestic patents
granted. The Company's R&D remains one of the most prolific generator of innovations
patents, not only in India but globally.
In 2022-23, TVS R&D demonstrated prowess in new launches TVS Ronin and upgraded
generation of smart electric scooter platform TVS iQube.
TVS Ronin is a motorcycle with Glide through technology, modern functionality, ride
modes, energetic, state-of-the-art-connectivity and mood ready performance, that created a
new genre of motorcycling.
TVS iQube is a smart electric scooter platform with three variants that offer a variety
of capabilities like additional range, TFT touchscreen, Alexa integration, OTA update,
extra storage space and bright colours. Refresh and upgrades with enhanced features are
also launched to improve customer experiences in entire range of the Company's products.
The R&D team is working on several cutting-edge technologies for the near- and
long-term requirements of the Company's business plans considering emerging mobility
needs, superior customer experience, advanced safety systems and sustainability. Research
focus is aligned to chosen fields of science and engineering in order to be 22 future
ready. The Company also actively participates in the development of the supply chain in
India.
TVS Racing, an arm of the R&D department, had a very successful season 2022 with
95% podium finish in all the races it participated. It created records through the debut
of Asia One-Make championship, with a homegrown development of a special racing bike. The
Company benefits immensely from the close collaboration between the racing team engineers
and product development engineers in developing cutting-edge products and relevant
technologies using Motor sports as a greater opportunity.
Digital and AI Technologies
The Company considers Digital & AI as a key organization wide accountability area.
Currently, it prioritizes digitalizing the Company's operations in customer experience,
sales and retail management, manufacturing and supply chain, new product introduction and
enterprise functions. The Company embarked the TVSX verse program which focus on several
opportunities to map and improve customer journeys, experience and consequently revenue.
The Company is prioritizing activation of these projects in 2023-24. Further, the Company
is expanding to Xverse phase 2 this year to include three-wheeler, commercial and
international business customers.
Customer-facing digital assets were significantly strengthened in 2022-23. Improving
the effectiveness of engaging and converting digital prospects. The Company leveraged AI
tools such as lead classification engines and recommender systems, in conjunction with
designed experiments, were fine-tuned to increase sales volumes. Similar initiatives were
also undertaken in the after sales area. Vehicle service volumes increased through usage
of new age tools like WhatsApp based chatbot for service booking and through AI deployment
in service prediction models. Further, the Company revamped its digital assets and
algorithms for the parts segments and strengthened its channel partner systems to improve
parts sales and operations performance.
Having completed the industry 4.0 maturity assessment in 2022-23, the Company is
implementing the Sales and Operations (S&OP) program in 2023-24 through a new software
and associated process reengineering. The Company has started a multi-year NPI
digitalization program to improve time to market of its new products. Further, the Company
strengthened its usage of computer vision AI to detect quality issues in several areas
like packaging, engine assembly conveyor uptime and painting effectiveness. Business
operations workflows across the organizations are being automated or supported with modern
applications increasing their efficiency and quality.
Both IT and OT security were improved in line with its plans on information security
governance. The Company continued to leverage the cyber-security governance council,
consisting of senior management and industry experts, to expand the coverage of cyber
defences and has integrated this with the data privacy program for coordinated capability
improvements for itself and the group companies. Similarly, the Company also leveraged its
digital and AI capabilities to improve the operations of its subsidiaries. SAP ERP was
implemented for The Norton Motorcycle Co Limited, UK and being modernized for Swiss
E-Mobility Group (Holding) AG, Switzerland (SEMG), Product lifecycle management software
is being upgraded for Norton. Websites of EGO movement and SEMG, are being fine-tuned for
the sales season. In 2022-23, the Company is integrating its digital and AI investments to
holistically enable capabilities for the group wide digital transformation.
INTERNAL CONTROL AND THEIR ADEQUACY
The Board is accountable for evaluating and approving the effectiveness of the internal
controls, including financial, operational and compliance. 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 through the use
of new technologies that impact the financial controls and reporting enterprise risk. 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 an independent audit firm
as well as 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.
Environment, Occupational Health & Safety:
In recognition of the Company's efforts on Environment protection, Government of Tamil
Nadu & Tamil Nadu Pollution Control Board (TNPCB), have awarded the Company's Hosur
plant the "Green Champion Award". Company's Mysuru Plant has won State Level
Safety Award and District Level Safety Award for 2022-23, from the Department of Factories
Boilers Industrial Safety and Health, Government of Karnataka. Additionally, the Company
has been awarded the "Sustainability 4.0: Challengers Award-Mega Large Business,
Automotive sector" by Frost & Sullivan and TERI. Hosur plant was assessed for
Sustainability by BMW team and summarised the outcome as - "Very positive overall
picture".
Company's manufacturing facilities at Hosur, Mysuru & Nalagarh have been certified
under "Integrated Management System" of ISO 14001:2015 & ISO 45001:2018.
These facilities are also certified under "Social Accountability Standard", SA
8000: 2014. Canteen facilities at Hosur & Mysuru plant are certified under Food Safety
Management system, ISO 22000:2018.
Water conservation measures taken up by the Company has resulted in 12% reduction of
specific water consumption with reference to previous year. The Company's approach has
been "Demand side Water management" which best utilizes the available water.
During 2022-23, about 22 million litres of rainwater was directly harvested at Hosur
plant. On "World Environment Day-2022", towards preserving Biodiversity, 50
different varieties of RET (Rare, Endangered and Threatened) plant species were planted at
Hosur. Continuing its efforts towards RE-100 (Renewable Energy-100%), during FY 2022-23,
renewable power contribution of about 88% in overall share of power was achieved. Usage of
renewable energy resulted in CO2eq (Carbon dioxide equivalent) emissions reduction of
about 67,000 tonnes. Towards air pollution abatement, RTO (Regenerative Thermal Oxidizer)
was installed in 3-Wheeler plant which destroys volatile organic compounds. The waste heat
generated during the abatement process is being reutilised. Initiatives are also taken to
install "Emission Control Device" in DG sets which captures upto 70% particulate
matter.
Under Extended Producer Responsibility (EPR), 494 tonnes of post-consumer plastic waste
across India was collected & recycled. The Company continues to co-process chemical
and paint sludge at cement industries.
As part of continuous improvement in safety, 680 proactive hazard control measures have
been implemented across plants viz., equipment safety features for ROBOTs and COBOTs in
line with ISO standards, fire protection measures for battery assembly and cell storage
areas. The overall "Plant Safety Rating System" (PSRS) score, which is a lead
measure of safety performance among plants, has improved by 21%. Periodical safety
trainings have been organized and around 11,000 employees were covered on various safety
topics. This includes road safety experiential training program in which 697 employees
were trained on 2W defensive riding skills with VR simulator.
The Company collaborated with dss+ Operations Management Consulting, leaders in the
Protect, Transform, and Sustain approach, to revitalize our safety culture. The Company
has introduced the "TICK" program (Transform, Inspire, Commit, Keep-up)
throughout our organization. This initiative is led by the line leadership of the
organization to establish a strong safety governance process, develop capabilities of the
operating team, and drive change in the safety mindset of every single individual to work
safely every day." TVS Motor Company Nature Conservation Project: The bio-reserve in
the Company's campus of Hosur has been declared as OECM (Other effective area-based
conservation 23 measures) by the Govt. of India's Ministry of Environment, Forest and
Climate Change (MoEFCC) and National Biodiversity Authority of India (NBA) as well as the
United Nations Development Programme (UNDP) - the first automotive company in India and
first of any campus in Tamil Nadu to receive this award. Surveys made at this campus have
yielded 506 species of animals, (including 150 species of birds, 36 species of reptiles,
20 species of mammals and 94 species of butterflies) and 815 species of vegetation
supported by 10 water bodies.
The Company has expanded this initiative by committing that all it's manufacturing
campuses must maintain 30% green area of which 15% must be native forest. To meet this
requirement, planting of suitable native vegetation, creation of waterbodies and provision
of food (when needed) for some of the denizens, is faithfully implemented to support the
local flora and fauna. The Company has qualified dedicated Naturalist to care for and
nurture these forests and their wildlife under the guidance of a specifically appointed
Forest Consultant.
The strict emission control policies practised here only furthers the intensity of the
commitment that the Company has towards the natural environment and consequently, to the
society. This unique set-up, unusual in an industrial environment makes the plant campuses
exemplary, where, industry supports and promotes wildlife and the environment - a rare but
increasingly essential combination in today's world.
Taking this nature consciousness to the young is the driving force behind the "TVS
Greening Minds Education Programme". To further the efficacy of nature conservation
and promotion, the Company initiated the induction of Environmental Education into the
forest project in the TVS Mysore campus.
The project is being currently conducted through multiple government schools located
within accessible radius of the Company factory in Byathahalli, Mysuru. Students are
exposed to two major, critical topics during their two-year period. The program comprises
of Teacher's Orientation workshops, Student's Orientation workshops and follow-up classes.
The current programme is intended to increase the target groups' understanding of living
nature, natural resources, biodiversity conservation, pollution, and climate change. The
efforts are towards developing a positive, proactive attitude towards the protection of
the environment. The program is currently being conducted by the Centre for Environmental
Education (CEE), Bangalore, as consultant organization.
HUMAN RESOURCE DEVELOPMENT (HRD)
Constituents of Human Resources Development framework followed at the Company include
Talent Management, Employee engagement, Performance management, Talent Acquisition, Total
rewards, Learning and Development, Career & Succession planning, Organization
Development and Diversity & Inclusion.
The Company has been recognized amongst the "Best Company for Women in
India", it ranks 13th across all companies across all industries.
The Company has also been certified as a "Great Place to Work" by GPTW.
Towards delivering sustained and improved results, the HRD framework constituents
follow a structured approach. Current and future skill-based competency development is
planned and executed through both in-house and globally acclaimed programs, continuing
education, challenging project assignments and job rotation.
The Company is successfully expanding into future technology areas. The relatively new
Future Mobility vertical is building talent depth in the areas of connected services,
autonomous driving, charging technology etc.
TVS Institute of Quality & Leadership (IQL) focusses on building cultural
capabilities, collective capabilities, supporting strategy delivery and enhancing
sustainability. IQL initiated key learning solutions such as courses for future mobility,
Communities of Practice (CoPs) for business impact in strategic areas, leveraging digital
technologies for skill training, dojo centre for collective capability and Conferences to
enhance momentum for learning as a community. The Academy for Pedagogical Excellence was
launched this year to develop capability for creating superior learning engagement,
learning effectiveness, role effectiveness, future readiness, and business impact. TVS
Institute of Quality & Leadership (IQL) was awarded the Performance Level
Certification by the Global Council of Corporate Universities (Global CCU) through an
onsite audit during September 2022. Only 8 Corporate Universities across the globe have
achieved this distinction The Company expanded its usage of TVS Sampark, the mobile super
application for its employees, by adding several self-serve and learning modules. It
further strengthened employee experience through additional capabilities enabled through
collaboration and cloud software.
The Company is committed to creating a psychologically safe workplace and has partnered
with 'NIMHANS' and 'Your Dost' to curate Employee Assistance Programme (EAP) offering
employees and families to confidentially discuss the subjects concerning their well-being
with industry experts.
CAUTIONARY STATEMENT
Statements in the Management Discussion and Analysis Report describing the Company's
objectives, projections, estimates and expectations may be "forward looking
statements" within the meaning of applicable securities laws and regulations. Actual
results could differ materially from those expressed or implied. Important factors that
could make a difference to the Company's operations include, 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 Statues and incidental factors.
5. DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 (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 2023,
the applicable Accounting Standards had been followed along with proper explanation
relating to material departures; ii. that the Directors had selected such accounting
policies and applied them consistently and made judgments and estimates that were
reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit of the Company for the year
under review; iii. that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the Act,
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 2023 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.
6. CORPORATE SOCIAL RESPONSIBILITY (CSR)
CSR activities have already been textured into the Company's value system through
Srinivasan Services Trust (SST), established in 1996 with the vision of building
self-reliant rural community.
Over 27 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 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. The projects / programmes undertaken by SST and other eligible Trusts are falling
within the CSR activities as specified under Schedule VII to the Act, 2013.
Based on the recommendation of the CSR Committee, the Board has approved the
projects/programmes carried out as CSR for an amount of $ 19 Cr for 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 2022-23 and the Company has met the
CSR spending through SST. CFO of the Company has also ensured the spending through SST
for FY 2022-23. The work, SST has been doing, has matured into a model centered on
community participation in all its projects. SST's focus is to bring about sustainable
development in villages. The key focus areas are women empowerment, repairing and
renovating the village government infrastructure like the balwadis, primary schools,
health centres and veterinary centres, creation of water conservation structures,
desilting of water bodies and preserving the environment. SST encourages the community to
alter their attitudes and take ownership of changes that bring about lasting development.
To bring in expertise in specific intervention areas like education, health and hygiene,
SST is working in collaboration with organizations like Agastya International Foundation,
Villmart, Navsahyog Foundation, Gramalaya. All of the projects undertaken through SST, are
within the limit of $ 1 Cr individually and do not require impact assessment.
However, an impact study carried out by Institute of Rural Management (IRMA), Anand has
revealed that in the villages in Tiruvannamalai district, where SST has been working,
shows an household income growth of about 141% in 5 years (2017-2022) as compared only to
a 38% household income growth in neighbouring areas.
The study also highlights the overall behavioural changes in the community in their
approach to development in being more independent and adopting sustainable approaches
rather than over dependence on external factors to bring about the change.
Another study by the Centre for Water Resources (CWR), Anna University on 3 minor
irrigation (MI) tanks in Krishnagiri, Tiruvannamalai and Tirunelveli districts revealed
that partial desilting of water bodies has made the water available for more than one
cropping season 79% of farmers adopted changes in the cropping pattern and cultivating
more than one season. The underground water storage capacity has improved and there is an
increase in water level in bore wells and open wells in the area.
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 the CSR Committee
and approved by the Board for the financial year 2022-23 are given by way of Annexure IV
attached to this Report.
It may also be noted that the CSR Committee has approved the projects or programmes to
be undertaken by the SST and other eligible trusts for the year 2023-24, preferably in
local areas including the manner of execution, modalities of utilisation of funds and
implementation schedules and also monitoring and reporting mechanism for the projects or
programmes, as required under the Companies Amendment Act, 2020.
7. FINANCIAL PERFORMANCE OF SUBSIDIARIES & ASSOCIATES
Acquisitions
During the year under review, the Company has acquired 70% stake in EBCO Limited, UK,
dedicated for producing and distributing electric bikes designed for the rapidly expanding
British e-bike market, through TVS Motor (Singapore) Pte Ltd. on 1st April 2022 and 100%
stake in Alexand'RoEdouard'O Passion V?loS?rl ("Passion V?lo"), primarily
engaged in the sale of e-bikes as well as e-bike accessories, through Swiss E-Mobility
Group (Holding) AG on 12th April 2022.
The Company has also acquired 48.27% stake in DriveX Mobility Private Limited,
Coimbatore on 15th October 2022, engaged in selling, trading, and distributing pre-owned
two-wheelers.
The Company has also acquired 100% stake in Celerity Motor GmbH, Germany for
undertaking activities related to two-wheeler& three-wheeler vehicles, including
Research, Development, Engineering, sales and service thereof, through TVS Motor
(Singapore) Pte Ltd. on 6th December 2022. The Company has also acquired 19.60% stake in
ION Mobility Pte Limited, Singapore, a tech and automotive OEM startup, which aims to
create and deliver aspirational and sustainable mobility and energy solutions to customers
across South-East Asia, (through TVS Motor (Singapore) Pte Ltd on 2nd February 2023).
Disinvestments
During the year under review, the Company has divested the entire shareholding in
Intellicar Telematics Private Limited (Intellicar) a wholly owned subsidiary on 24th May
2022 and thereby Intellicar and its wholly-owned subsidiary, Intellicar Singapore Pte.
Ltd., ceased as subsidiaries of the Company effective that date.
The Company has also disinvested its entire shareholding held through Sundaram Auto
Components Limited (SACL), a wholly owned subsidiary of the Company, in a material
step-down subsidiary viz., Sundaram Holding USA Inc., USA (SHUI), to Sundaram-Clayton
Limited (SCL), the holding company on 22nd September, 2022. Consequently, SHUI has ceased
as a subsidiary of SACL and also of the Company and SHUI's subsidiaries in USA viz., Green
Hills Land Holding LLC, Component Equipment Leasing LLC, Sundaram-Clayton USA LLC and
Premier Land Holding LLC also ceased as subsidiaries of the Company, effective that date.
The following companies and bodies corporate are the subsidiaries / associates of the
Company:
Subsidiaries
1. TVS Credit Services Limited (TVS CS), Chennai
2. Sundaram Auto Components Limited (SACL), Chennai
3. TVS Housing Limited, Chennai
4. TVS Motor Services Limited, Chennai
5. Intellicar Telematics Private Limited, Bengaluru (Intellicar) [upto 24.05.2022]
6. TVS Electric Mobility Ltd, Chennai
7. PT TVS Motor Company Indonesia, Jakarta.
8. TVS Motor (Singapore) Pte. Limited, Singapore (TVSM Singapore)
9. TVS Motor Company (Europe) B.V., Amsterdam
Subsidiaries of SACL (upto 22.09.2022)
10. Sundaram Holding USA Inc, Delaware, USA
11. Green Hills Land Holding LLC, South Carolina, USA 12. Components Equipment Leasing
LLC, South Carolina, USA
13. Sundaram - Clayton (USA) LLC, South Carolina, USA 14. Premier Land Holding LLC,
South Carolina, USA
Subsidiaries of TVS CS
15. Harita ARC Private Limited, Chennai
16. TVS Housing Finance Private Limited, Chennai 17. Harita Two-wheeler Mall Private
Limited, Chennai
Subsidiaries of TVSM Singapore
18. The GO Corporation, Switzerland (GO AG)
19. Swiss E-Mobility Group (Holding) AG, Switzerland (SEMG) 20. The Norton Motorcycle
Co Limited, UK
21. TVS Digital Pte Ltd, Singapore 22. EBCO Limited, UK
23. Celerity Motor GmbH, Germany (From 06.12.2022)
Subsidiaries of GO AG
24. EGO Movement, Stuttgart GmbH, Germany
Subsidiaries of SEMG
25. Swiss E-Mobility Group (Schweiz), Switzerland 26. Colag E-Mobility GmbH, Germany
27. Alexand'RoEdouard'O Passion V?loS?rl (From 12.04.2022)
Subsidiary of Intellicar
28. Intellicar Singapore Pte Ltd [upto 24.05.2022]
Associates
1. Emerald Haven Realty Limited, Chennai and its subsidiaries
2. Ultraviolette Automotive Private Limited, Bengaluru
3. Tagbox Solutions Private Limited, Bengaluru
4. DriveX Mobility Private Limited, Coimbatore (From 15.10.2022)
Associates of TVS Digital Pte Ltd:
1. Tagbox Pte Limited, Singapore
2. Predictronics Corp., USA
3. Scienaptic Systems Inc., USA
4. Altizon Inc, USA
Post 31st March 2023, the following acquisitions were made by the Company through its
overseas subsidiary: Killwatt GmbH, engaged in development, design, manufacture, sale and
distribution of high-tech products and components in the field of personal e-mobility,
inter alia, two-wheeler and three-wheeler vehicles. The Company has obtained 25% stake in
Killwatt through its subsidiary, TVS Motor (Singapore) Pte Limited, by way of subscription
to newly issued shares of Killwatt GmbH on 14th April 2023.
PERFORMANCE OF SUBSIDIARIES
TVS Credit Services Limited (TVS CS)
TVS CS is the retail finance arm of the Company for financing of two wheelers. TVS CS
is a Non-Banking Finance Company catering to financing of retail focussed products such as
two-wheelers, used cars, used and new tractors, used commercial vehicles, consumer
durables, digital finance products and personal loans. TVS CS primarily caters to
self-employed, new to credit borrowers in the semi-urban and rural areas in the country.
During the year 2022-23, TVS CS's overall disbursements registered at $ 21,652 Cr as
compared to $ 12,533 Cr in the previous year registering growth of 73%.
During the year under review, the assets under management are around $ 20,602 Cr as
against $ 13,911 Cr during the previous year registering a growth of 48%.
Total income during the financial year 2022-23 increased to $ 4,160 Cr from $ 2,755 Cr
during the financial year 2021-22, an increase of 51% over previous year. The profit
before tax after exceptional items for the year stood at $ 511 Cr as against $ 151 Cr
during the previous year registering a growth of 238%.
The following companies are the subsidiaries of TVS CS.
1. Harita ARC Private Limited, Chennai
2. TVS Housing Finance Private Limited, Chennai
3. Harita Two-wheeler Mall Private Limited, Chennai All the above subsidiaries are yet
to commence their operations.
Sundaram Auto Components Limited (SACL)
The total income of SACL was $ 787 Cr in the current year as against $ 608 Cr in the
previous year 2021-22. SACL earned a profit before tax of $ 24.08 Cr after incurring an
exceptional cost of $ 1.87 Cr during the year 2022-23 as against profit of $ 4.30 Cr in
the previous year after exceptional cost of $ 6.00 Cr. Exceptional cost includes
separation cost. SACL is a wholly owned subsidiary of the Company.
TVS Housing Limited (TVSH)
TVS Housing Limited is a wholly owned subsidiary of the Company.
TVS Motor Services Limited (TVS MS)
TVS MS was incorporated as the investment SPV of the Company, for funding TVS Credit
Services Limited (TVS CS). TVS MS now holds 0.48% only in TVS CS and TVS MS continues to
be a wholly owned subsidiary of the Company. On 28th March 2023, TVS MS allotted 5 Cr
Optionally Convertible Redeemable Preference Shares (OCRPS) of face value of $ 10 each at
par, aggregating to a total sum of $ 50 Cr to the Company on a Preferential Placement
Basis.
TVS Electric Mobility Ltd, Chennai (TVSEM)
TVSEM was incorporated on 13.12.2021 to undertake Electric Mobility business. The
entire shares of TVSEM have been subscribed by the Company and hence, TVSEM is a wholly
owned subsidiary of the Company. The Company is yet to commence its operations.
TVS Motor Company (Europe) B.V.
TVS Motor Company (Europe) B.V. was incorporated with a view to serve as a special
purpose vehicle for making and protecting the investments made in overseas operations of
PT TVS.
TVS Motor (Singapore) Pte. Ltd
TVS Motor (Singapore) Pte Limited, is a wholly owned subsidiary of the Company.
During the year, the Company has invested a sum of SGD 91.53 Mn in the ordinary shares
of Sg $1/- each of TVS Motor (Singapore) Pte Limited.
The Company serves as a special vehicle for investments made in overseas subsidiaries /
associates.
TVS Digital Pte Ltd, Singapore
TVS Digital Pte Limited, Singapore is a wholly owned subsidiary of TVS Motor
(Singapore) Pte Limited. The Digital start-up offers a range of solutions across their
Auto-tech and Fintech platforms and have secured clients in Bangladesh, Bolivia, India,
Indonesia, Nepal, Philippines and Singapore. The product offerings centre around Credit
Decisioning and Collections in Fintech and a suite of Sales acceleration and Consumer
Experience enhancements apps in the Auto-tech platform that is also finding applicability
in Real Estate and B2B businesses.
Revenue streams have commenced and the team is now focused on exponential growth
through scale and adoption to help deliver focused unit economics objectives.
PT. TVS Motor Company Indonesia (PT TVS)
During the year under review, PT TVS recorded sales of 19,096 nos. of three wheelers as
against 11,043 nos. of sales during the previous year (growth of 73%) and 88,067 nos. of
two wheelers as against 86,025 nos. in last year, thereby registering a growth of 2%.
The growth in sales numbers, coupled with effective management of fixed costs enabled
PT TVS to achieve 27
EBITDA of USD 8.3 Mn. (7.9% on turnover) as against USD 5.3 Mn. (6.4% on turnover) in
last year. PT TVS has posted Operating PBT of USD 5.6 Mn. for the full year.
Swiss E-Mobility Group (Holding) AG (SEMG)
During the previous year, the Company acquired majority stake in Swiss E-Mobility Group
and its subsidiaries viz., Swiss E-Mobility Group (Schweiz) and Colag E-Mobility GmbH
through TVS Motor (Singapore) Pte Ltd.
The acquisition reaffirms the Company's commitment to expansion in Europe, largest
eBike market outside of China, through a portfolio of premium and technology leading
brands including EGO Movement.
SEMG is a market-leading provider of e-mobility solutions within the DACH region,
operating the largest pure-play ebike retail chain m-way in Switzerland. SEMG currently
has a physical network of 33 stores at strategic locations across Switzerland and two
online e-commerce platforms for distribution of its products.
SEMG has strong omni channel distribution and aspirational brands, including Cilo,
Simpel, Allegro and Zenith-Bikes. SEMG is No. 1 in Switzerland with a market share of 20%.
During last calendar year 2022, SEMG Group reported a revenue of USD 69.5 Mn and a loss of
USD 11.2 Mn. With further growth planned on physical stores and expansion further into the
DACH region, the expected revenue for the current calendar year 2023 is around USD 104 Mn.
SEMG acquisition gives an opportunity to grow in personal mobility business including
e-kick scooters and e-cargo bikes which are emerging trends.
E-bikes are emerging as the leading personal mobility solution in Europe due to the
increased ease of usage, regulatory support and overall perception as a sustainable form
of transport. With a current penetration of approximately 15% of the total bicycle
population in Europe and growing at a CAGR of ~18%, the market for the e-bicycle holds
significant growth potential. The global Industry for E-bikes is expected to touch USD 25
bn in 5 years.
This acquisition of eBike business having a good market share and opportunity to drive
further value will augur well for the Company in the long run.
The GO Corporation, Switzerland (the GO AG)
In September 2021, the Company acquired majority stake in the GO AG, Switzerland and
its subsidiary EGO Movement through TVS Motor (Singapore) Pte Ltd.
Over the past decade, the personal mobility landscape has evolved significantly with
the global sustainability agenda, increasing urbanisation and advancement in battery
technology.
EGO Movement's product portfolio focuses on delivering sustainable products with the
latest technology and stylish designs. A powerful battery is blended harmoniously into the
frame, whose ergonomic design allows for a comfortable upright sitting position. In
addition, EGO Movement's connectivity platform is enhancing security and convenience for
the vehicle's user with smart features such as keyless-go, GPS location with theft alarm
and access-sharing. The unique and innovative design philosophy has earned the company
multiple awards, including the prestigious Red Dot Award and in 2022 the German Brand
Award.
This acquisition is in line with the Company's commitment towards electrification and
the broader sustainability agenda for building an aspirational product portfolio while
nurturing sustainable and scalable brands. EGO Movement is a Swiss technology company
providing innovative mobility solutions through a portfolio of e-bikes, e-cargo bikes and
matching accessories.
EGO Movement has a strong presence in Europe with customer-centric products, a unique
omnichannel network and a visionary team at its helm.
The Norton Motorcycle Co Limited, UK)
During the financial year 2022-23, The Norton Motorcycle Co. Limited (UK) (Norton) has
started handing over the bikes to the customers from the new state-of-the-art facility
established in Solihull, United Kingdom.
Norton has launched new 'Commando 961 Sports' bike with completely redesigned
components. A clear distribution strategy has been established with plans to have a mix of
sales direct to customer and through dealers. It has already set up few dealers in United
Kingdom and has formed or firmed up its product plan with a series of new products to be
launched in coming years catering to various markets and segments in the premium
motorcycle market.
Norton will continue to focus on improving the quality standards and supply chain as it
steps ups the production volumes and for the new products in the coming years as part of
its journey of relaunching this iconic brand to its rightful place at the global level.
Associates:
Emerald Haven Realty Limited (EHRL)
During the year, EHRL registered a sales booking value (BV) of $ 930 Cr - the highest
ever annual sales BV in the history of EHRL, with a growth of 189%, backed by strong sales
across new launches and sustenance projects EHRL a worked on various value engineering
measures to control operating and fixed costs, which helped in the operating performance
of the Company.
EHRL completed 4 land acquisitions across Chennai and Bangalore with a sales BV
potential of $ 1250 Cr for the year under review. The Company has completed development of
2.4 million Sft till date and the balance area under development as on date is 6.25
million Sft.
Subsidiaries of EHRL
1. Emerald Haven Development Limited;
2. Emerald Haven Projects Private Limited;
3. Emerald Haven Life Spaces (Radial Road) Limited;
4. Emerald Haven Realty Developers (Paraniputhur) Private Limited;
5. Emerald Haven Property Development Limited;
6. Emerald Haven Town and Country Private Limited;
7. Happiness Harmony Property Developers Private Limited; and
8. Emerald Haven Towers Limited.
Ultraviolette Automotive Private Limited (UV)
UV incurred a loss of $ 9.03 Cr in the year 2022-23 as against loss of $ 2.53 Cr in the
previous year 2021-22. UV is a startup company engaged in developing electric mobility
solutions.
Tagbox Solutions Pvt Ltd, India / Tagbox Pte Ltd, Singapore (Tagbox)
Tagbox is a start-up company which provides an IoT based monitoring solution to predict
and prevent unfavourable events, optimize reefer fleet and routes and manage inventory.
The total income of Tagbox was at $ 5.58 Cr in the current year as against $ 7.24 Cr in
the previous year 2021-22. Tagbox incurred a loss of $ 4.82 Cr in the year 2022-23 as
against the loss of $ 2.71 Cr in the previous year 2021-22..
DriveX Mobility Private Limited (DriveX)
DriveX incurred a loss of $ 11.12 Cr in the year 2022-23 as against loss of $ 2.75 Cr
in the previous year 2021-22. DriveX is engaged in leasing two-wheeler motor cycles and
scooters; and selling, trading, and distributing preowned two-wheeler motor cycles and
scooter.
Predictronics Corp, (Predictronics) USA
Predictronics is a start-up company engaged in predictive analytics solution for
critical assets, vertical software for industrial robots and consulting services. Revenue
of Predictronics was at $ 5.72 Cr in 2022-23 as against $ 7.01 Cr in the previous year
2021-22. Predictronics made a loss of $ 4.88 Cr in the year 2022-23 as against a loss of $
2.76 Cr in the previous year 2021-22.
Scienaptic System Inc (Scienaptic), USA
Scienaptic is a start-up company engaged in explainable AI powered Advanced
underwriting decisioning platform. They have more than 115 clients currently and have
established a niche market with SME Credit Unions in the US. They are now breaking even as
part of their focused efforts around unit economics. Total income of Scienaptic was at $
36.12 Cr in 2022-23 as against $ 28.90 Cr in the previous year 2021-22. Scienaptic
incurred a loss of $ 17.10 Cr in the year 2022-23 as against loss of $ 24.10 Cr in the
previous year 2021-22.
Altizon Inc, (Altizon) USA
Altizon is a start-up company which provides industrial IoT solutions and helps
enterprises use machine data to drive business decisions. Featured in the top 10 IiOT
platform's globally and in the Gartner Magic Quadrant consistently, they are breaking even
as part of their focused efforts around unit economics. Total income of Altizon was at $
7.22 Cr in the current year as against $ 4.03 Cr in the previous year 2021-22. Altizon
incurred a loss of $ 2.33 Cr in the year 2022-23 as against loss of $ 6.54 Cr in the
previous year 2021-2022.
KEY FINANCIAL RATIOS
As required under Regulation 34 of the Listing Regulations, there was a significant
change in Interest Service Coverage ratio, Net Profit Margin and Return on Networth.
Details of changes are:
|
|
Standalone |
Consolidated |
Ratios |
UOM |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
Interest Service |
|
|
|
|
|
Coverage ratio |
Times |
15.20 |
10.90 |
8.20 |
7.20 |
Net Profit Margin |
% |
5.70 |
4.30 |
4.10 |
3.00 |
Return on Networth |
% |
27.43 |
19.87 |
26.83 |
18.40 |
Improvement in the above ratios reflect better operational performance.
NON-CONVERTIBLE DEBENTURES
During the year under review, the Company issued 12,500 Rated, Unsecured, Redeemable,
Floating rate, Non-Convertible Debentures (NCDs) having a face value of $ 1,00,000 (Rupees
One Lakh only) each aggregating to $ 125 Cr (Rupees One Hundred and Twenty Five Crores
only) and the allotment was made on 14th March 2023. The NCDs were listed on the National
Stock Exchange of India Limited on 15th March 2023. The above NCDs were issued at a coupon
rate i.e., sum of Benchmark Rate and spread of 140 basis points, payable on Coupon Payment
Dates. Benchmark Rate is Repo Rate as declared by RBI and revised from time to time.
Benchmark Rate (Repo Rate) was 6.50% as on date of issue. Thus, initial coupon rate as on
date of issue was 7.90 % p.a. and redeemable at the end of 3rd year. The Company had
earlier issued and allotted 5,000 Listed, unsecured, redeemable, non-convertible
debentures (NCD) of facevalue of $ 10 Lakhs each on 15th May 2020 aggregatingto $ 500
Crores at 7.5% p.a. and the same will be redeemed on or before 15th May 2023.
8. CONSOLIDATED FINANCIAL STATEMENTS
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 the 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 the
Auditors' Report form part of the Annual Report. The financial statements of the
subsidiary companies will be made available to the Shareholders, on receipt of a request
from any Shareholder. The financial statements of the subsidiaries have also been placed
on the website of the Company. This will also be available for inspection by the
Shareholders at the Registered Office during business hours as mentioned in the Notice
of AGM.
The consolidated Profit Before Tax of the Company and its subsidiaries & associates
amounted to $ 1936 Cr for the financial year 2022-23 as compared to $ 1,067 in the
previous year.
9. DIRECTORS & KEY MANAGERIAL PERSONNEL
Special Recognition to Mr Venu Srinivasan, Chairman Emeritus & Managing Director
Mr Venu Srinivasan was honoured with the Outstanding Institution Builder of the year by
AIMA (All India Management Association) at its 13th Managing India Awards in recognition
of excellence in Business Leadership and Management and his significant contributions in
building and shaping an institution, driving its growth, and creating a lasting legacy.
Special Recognition to Prof. Sir Ralf Dieter Speth, Chairman
Prof. Sir Ralf Dieter Speth, was admitted as a Fellow of the Royal Society, United
Kingdom for his contributions in the field of Science.
He was also conferred with an Honorary Doctorate in the field of Science (Doctor of
Science, honoris causa) from the University of Warwick, United Kingdom. The honorary
degree was conferred by the University of Warwick Chancellor Baroness Catherine Ashton of
Upholland.
Directors' appointment / re-appointment / cessation
Mr Sudarshan Venu, Managing Director (MD) of the Company was re-appointed for a further
term of five years from 01.02.2023 to 31.01.2028 including payment of remuneration and the
same was approved by the shareholders through Postal Ballot on 14th June 2022. Approval of
the Central Government was also received on 26th September 2022, being a non-resident.
During the year under review, Mr H Lakshmanan, director, expressed his unwillingness for
being re-appointed at the AGM held on 27th June 2022, due to old age and hence, not
reappointed. The vacancy of the retiring director was not filled up by the shareholders.
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
AGM. Accordingly, Prof Sir Ralf Dieter Speth, Chairman and Mr Sudarshan Venu, Managing
Director, are liable to retire by rotation, at the ensuing AGM.
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.
During the year under review, the Board appointed Mr B Sriram, as Non-Executive
Independent Director (NE-ID) on the Board at its meeting held on 24th January 2023, on the
recommendation of the Nomination and Remuneration Committee, for a term of five
consecutive years effective 24th January 2023. The shareholders have approved his
appointment by way of special resolution through postal ballot on 9th March 2023.
The appointment of new directors are recommended by the Nomination and Remuneration
Committee ('NRC') on the basis of requisite qualifications, skills, proficiency,
experience, expertise in industry knowledge and competencies as identified and finalized
by the Board considering the industry and sector in which the Company operates.
The Board, on the recommendation of the NRC, independently evaluates and recommends to
the shareholders.
In the opinion of the Board, the Independent Directors appointed during the year are
persons of high repute, integrity and possesses the relevant expertise and experience in
the respective fields.
On 5th March 2019, the IDs viz., M/s. T Kannan, C R Dua and Hemant Krishan Singh were
reappointed for the second term of 5 consecutive years from 14th July 2019. Mrs Lalita D.
Gupte and Mr R Gopalan, were appointed as Additional and Independent Directors for a term
of 5 years by the Board at its meeting held on 23rd October 2018 and 30th April 2019
respectively and the same were approved by the shareholders at the AGM held on 22nd July
2019. The terms of appointment of IDs include the remuneration payable to them by way of
fees and profit-related commission, if any.
Mr Kuok Meng Xiong was appointed by the Board on 24th March 2021 as NE-ID for a term of
five consecutive years effective that date and the same was approved by the shareholders
at the 29th AGM held on 29th July 2021. The terms of IDs cover, inter-alia, duties, rights
of access to information, disclosure of their interest / concern, dealing in Company's
shares, remuneration and expenses, insurance and indemnity. The IDs are provided with
copies of the Company's policies and charters of various committees of the Board.
In accordance with Section 149(7) of the Act, 2013, all IDs have declared that they
have met 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 Company's website in the
link as provided in page no. 102 of this Annual Report.
All the IDs are 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 Companies Act, 2013 and obtained ID registration certificate and renewed the same for
five years / life time, as the case may be.
Separate meeting of Independent Directors
During the year under review, a separate meeting of IDs was held on 23rd March 2023.
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 the Nomination and Remuneration Committee (NRC)
for evaluation of Non-IDs and Executive Directors viz., M/s Venu Srinivasan, Sudarshan
Venu, K N Radhakrishnan and Non-IDs Non-Executive Directors viz., Prof. Sir Ralf D Speth
and Dr. Lakshmi Venu and also of Chairman of the Board and the Board as a whole, for the
year 2022-23.
IDs evaluated the performance of all Non-IDs individually, through a set of
questionnaires.
IDs reviewed the major events and milestones achieved by the Company during the year
2022-23 and products launched, major acquisitions & strategic partnerships and awards
& accolades received and the comparative data on financial / market cap for the year
2022-23.
They also reviewed the developing strategic plans aligned with the vision and mission
of the Company, displaying leadership qualities for seizing the opportunities and
priorities, developing and executing business plans aware of the risks involved,
establishing an effective organizational structure, and demonstrating high ethical
standards and integrity and commitment to the organization besides participation at the
Board / Committee meetings, effective deployment of knowledge and expertise and
constructive comments / guidance provided to management by the Non-IDs.
IDs were satisfied fully with the performance of all Non-IDs.
b) Chairman
IDs reviewed the performance of the Chairman of the Board.
IDs also placed on record, their appreciation of the Chairman's distinguished career in
automotive industry for more than four decades and exemplary leadership skills, tremendous
vision, and dedication to the industry, provides exceptional and critical leadership for
the Board and lead Company in its transformational journey. IDs also noted that his vast
experience to helps to steer Board discussions and decisions for the benefit of the
Company and Shareholders.
c) Board
IDs also evaluated the Board's composition, size, the mix of skills and experience,
meeting sequence, the effectiveness of discussion, decision making, and followup action,
so as to improve governance and enhance the personal effectiveness of Directors. The
evaluation process focused on Board Dynamics. The Company has a Board with a wide range of
expertise in all aspects of business and outstanding diversity of the Board with the
presence of varied personalities with an expert in each domain viz., Engineering, Finance,
Marketing, Legal, Information Technology, Banking, Administration and International trades
and is well balanced with the addition of directors, with domestic and international
experience and also from new industries. The Company's management is well guided by the
Non-Executive Directors; and Board benchmarks well in terms of its overall composition and
the value it adds to the business.
As far as shareholders' interest is concerned, IDs noted that a proper system has been
established to ensure that the Company is prompt, relevant and transparent. They were
satisfied with the Company's performance in all fronts and finally concluded that the
Board operates with best practices. Board composition of the Company is in compliance with
SEBI Listing Regulations and ahead of the benchmark as per the Corporate Governance
Scorecard in overall position.
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 Company is in compliance with the statutory requirements under both the Companies
Act and the Listing Regulations and all the information provided to the Directors are very
wholesome.
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)
Mr Venu Srinivasan, Chairman Emeritus and Managing Director, Mr Sudarshan Venu,
Managing Director, Mr K N Radhakrishnan, Director & CEO, Mr K Gopala Desikan, Chief
Financial Officer and Mr K S Srinivasan, Company Secretary are KMPs of the Company in
terms of Section 2(51) read with 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 with statutory amendments to make it upto date and more
comprehensive.
The objective of such policy shall is to attract, retain and motivate executive
management and devise remuneration structure to link to Company's 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 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 Independent Directors of the Company (IDs) every financial year.
IDs devote considerable time in deliberating the operational and other issues of the
Company and provide valuable advice in regard to the management of the Company from time
to time, and the Company also derives substantial benefit through their expertise and
advice.
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 the 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 questionnaire.
Independent Directors
The performance of all IDs was 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 IDs were always
kept informed of the constitution of robust framework for the Company and group companies
against cyber threats and mitigation plans against cyber-attacks for business continuity.
They also kept abreast of risk mitigation plans on International Business risks viz.,
depreciation of currency, dollar shortage, increasing material cost and global
inflationary pressure. They also evaluated and satisfied with the risk mitigation on the
supply chain disruption of Semiconductor and CoVID preparedness, to minimize the impact on
business operations and employees health, from its previous learnings. The Board noted
that all IDs have understood the opportunities and risks to the Company's strategy and are
supportive of the direction articulated by the management team towards consistent
improvement.
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 Directors, as the case may be.
Committees
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 Committee's terms of reference to ensure that the
Company's existing practices remain appropriate.
Directors continued to devote such time as is necessary for the proper performance and
effectively discharge their duties, all of them were able to devote appropriate time to
fulfill their duties.
Board and its Committees had an appropriate combination of skills, experience and
knowledge.
The current Committees structure was considered effective and all the Committees of the
Board were considered to be working effectively.
Recommendations from each Committee were considered and accepted by the Board prior to
its implementation during the financial year under review.
Details of Committees, its charter and functions are provided in the Corporate
Governance Report.
Number of Board meetings held:
During the financial year 2022-23, the Board met six times and details of the meetings
are provided as part of Corporate Governance Report prepared in terms of the Listing
Regulations.
10. AUDITORS
Statutory Auditors
M/s V. Sankar Aiyar & Co., Chartered Accountants, Mumbai, having Firm Registration
No. 109208W allotted by The Institute of Chartered Accountants of India, have been
re-appointed at the Company's 26th AGM held on 7th August 2018 to hold office as Statutory
Auditors of the Company, for the second term of five consecutive years from the conclusion
of 26th AGM till the conclusion of this 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 second term of five
consecutive years of M/s V. Sankar Aiyar & Co., Chartered Accountants, Mumbai gets
completed at the end of the ensuing annual general meeting.
In this connection, the Board, based on the recommendation of the Audit Committee, at
its meeting held on 4th May 2023 has appointed M/s Sundaram & Srinivasan, Chartered
Accountants, Chennai, having Firm Registration No.004207S allotted by The Institute of
Chartered Accountants of India, as statutory auditors of the Company for the first term of
five consecutive years from the ensuing AGM till the conclusion of 36th AGM at a Statutory
Audit fees of $ 85 Lakhs for the financial year 2023-24.
The Company has received consent from M/s Sundaram & Srinivasan, Chartered
Accountants, Chennai, to serve as statutory auditors of the Company for the financial year
2023-24.
The directors recommended the appointment of M/s Sundaram & Srinivasan, Chartered
Accountants, as the statutory auditors of the Company, subject to approval of the
shareholders at the ensuing Annual General Meeting. 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 2023-24. The Auditors' Report for the
financial year 2022-23 does not contain any qualification, reservation or adverse remark
and the same is attached with the annual financial statements. Directors place on record
their appreciation of the valuable services rendered by M/s V. Sankar Aiyar & Co,
Chartered Accountants, Mumbai during their tenure as statutory auditors of the Company.
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 financial year 2022-23, given by M/s S
Krishnamurthy & Co., Company Secretaries, Chennai is attached to this Report.
The Secretarial Audit Report does not contain any qualification, observation or other
remarks.
The Board at its meeting held on 4th May 2023 has reappointed M/s S Krishnamurthy &
Co., Company Secretaries, Chennai having Firm registration Number P1994TN045300 allotted
by the Institute of Company Secretaries of India as Secretarial Auditors for the financial
year 2023-24.
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. Mr
A N Raman, Practicing Cost Accountant, having Registration No. 5359 allotted by The
Institute of Cost Accountants of India, was re-appointed as Cost Auditor of the Company at
the Board meeting held on 5th May 2022 to carry out the audit as per the aforesaid
provisions of the Act, 2013 for the financial year 2022-23. His remuneration was also
ratified by the members at the 30th AGM held on 27th June 2022.
In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board has
appointed M/s C S Adawadkar & Co, Practicing Cost Accountants, having Firm
Registration No. 100401 allotted by The Institute of Cost Accountants of India, as Cost
Auditor of the Company, on the recommendation of the Audit Committee, in the place of Mr A
N Raman, Practicing cost accountant, in terms of Section 148 of the Act, 2013, for
conducting Cost Audit for the financial year 2023-24.
The Company has received consent from M/s C S Adawadkar & Co, Practicing Cost
Accountants, to serve as Cost auditors of the Company for the financial year 2023-24.
The Company has also received necessary certificate under Section 141 of the Act, 2013
from them conveying their eligibility to act as a Cost Auditor.
A sum of $ 8 lakhs has been fixed by the Board as remuneration in addition to
applicable taxes, out of pocket expenses, travelling and other expenses payable to them,
for the financial year 2023-24, which is required to be approved and ratified by the
Members, at the ensuing AGM as per Section 148(3) of the Act, 2013.
Directors place on record their appreciation of the valuable service rendered by Mr A N
Raman, Cost Accountant, Chennai, as Cost Auditor of the Company.
The Company has filed the Cost Audit Report of 2021-22 on 26th August 2022 in XBRL
format.
11. CORPORATE GOVERNANCE
The Company has been practicing the principles of good corporate governance over the
years and lays strong emphasis on transparency, accountability and integrity. A separate
section on Corporate Governance and a certificate from the Statutory Auditors of the
Company regarding compliance of conditions of Corporate Governance as stipulated under
Listing Regulations is given as Annexure VIII to this Report.
The Director & Chief Executive Officer (D&CEO) and the Chief Financial Officer
(CFO) of the Company have certified to the Board on financial statements and other matters
in accordance with the Regulation 17 (8) of the Listing Regulations pertaining to CEO /
CFO certification for the financial year ended 31st March 2023.
12. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("Listing Regulations") read with relevant SEBI Circulars, new
reporting requirements on ESG parameters were prescribed under "Business
Responsibility and Sustainability Report" ('BRSR'). The BRSR seeks disclosure on the
performance of the Company against nine principles of the "National Guidelines on
Responsible Business Conduct' ('NGRBCs').
As per SEBI Circulars, effective from the financial year 2022-23, filing of BRSR is
mandatory for the top 1000 listed companies by market capitalisation. Accordingly, for the
financial year ended 31st March 2023, Company has published BRSR, in the prescribed format
is given as Annexure VII to this Report and is available on the Company's website in the
link as provided in page no. 102 of this Annual Report.
13. POLICY ON VIGIL MECHANISM
The Company has adopted a Policy on Vigil Mechanism in accordance with the provisions
of the Act, 2013 and Regulation 22 of the 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 Company's 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 Company's
Code.
The Policy is disclosed on the Company's website in the link as provided in page no.
102 of this Annual Report.
14. PUBLIC DEPOSITS
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 2023.
15.STATUTORY STATEMENTS
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, if any, affecting the financial position of the
Company, having occurred since the end of the year and till the date of the Report:
There have been no material changes and commitments affecting the financial position of
the Company, which have occurred between the end of the financial year of the Company to
which the financial statements relate and the date of this Report.
Significant and material orders passed by the Regulators or Courts or Tribunals
impacting the going concern status of the Company:
There are no significant and material orders passed by the Regulators or Courts or
Tribunals, which would impact the going concern status of the Company and its future
operations.
Annual Return:
Copy of the Annual Return (Annexure II) in prescribed form is available on the
Company's website in the link as provided in page no. 102 of this Annual Report, in terms
of the requirements of Section 134(3)(a) of the Act, 2013 read with the Companies
(Accounts) Rules, 2014.
Employee's 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.
Comparative analysis of remuneration paid:
A comparative analysis of remuneration paid to Directors and Employees with the
Company's performance is given as Annexure V to this Annual Report.
Details of related party transactions:
There are 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 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 2022-23
are given as Annexure VI to this Annual Report. On loans granted to the Employees, the
Company has charged interest as per its policy, in compliance with Section 186 of the Act,
2013.
Please refer note no. 3 to Notes on accounts 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.
General Disclosures
During the year, there were no transaction requiring disclosure or reporting in respect
of matters relating to: (a) issue of equity shares with differential rights as to
dividend, voting or otherwise; (b) issue of shares (including sweat equity shares) to
employees of the Company under any scheme;
(c) pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016 and (d)
instance of one-time settlement with any bank or financial institution.
Disclosure in terms of Sexual Harassment of Women at workplace (Prevention, Prohibition
and Redressal) Act, 2013
As per the requirement of The Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 (POSH), as amended, Company has a robust mechanism in
place to redress complaints reported under it. Company has complied with provisions
relating to the constitution of Internal Committee under POSH. The Internal Committee (IC)
comprises of internal members and external member who has an extensive experience in the
field.
In the year 2022, 3 case of sexual harassment was reported, which was investigated and
resolved as per the provisions of the POSH.
During the year 2022-23, initiatives were undertaken to demonstrate Company's zero
tolerance policy against discrimination and sexual harassment, which included creation of
comprehensive and easy to understand training and communication material. In addition,
online workshops were also run for the employees to enhance awareness and knowledge.
16. ACKNOWLEDGEMENT
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
|
PROF. SIR RALF DIETER SPETH |
Chennai |
Chairman |
4th May 2023 |
(DIN: 03318908) |
|