TVS Motor Company Limited

SPECIAL STUDIES REPORT

Submitted by
Nikhil Vaghela

BM32
202231300032

INTEGRATED MASTER OF BUSINESS ADMINISTRATION

(IMBA)

Department of Public Policy and Governance (DPPG)

B.K. School of Professional and Management Studies
Gujarat University

October, 2023
 DECLARATION

I undersigned, hereby declare that the project titled <“TVS Motor Company Limited“> submitted as
a part of academic, is a record of an original work done by me under the guidance of my HOD and
other faculty members of DPPG, B.K. School of Professional and Management Studies, Gujarat
University. The result embodied in this report have not been submitted to any other university or
institute. This project has not been copied, duplicated o plagiarized from any other paper, journal,
document or book. This is an authentic piece of work and in case of any query regarding the same, I
shall be held responsible for answering any queries.

Nikhil Vaghela
30/10/2023
 Department of Public Policy and Governance (DPPG)
B.K. School of Professional and Management Studies
Gujarat University

CERTIFICATE

This is to certify that the report titled “<TVS Motor Company Limited>”
being submitted by <Nikhil Vaghela, BM32.>, as a part of academic, is a
bonafide record of the project work done by <Nikhil Vaghela>of < Name
of the Dept. & College>

Prof. Arun Chauhan

 Acknowledgements

Through this acknowledgement I express my sincere gratitude towards all those people who helped
me in this project, which has been a learning experience.

This space wouldn’t be enough to extend my warm gratitude towards my project guide <NAME>
for his efforts in coordinating with my work and guiding in right direction. I escalate a heartfelt
regard to our HOD Dr. Nilam Panchal for giving me the essential hand in concluding this work.
It would be injustice to proceed without acknowledging those vital supports I received from my
beloved classmates and friends, without whom I would have been half done. I also use this space to
offer my sincere love to my parents and all others who had been there, helping me walk through this
work.

Nikhil Vaghela
 TABLE OF CONTENTS
Sr No. Topics/Particulars Page No
1 Introduction 0
2 Financial Highlights 2
3 Notice to Shareholders 3
4 Director’s Report to the Shareholders 7
5 Management Discussion and Analysis 12
6 Report on Corporate Governance 16
7 Auditor’s Report to the Shareholders 22
8 Balance Sheet 24
9 Profit and Loss Account 25
10 Schedule 26
11 Notes on Accounts 30
12 Statement u\s 212 42
13 Cashflow Statement 43
14 General Business Profile 44
15 Sundaram Auto Components Limited 45
16 Consolidated Accounts 56
Introduction :

TVS Motor Company (commonly known as TVS) is an

Indian multinational motorcycle manufacturer headquartered in Chennai. It is the third-largest
motorcycle company in India in terms of revenue. The company has annual sales of three
million units and an annual production capacity of over four million vehicles. TVS Motor
Company is also the second largest two-wheeler exporter in India with exports to over 60
countries.

History
T. V. Sundram Iyengar began with Madurai's first bus service in 1911 and founded TVS, a
company in the transportation business with a large fleet of trucks and buses under the name of
Southern Roadways.

Early history
Sundaram Clayton was founded in 1962 in collaboration with Clayton Dewandre Holdings,
United Kingdom. It manufactured brakes, exhausts, compressors and various other automotive
parts. The company set up a plant at Hosur in 1976, to manufacture mopeds as part of their new
division. In 1980, TVS 50, India's first two-seater moped rolled out of the factory at Hosur in
Tamil Nadu, India. A technical collaboration with the Japanese auto giant Suzuki Ltd. resulted
in the joint-venture between Sundaram Clayton Ltd and Suzuki Motor Corporation, in 1987.
Commercial production of motorcycles began in 1989.

Suzuki relationship
TVS and Suzuki shared a one-year-long relationship that was aimed at technology transfer for
design and manufacture of two-wheelers specifically for the Indian market. Re-christened
TVS-Suzuki, the company brought out several models such as the Suzuki Supra, Suzuki
Samurai, Suzuki Shogun and Suzuki Shaolin. In 2001, after separating ways with Suzuki, the
company was renamed TVS Motor, relinquishing its rights to use the Suzuki name. There was
also a 30-month moratorium period during which Suzuki promised not to enter the Indian
market with competing two-wheelers.

Recent
TVS Apache RR 310 is their latest 310 cc motorcycleTVS Scooty Streak – one of the
discontinued scooters of Scooty seriesTVS also competes in the 3 Wheeler segment
Recent launches include the flagship model TVS Apache RR 310, the TVS Apache RTR 200,
TVS Victor and TVS XL 100. TVS has recently won 4 top awards at J.D. Power Asia Pacific
Awards 2016, 3 top awards at J.D. Power Asia Pacific Awards 2015 and Two-Wheeler
Manufacturer of the Year at NDTV Car & Bike Awards (2014–15).
In early 2015, TVS Racing became the first Indian factory team to take part in the Dakar Rally,
the world's longest and most dangerous rally. TVS Racing partnered with French motorcycle
manufacturer Sherco, and named the team Sherco TVS Rally Factory Team. TVS Racing also
won the Raid de Himalaya and the FOX Hill Super Cross held at Sri Lanka. In three decades of
its racing history, TVS Racing has won over 90% of the races it participates in.
In 2016, TVS started manufacturing the BMW G310R, a model co-developed with BMW
Motorrad after their strategic partnership in April 2013. In December 2018, the Hosur plant
where the motorcycle is manufactured rolled out its 50,000th G310R series unit.
On 6 December 2017, TVS launched their most-awaited motorcycle, the Apache RR 310 in an
event at Chennai. The 310 cc motorcycle with an engine which was co-developed with BMW
features the first ever full fairing on a TVS bike, dual-channel ABS, EFI, KYB suspension kits,
etc. It is expected to rival bikes like KTM RC 390, Kawasaki Ninja 250SL, Bajaj Pulsar and
Dominar and Honda CBR 250R after hitting the market. The Apache RR 310 is designed and
realised entirely in India.
 TVS MOTOR COMPANY
LIMITED

Board of Directors Listing of shares with

VENU SRINIVASAN Madras Stock Exchange Ltd., Chennai. The Stock
Chairm an & Managing Dire ctor Exchange, Mumb ai.
National Stock Exchange of India Ltd., Mumb ai.
GOPAL SRINIVASAN

T. K. BALAJI

H. LAKSHMANAN

T. KANNAN 1
N. GANGA RAM

C. R. DUA

K. S. BAJPAI
C. V. R. PANIKAR

Audit Committee
N. GANGA RAM
Chairm an

T. K. BALAJI

T. KANNAN

Investors’ Grievance Committee

N. GANGA RAM
Chairm an

VENU SRINIVASAN

T. KANNAN

President
C. P. RAMAN

Vice President - Finance

S.G. MURALI

Secretary
T. S. RAJAGOPALAN

Auditors
SUNDARAM & SRINIVASAN
Chartered Accountants,
23, Sir C.P. Ramaswamy Road,
Alwarpet, Chennai 600 018.
TVS MOTOR COMPANY
LIMITED
Bankers C & I Credit Branch,
Dr. Radhakrishnan Salai, Chennai 600 004.
STATE BANK OF INDIA
Corporate Accounts Group
Branch, Greams Road, Registered office
Chennai 600 006. J ayalakshmi Estates,
24, Haddows Road, Chennai 600 006.
STATE BANK OF MYSORE
Industrial Finance Factories
Branch, Midford
1) Post Box No. 4, Harita,
Garden Road, Hosur 635 109.
Bangalore 560
001. 2) Post Box No. 1,
Byathahalli villa ge,
Kadakola post, Mysore
STATE BANK OF PATIALA 571 311.
Whites Road, Chennai 600 014.

STATE BANK OF BIKANER & JAIPUR Subsidiary

Gandhinagar, Bangalore 560 009. Sund aram Auto Components
Limited Chennai.
INDIAN OVERSEAS BANK

Contents Page no.

Financial Highlights 2
Notice to the Shareholders 3
Dire ctors’ Report to the Shareholders 7
Management Discussion and
Analysis Report 12
Report on Corporate Governance 16
Auditors’ Report to the Shareholders 22
Balance Sheet 24
Profit and Loss Account 25
Schedules 26
Notes on Accounts 30
Statement under section 212 42
Cash Flow Statement 43
General Business Profile 44
Sund aram Auto Components Limited 45
Consolid ated Accounts 56
TVS MOTOR COMPANY
LIMITED

Financial Highlights
Rupees in crores

DETAILS 2003-2004 2002-2003 2001-2002 2000-2001 1999-2000

Sales and other income 2856 2726 1944 1841 1621

Profit before interest, depn., and tax 296 284 144 148 190

Profit before tax 215 201 83 82 120

Profit after tax 138 128 54 63 87

Net fixed assets 704 533 440 436 405

Share capital 24 23 23 23 23

Reserves and surplus 551 400 300 334 292

Networth 562 423 323 357 315

Total borrowings 119 122 167 234 212

Earnings per share (Rs) 5.83 5.54 2.33 2.71 3.78

Dividend per share (Rs) 1.30 1.20 0.90 0.80 0.80

Book value per share (Rs) 23.42 18.39 14.04 15.52 13.70

Notes :

a. Figures for the year 1999-2000 include figures for the period from 1.4.1999 to 21.4.1999.

b. Effective 8th December 2003, the par value of the shares of the company was split from Rs.10/- per share to Re.1/- per share. Previous year figures were
recast to conform to current year figures.

2
TVS MOTOR COMPANY
LIMITED

rotation and being eligible for re-appointment be and is

Notice to hereby re-appointed as a dire ctor of the company.

the 6. To consider and if thought fit, to pass with or

without modific ation, the following resolution as
Shareholde an ordinary resolution:
rs RESOLVED THAT the retiring auditors Messrs. Sund aram &
Srinivasan, Chartered Accountants, Chennai be and are hereby
NOTICE is hereby given that the twelfth annual general meeting re-appointed as auditors of the company to hold offic e from
of the company will be held at ‘The Music Academy’, New the conclusion of this annual general meeting till the
No.168 ( Old No.306), TTK Ro a d, Chennai 600 014 on Frid conclusion of the next annual general meeting of
ay, the 10th September 2004, at 10.15 A.M to transact the
following business:

ORDINARY BUSINESS
1. To consider and if thought fit, to pass with or without
modific ation, the following resolution as an ordinary
resolution:

RESOLVED THAT the audited balance sheet as at 31st

March 2004 and the profit and loss account of the
company for the year ended on that date, together with
the dire ctors’ report and the auditors' report thereon as
presented to the meeting, be and the same are hereby,
approved and adopted.

2. To consider and if thought fit, to pass with or

without modific ation, the following resolution
as an ordinary resolution:
RESOLVED THAT the interim dividend of Rs.6/- per share
declared by the board of dire ctors of the company on 17th
October 2003 on 2,31,00,070 equity shares of Rs.10/- each
fully paid, and the second interim dividend of Re.0.70 per
share declared on 21st April 2004 on 23,75,43,557 equity
shares of Re.1/- each fully paid, absorbing a total sum of
Rs.30.49 crores in the a ggre g ate a nd p aid to the
shareholders on 5th November 2003 and 7th May 2004,
respectively, be and are hereby approved as final dividend
for the year ended 31st March 2004.

3. To consider and if thought fit, to pass with or

without modific ation, the following resolution
as an ordinary resolution:
RESOLVED THAT Mr. N. Ganga Ram, dire ctor who retires
by rotation and being eligible for re-appointment be and
is hereby re-appointed as a dire ctor of the company.

4. To consider and if thought fit, to pass with or

without modific ation, the following resolution
as an ordinary resolution:
RESOLVED THAT Mr. C. R. Dua, dire ctor who retires by
rotation and being eligible for re-appointment be and is
hereby re-appointed as a dire ctor of the company.

5. To consider and if thought fit, to pass with or

without modific ation, the following resolution
as an ordinary resolution:
RESOLVED THAT Mr.T. Kannan, dire ctor who retires by
3
TVS MOTOR COMPANY
LIMITED
Chennai T. S. RAJAGOPALAN
June 28, 2004 Secretary

the company on such remuneration as may be fixed in Registered Office:

this behalf by the board of dire ctors of the company. “ J ayalakshmi Estates”,
24 (Old No.8), Haddows Road,
SPECIAL BUSINESS Chennai 600 006.
7. To consider and if thought fit, to pass with or without
modific ation, the following resolution as an ordinary
resolution:

RESOLVED THAT in supersession of the ordinary

resolution passed by the shareholders in the
extraordinary general meeting of the company held on
30th June 1999, the consent of the company be and is
hereby accorded to the board of dire ctors under
Section 293(1) (d) of the Companies Act, 1956 to
borrow any sum or sums of moneys from time to time
notwithstanding that the money or moneys to be
borrowed, together with the moneys alre ady
borrowed by the company ( apart from temporary
loans obtained from the company’s bankers in the
ordinary course of business) may exceed the
aggregate of the paid up capital and its free reserves,
that is to say, reserves not set apart for any specific
purpose, provided however, the total amount so
borrowed and outstanding at any one time shall not
exceed Rs. 750 crores (Rupees seven hundred and fifty
crores only) or the aggregate of the paid-up capital
and free reserves of the company, whichever is higher.
RESOLVED FURTHER THAT the board of dire ctors be
and are hereby authorised to do all such acts, deeds,
matters and things and to execute all such documents
or writings as they may consider necessary, usual,
requisite or proper for the purpose of giving effe ct to
this resolution.

8. To consider and if thought fit, to pass with or

without modification, the following resolution
as a special resolution:
RESOLVED THAT approval be and is hereby accorded
to the bo ard of dire ctors in terms of Se ction 163
and other applica ble provisions of the Companies
Act, 1956 (the Act) to keep the register of members,
the index of members and register and index of
debentureholders, if any, and copies of all annual
returns prepared under Section 159 of the Act
together with the certificates and documents required
to be annexed thereto under Sections 159 and 161 of
the Act at the offic e of Sundaram-Clayton Limited
(SCL), Share Transfer Agents of the company at No.31,
Railw ay Colony, III Street, Mehta Nagar, Chennai 600
029, orsuch other place within the city limits of
Chennai where SCL decides to carry on the share
registry workinstead ofkeeping at the registered offic e
of the company from such date as may be decided by
the board of dire ctors or a committee of the dire ctors
by giving not less than 30 days notice to the
shareholders / debentureholders.
By order of the board

4
TVS MOTOR COMPANY
LIMITED

Notes
1. A member entitled to attend and vote at the meeting is
Development Institute, World Bank, Washington. Having
entitled to appoint one or more proxies to attend and vote
served for over 8 years with United Bank of India as an
instead of himself and the proxy or proxies so appointed
executive, Mr. Ganga Ram joined Industrial Development
need not be a member or members, as the case may be,
Bank of India (IDBI) and worked with IDBI for 27 years and
of the company. The instrument appointing the proxy and
retired as executive dire ctor in September 1992. He was
the power of attorney or other authority, if any, under
co-opted as a dire ctor of the company on 28th March
which it is signed or a notarially certified copy of that
2001.
power or authority shall be deposited at the registered
office of the company not later than 48 hours before the Mr. Ganga Ram has done overse as consultancy
time fixed for holding the meeting. assignments for the World Bank, Washington and the
Asian Development Bank, Manila. He has wide experienc e
2. The explanatory statement pursuant to Section 173(2) of the
Companies Act, 1956 in respect of the special business as set out in in appraisal and post-sanction supervision ofindustrial
the notice is annexed hereto. projects. He hasserved on the boards of Larsen & Toubro
3. The register of members and the share transfer register will remain Limited and otherreputed c omp anies and State Level
closed for a period of 10 days from 1 st September 2004 to 10th Development Financial Institutions as a nominee dire
September 2004 (both days inclusive). ctor of IDBI. Mr. Ganga Ram is presently member of 4
4. In terms of Se ction 205A re ad with Se ction 205C of the Companies committees of National Stock Exchange of India Limited
A ct, 1956, the dividends de clared by the company which remain
unclaimed for a period of seven ye ars will be transferre d to the (NSE).
Investor Education and Prote c tion Fund (IEPF) est a blishe d by
He is the Chairman of the audit committee and investors'
the C e ntral Government on the due dates. The particulars of due
dates for transfer of such unclaimed dividends to IEPF are furnished in grievanc e committee of the company. Details of his
the report on corporate governanc e forming part of the annual report. other dire ctorship / membership of committees are
Members who have not encashed their dividend warrants given below:
are requested to make their claim by surrend ering the Name of the company Position held Committee
unencashed warra nts immediately to the company. membership
5. Members holding sharesin physicalform, in their own interest, are Enpac (India) Private Limited Dire ctor
requested to dematerialise the shares to avail the benefits of electronic
holding / trading. India C ements Capital & Dire ctor Audit Committee
6. M emb ers are re queste d to notify to the c omp a ny immediately Financ e Limited Credit Committee
any change in their address. Members holding shares in depository are
requested to advise change of address to their depository participants. OTCEI Se curities Limited Dire ctor

7. As a measure of economy, copies of the annual report will not be Sundaram Home Financ Dire ctor Audit Committee
distributed at the annual general meeting. Members are therefore e Limited Chairman
requested to bring their copies of the annual report to the meeting.
Juniper Hotels Private Dire ctor Audit Committee
8. Members are requested to affix their signature at the space provided
on the attend anc e slip annexed to the proxy form and hand over the Limited (Grand Hyatt)
slip at the entrance of the meeting hall.
9. In terms of clause 49 of the listing agreement with stock exchanges, a II Mr. C. R. Dua
brief resume of dire ctors who are proposed to be re-appointed at this
meeting is given below: Born on 3rd November 1951, Mr. C. R. Dua is a senior
partner in the firm Dua Asso ciates. Prior to esta blishing
I Mr. N. Ganga Ram Dua Associates, Mr. Dua has been in private practice since
Born on 22nd September 1934, Mr. N. Ganga Ram holds a 1976. He has been practising in the are as of corporate
Master of Arts degree in Economics from the University of and commercial law, corporate finance, securitieslaw,
Madras. He is a Certified Associate of the Indian Institute taxation, land ac quisition, power proje cts, foreign
of B a nking & Fin a n c e a nd Fellow of the E c investments, colla borations, disinvestments and
onomic privatisation of public se ctor und ertakings, merg ers a
nd ac quisitions a nd exchange control regulations. Mr.
Dua obtained honours degree in Economics from St.
Stephen’s College, University of Delhi followed by a
masters degree in Economics from the Delhi School of
Economics and subsequently a degree in law. He sits on
the boards of many major multinational corporations in
India primarily representing the interests of the foreign
colla borators and investors. He was co-opted as a dire
ctor of the company on 27th December 2001.

He is the chairman of CNO India, a society. He is also a

trustee of Norbuling a Institute for Tibetian Culture and he
has controlling interest in Dua Consulting (P) Limited.

5
TVS MOTOR COMPANY
LIMITED
Recently, he was elected as a member of National
Executive Board of AMCHAM India for the year 2004-
2005 and also designated as Hony. Secretary and
treasurer.

6
 TVS MOTOR COMPANY
LIMITED

Details of his other dire ctorship / membership of committees are

given below: III Mr. T. Kannan
Born on 9th M a y 1953, Mr. T. Ka nn a n is a gra du ate
Name of the company Position held Committee
in business administration from the M adurai University.
membership
He is conne cted with a number of organisations related
Cabot India Limited Dire ctor Audit Committee to industry, education and charity. He is a member
Gillete India Limited Dire ctor Remuneration of Tamil Nadu State Council for Higher Education and
Committee Ap ex Le v el St a nding C ommittee on Industrial
Inapex Limited Dire ctor Development constituted by the Government of Tamil
India Satcom Limited Dire ctor Nadu. He was co-opted as a dire ctor of the company on
Pe arl Engineering Dire ctor Remuneration 27th J anuary 2000.
Polymers Limited Committee
He has a wide range of experienc e in textile industry. He
Result Servic es Limited Dire ctor
is the exe cutive committee member of The Indian Cotton
Timex watches Limited Dire ctor
Mills Federation Limite d, Mumb ai and The Tamil Na du
Wimco Limited Dire ctor Audit Committee C h a mb er of C ommer c e a nd Industry a nd w as the
Amit Investments (P) Limited Dire ctor Chairman of The Cotton Textile Export Promotion Council,
Adidas India (P) Limited Alternate Mumbai.
dire ctor
He was also the Chairman of CII (SR) during 2001-02.
Adidas India Marketing (P) Alternate
Limited dire ctor He is also a le ading educationalist and Se cretary and
Baxter India (P) Limited Dire ctor Correspondent of Thiagarajar College, Madurai and Vice
Be cton Dickinson India Dire ctor Chairm an & Correspond ent of Thiagarajar Colle ge of
(P) Limited Engineering, Thirupp arankundram, Madurai.
Dua Consulting (P) Limited Dire ctor He is a member of the audit committee and investors'
ELCA Cosmetics (P) Limited Dire ctor griev anc e committee of the company. Details of his
Fila Sports India (P) Limited Dire ctor other dire ctorship / memb ership of c ommittees are
Linde Proc ess Te Dire ctor given below:
chnologies India (P) Limited
Name of the company Position held Committee
McCann Erickson India (P) Alternate
membership
Limited dire ctor
McDonald’s India (P) Limited Dire ctor Thiagarajar Mills Limited Managing
Polaroid India (P) Limited Director dire ctor
ST Microele ctronics (P) Limited Dire ctor Virudhunagar Textile Chairman Share Transfer, Demat
TMX India (P) Limited Dire ctor Mills Limited and Shareholder
Tupperware India (P) Limited Dire ctor Grievance Committee
UL India (P) Limited Dire ctor Sundaram Textiles Limited Dire ctor
Westinghouse Ele ctric (P)
Colour Yarns Limited Dire ctor
Limited Dire ctor
Sundaram Brake Linings Limited Dire ctor Audit Committee

7
TVS MOTOR COMPANY
LIMITED

Annexure to notice
Explanatory statement pursuant to Section 173(2) of the Companies Act, 1956

The following explanatory statement sets out all the material

facts relating to the special business mentioned in the conne ctivity is being provided by the depository registrars,
M/s.Integrated Enterprises (India) Limited, Chennai.
accompanying notice dated 28th June 2004 and shall be taken
as forming part of the notice. Se curities Exchange Bo ard of India (SEBI) vide its circular
No. D & CC / FITTC/ Cir–15 dated 27th December 2002 has
Item no. 7 insisted that the company shall have a common agency for
In terms of Section 293(1)(d) of the Companies Act, 1956 (the handling the share registry work for both physical and electronic
Act), the board of dire ctors shall not borrow moneys where the transfers ie., either in-house by the company or by a SEBI
moneys to be borrowed together with moneys alre ady registered Registrar and Transfer Agent (RTA).
borrowed (other than the temporary loans obtained from the
The board of dire ctors have appointed Sundaram-Clayton
company’s bankers in the ordinary course of business) exceed
Limited (SCL) as share transfer agents to carry on the registry
the aggregate of the paid up capital and free reserves of the
work pertaining to transfer of shares in physical form and to
company except with the consent of the shareholders obtained
provide conne ctivity with the depositories for handling the
in a general meeting.
transactions taking plac e through d e positories in ele ctronic
The shareholders of the company, at the extraordinary general form. Consequently, the records as detailed in the resolution
meeting held on 30th June 1999, have accorded their consent to will have to be shifted to the share registry office of SCL. In
the board to borrow moneys in excess of the paid up capital terms of Section 163 of the Companies Act, 1956, approval of
and free reserves, provided, the aggregate ofsuch borrowings the shareholders is sought by a special resolution for keeping
together with moneys alre ady borrowed and outstanding at any the register and index of members and other records as set out
one time, shall not exceed Rs.250 crores. in the resolution to be kept outside the registered offic e of the
Considering the growth of the company sinc e 1999 and the company.
proposed expansion projects of the company and its proposal
Individual notic es will be sent to the shareholders 30 days in
to enterinto overse as market, the board of dire ctors have
advance of the date on and from which the appointment of
considered it desira ble to enhanc e the borrowing powers from
SCL as share transfer agent will take effe ct.
Rs.250 crores to Rs.750 crores. Accordingly, the resolution is
placed before the shareholders for their approval. A copy of the proposed special resolution is being delivered to
the Registrar of Companies, Tamil Nadu.
None of the dire ctors is in anyway concerned / interested in
the resolution. Mr. Venu Srinivasan, chairman and managing dire ctor, Mr. Gopal
Sriniv asan and Mr. T. K. Balaji, dire ctors, being dire ctors of
The dire ctors recommend the resolution to be adopted as an
Sund aram-Clayton Limited are deemed to be interested in the
ordinary resolution by the shareholders.
resolution.
Item no. 8 The dire ctors recommend the resolution for the approval of the
In terms of Section 163 of the Companies Act, 1956, (the Act), shareholders as a special resolution.
the register of members, index of members and register and
index of debentureholders, and copies of all annualreturns of By order of the board
the company prepared under Section 159 of the Act together
with copies of certificates and documents which are required to Chennai T. S. RAJAGOPALAN
be annexed thereto are required to be kept at the registered June 28, 2004 Secretary
offic e of the company.
Registered Offic e:
At present, the company is handling the share transfer work “ J ayalakshmi Estates”
in-house in respect of shares held in physical form. In respect of
24 (Old No.8), Haddows Road,
shares held in electronic form in the depositories, the electronic Chennai 600 006.

8
 TVS MOTOR COMPANY
LIMITED

2004, making a total of 130% absorbing a sum of Rs. 30.49 crores.

Directors’ The dire ctors have recommended no further dividend for the year
ended 31st March 2004.
report to
APPROPRIATIONS
the 3.
The company proposes to transfer Rs.120 crores to the general
shareholde reserve. An amount of Rs. 34.43 croresis proposed to be retained
in the profit and loss account.

rs
The dire ctors present the 12th annual report and the audited
accounts for the year ended 31 st March 2004.

1. FINANCIAL HIGHLIGHTS

Details Year ended Year ended % of

31-03-2004 31-03-2003 growth

QUANTITATIVE :
Sales: (Numbers in lakhs)

Motorcycles 7.07 7.18 -1.5

Mopeds 2.51 2.48 1.2
Scooters 1.89 1.53 23.5
Total vehicles sold 11.47 11.19 2.5
FINANCIAL (Rupees in crores)
Sales (net of excise duty) and
other income 2856.42 2725.40 4.8
EBITDA 295.63 283.88 4.1
Interest (net) 1.21 2.83 –57.2
Depreciation 79.89 79.91 —
Profit before tax 214.53 201.14 6.6
Provision for tax 76.04 73.19 3.9
Profit for the year ( after tax) 138.49 127.95 8.2
Surplus brought forward 32.63 23.17
Tax relating to earlier years (0.74) 1.40
Transfer from debenture
redemption reserve 9.90 9.90
Investment allowanc e reserve
withdra wn 3.04 —
Profit & loss account balanc e of
Lakshmi Auto Components Limited
up to 1st April 2003 6.77 —
Profit availa ble for appropriation 190.09 162.42
APPROPRIATIONS:
Interim dividend 31.41 27.72
Tax on dividend 4.25 2.07
Transfer to general reserves 120.00 100.00
Surplus carried forward 34.43 32.63

The figures for the financial ye ar under review include the

operations of engine components division of Lakshmi Auto
Components Limite d for the period 02.04.2003 to 31.03.2004,
which has since been merged with the company.

2. DIVIDEND
During the ye ar, the board of dire ctors de clared two interim
dividends viz., 60% on 17 th October 2003 and 70% on 21 st April
9
TVS MOTOR COMPANY
LIMITED
4. SHARE SPLIT shares of Rs.10/- e ach and consequently SACL has be come a
wholly owned subsidiary of the c omp any. SA CL rem ains as an
In ord er to enh a n c e sh arehold ers’ v alue, by in cre unliste d company.
asing substantially the number of shares availa ble for
trading in the market, the board of dire ctors decided to A statement relating to the subsidiary, M/s Sundaram Auto
C omponents Limite d, Chennai, and a c opy of its annual
split the equity shares of the c omp any of Rs.10/- e ach
into 10 e quity shares of Re.1/- each.
The proposal was approved by the shareholders by
resolution passed by them at the extraordinary general
th
meeting held on 8 December 2003. The new share
certificates of Re.1/- each were issued to the shareholders
in the month of April 2004 in respect of those who were
holding shares in physical form and were credited to the
beneficiary accounts of those holding shares in electronic
form on 20th May 2004.

5. AMALGAMATION OF LAKSHMI AUTO

COMPONENTS WITH THE COMPANY
On 17th October 2003, the board of dire ctors of the
company approved a scheme of arrangement between the
company viz. TVS Motor Company Limited (TVSM), Lakshmi
Auto Components Limited (LAC) and Sundaram Auto
Components Limited (SACL). Under the scheme, the assets
and lia bilities of the rubber and plastic businesses of LAC
were transferred to SACL on slump sale basis on 1st April
2003 for a consideration of Rs.12.25 crores.
In terms of the scheme which was approved by the Hon’ble
High Court of Madras vide its order dated 23rd March 2004,
SACL issued and allotted to LAC 24,50,000 equity shares of
Rs.10/- each at a premium of Rs.40/- per share as on 1st
April 2003 (the appointed date). The remaining business of
LAC viz., engine components division together with its
investments in other bodies corporate including the shares
allotte d by SACL to LAC in terms of the scheme were
transferred to and vested in the company with effe ct from
2nd April 2003 (the appointed date for this purpose).
In consideration of the amalgamation of engine components
division together with remaining business of LA C with the
company, the company allotted to the public shareholders of
LAC, 65,42,857 equity shares of Re.1/- each credited as fully
paid up (new shares). Consequently, the paid up capital of
the company has increased from Rs.23,10,00,700/- to
Rs.23,75,43,557/-. 89,20,000 equity shares of Rs.10/- each
held by the company in LAC were cancelled.
The new shares were listed in all the three stock exchanges
where the c omp any’s shares are presently liste d viz., The
Sto ck Exchange, Mumbai (BSE), National Stock Exchange of
India Limited (NSE) and Madras Sto ck Exchange Limited
(MSE). The shares were admitted for trading with effe ct
st
from 24th May 2004 in MSE and BSE, and from 31 May 2004
in NSE.
The new shares allotted in terms of the scheme of
arrangement rank pari passu with the existing equity shares
of the company from the effe ctive date viz., 1st April 2004,
the date on which the order of the Hon'ble High Court
approving the scheme was filed with the Registrar of
Companies, Chennai and accordingly were entitled for the
se cond interim dividend of Re.0.70 per share declared by
the board of dire ctors at its meeting held on 21 st April
2004.

6. SUBSIDIARY
In terms of the scheme of amalgamation, the investment
made by LAC in SACL was vested in the company with effect
from 2 nd April 2003 which comprises of 27,00,000 equity

10
TVS MOTOR COMPANY
LIMITED

accounts for the year ended 31 st March 2004 are attached to

the balance sheet pursuant to Section 212 of the Companies 11. STATUTORY STATEMENTS
Act, 1956. A consolid ated financial statement of accounts of
As per the requirements of Section 217(1)(e) of the Companies
our c omp any and Sund aram Auto C omponents Limite d, Act, 1956 read with the Companies (Disclosure of particulars in
(subsidiary) is annexed to this report as required by Accounting the report of board of dire ctors) Rules, 1988, the information
Stand ard 21 (AS 21) prescribed by The Institute of Chartered regarding conservation of energy, technology absorption and
Accountants of India (ICAI). foreign exchange earnings and outgo are given in Annexure I to
this report.
7. EXPANSION ACTIVITIES
The particulars require d pursu ant to Se ction 217(2A) of the
The company proposes to commence its three-wheeler project Companies Act, 1956 read with the Companies (Particulars of
in its present facility at Mysore and the proto-type development employees) Rules, 1975 as amended by Companies (Particulars
work is in progress. The company is exploring the possibilities of of employees) Rules, 2002 are given in Annexure II to this
setting up manufacturing facilities in South East Asian report.
countries.
Asrequired under Section 217(2AA) of the Companies Act,
1956, the dire ctors’ responsibility statement is given in
8. DIRECTORS Annexure III to this report.
There was no change in the constitution of the board of dire
ctors of the c omp a ny sinc e the last a nnual g eneral 12. ACKNOWLEDGEMENT
meeting. Mr. T. Kannan, Mr. N. Ganga Ram and Mr. C. R. Dua
The dire ctors gratefully acknowledge the continued support
retire at the ensuing annual general meeting of the company
and co-operation received from the holding company i.e. Sund
and being eligible, offer themselves for re-appointment.
aram- Clayton Limited, Chennai. The dire ctors wish to thank
the debentureholders, b ankers, financial institutions, investing
9. AUDITORS institutions, customers, dealers, vendors and sub-contractors
M/s Sundaram & Sriniv asan, Chartered Accountants, Chennai, for their valuable support and assistanc e.
retire at the ensuing annual general meeting and are eligible The dire ctors wish to place on record their appreciation of the
for re-appointment. excellent work done by all the employees of the company
during the year under review.
10. CORPORATE GOVERNANCE The dire ctors specially thank the shareholders for their
Asrequired by clause 49 of the listing agreement, a continued faith in the company.
management discussion and analysis report and a report on c
orporate governance are enclosed. A certificate from the For and on behalf of the board
auditors of the company regarding complianc e of the
conditions of corporate governance as stipulated by clause 49 Chennai VENU SRINIVASAN
of the listing agreement is attached to this report. June 28, 2004 Chairm an

11
 TVS MOTOR COMPANY
LIMITED

Annexure I to directors’ report to the

shareholders
Information pursuant to section 217(1)(e) of the Companies Act, 1956

A CONSERVATION OF ENERGY
b) Development of new products for new market segments with
1. Measures taken improved features and safety.
3. Expenditure on R & D: Rs. in crores
(i) TNEB Maximum Demand of 3650 KVA has been surrendered to reduce
demand charges; Capital expenditure 16.04
Revenue expenditure 59.59
(ii) W aste Heat Recovery from the HT DG exhaust system has been
implemented resulting in fuel savings; Total 75.63
(iii) 132Tons Vapour Absorption air conditioning system has been installed Total expenditure as a percentage of turnover 2.65 %
which runs on waste heat recovery from the DG high temperature water
circulation;
4. Data relating to imported technology:
(iv) Centralise d air conditioning for ‘ alpha shop’ is operated through waste
heat recovery from exhaust gases of DG set.
Technology Manufacture Manufacture Manufacture
The a bov e m e asures h a v e resulte d in a sa vings of imported of 2 stroke of 4 stroke of front
approximately Rs. 1.37 crores. 100 cc motor 150 cc motor forks for motor
cycles cycles cycles
2. Proposed measures
a. Ye ar of import
(i) Extending heat recovery hot water system to paint plants, fuel he ating (commercial
at CPP to achieve fuel savings and reduc e station power consumption at production) 1984 1999 1987
CPP.
b. Has te chnology
(ii) Achieving energy savings in air conditioning system at QAD blo ck been absorbed ? Yes Yes Yes
through Hot w ater he at re c ov ery by installing additional 132 ton
VAM AC system. c. If not absorbed, are
a where this
(iii) Implementation of waste heat recovery system in the new 3 MW HT has not taken plac e, Not Not Not
DG High temperature cooling water system and providing hot water to re asons therefore and a pplicable applicable applicable
OMT paint plant to eliminate running of boiler. future plans of action
(iv) Implementation of cost effe ctive energy saving proposals on hand in
both the plants viz. Hosur and Mysore. C. FOREIGN EXCHANGE EARNINGS AND
The above measures are expected to yield an annual savings OUTFLOW
of approximately Rs. 2.00 crores.
1. Export activities
B TECHNOLOGY ABSORPTION
During the year, the thrust on exports continued and the
1. Specific areas in which R&D is carried out by the company: export turnover grew by more than 175%. Export coverage
a) Design and development of 100cc 4 stroke engine for motorcycle has been increased to more than 20 countries. Steps are
application; being taken to improve the sales in Asian, African and
b) Development of VT-i technology forreduction of friction, Latin American countries.
combustion improvement and fuel saving; and
c) Design work for improving NVH, ride-c omfort, vehicle handling 2. Total foreign exchange used and earned
and road safety.
2. Future plan of action: Rs. in crores
a) Development of technology for reducing emission and improving Foreign exchange used 112.75
fuel economy in 4 stroke engines; and
Foreign exchange earned 69.48

For and on behalf of the board

Chennai VENU SRINIVASAN

June 28, 2004 Chairm an

12
TVS MOTOR COMPANY
LIMITED

Annexure II to directors’
report to the shareholders
Particulars of employees as per section 217(2A) of the Companies Act, 1956

Sl. Name Age Designation Date of Remu- Qualification Experience Previous employment
No. (Yrs.) employment neration (Yrs.)

(Gross)
Rs.

EMPLOYED THROUGHOUT THE YEAR

1 Arvind Pangaonkar 59 G eneral Manager - R&D 01.09.1987 24,17,444 D.M.E., A.M.I.E. 40 Member - R & D, Sundaram -
Clayton Limited.
2 C e cil Kanagaraj Dewars 55 Vic e President - 28.02.2001 26,22,440 B.A. 32
G eneral Mana ger,
Coca-Cola India Limited.
Corporate Communication
3 Chandramouli R. 45 Vic e President - Sales 19.12.1988 40,87,657 B.E.(Agri.), 20 Asst. Manager - Sales, and
marketing P.G.D.B.M. Escorts Limited.
4 Devarajan S. 46 Vic e President - 03.11.1997 41,76,261 M.S.(Engg.)
B.E(Me ch.),arwick 23 P.E. Incharge, Delphi
Production Engineering P.G.D.B.A.,WM.B.A., Automotive Systems
5 Goindi H.S. 46 Vic e President - 29.01.2001 33,30,653 21 G eneral Manager - Sales
International Business B.E., P.G.D.M.
and Marketing,

6 Harne Vinay Chandrakant 45 Vic e President - R & D 01.09.1987 46,47,251 B.E.(Me ch.), 21 Mahindra Holiday Resorts.
M.Te ch. Member- R & D, Sundaram-
7 Dr. J abez Dhinagar S. 40 Vic e President- A.E.G. 17.06.2002 26,74,166 M.E. (Automobile 12 Clayton Limited.
Le ad Designer, GE
Engg.) Transpor- tation Systems
Engineering
8 Kovaichelvan V. 47 Vic e President - HR & TQC 21.05.1984 41,22,486 B.E. 24
C entre.
Limited.
9 Kulkarni P.V. 44 G eneral Manager - 01.09.1987 24,68,287 B,E. M.Te ch. 20 Exe cut Kunal Engineering
Engineer,
Motorcycles S ive- Clayton
- oPrduct Planning,
Limited.
undaram
10 Mathew P.C. 53 Exe cutive Vic e President 30.08.2001 48,92,954 B.E.(Hons.) - 31 Vic e President &
Me chanical G eneral Manager,
BBA Chemicals division,
Bush Boake Allen Inc.
11 Mohammed Basha Sheik 47 G eneral Manager - R&D 01.09.1987 28,10,843 B.Te ch. (Me ch) 21 Member - R&D, Sundaram -
M.Des. Clayton Limited.
12 Murali S.G. 53 Vic e President-Financ e 15.07.2002 38,21,706 B.Com. A.C.A. 32 G eneral Manager-
Commercial,
Hindustan Lever Limited.
13 Muthuraj M. 48 Vice President - Operations 01.10.1984 41,09,945 D.M.E., B.Te ch., 27 n
Asst. Engineer, Hindusta
14 Radhakrishnan K.N. 41 Vic e President - Business 15.09.2000 41,44,295 M.Te ch. 18
M.S. B rown Boveri Limited.
Planning (Maint. Engg. G eneral Manager-
Planning,Sundaram-Clayton
and management) Limited. Business
15 Rajagopalan S. 62 Vic e President - Industrial 04.09.1995 33,89,091 Personn
44 el Manager, Coats
V dia) Limited.
B.Com., L.L.B.,
16 Ramachandra Babu Y. 48 G eneral Manager - R&D 02.11.1984 29,17,066 .G.D.B.M.
B.Te ch. (Auto), 24 iyella (In ent Engineer,
Developm
Relations P
17 Raman C.P. 63 President 01.02.1998 1,19,13,492 M.S. (Warwick) Enfield India Dire
Managing Limited.
ctor,
B.Te ch. 43
E mited.
18 Simha B.L.P. 41 Vic e President- Materials 10.12.1990 40,55,547 B.E., M.S. (W arwick) 20 vere ady Industries Li
Member, Manufacturing
systems, Sundaram-Clayton
19 Sundaresan R. 44 Vic e President- Quality 01.09.1987 36,59,101 B.Te ch. 21 Limited.
Asst. Superintendent-
Limited.
Quality,
G ener Sundaram-Clayton
format al Manager-
20 Venkat Iyer 42 Chief Information Offic er 12.04.2001 27,31,398 B.Sc., M.B.A. 19
(Marketing India)
M.B.A.(Information In
X ionicorp
Te chnology,
Limited.

Systems U.S.A.) erox Mod

EMPLOYED FOR A PART OF THE

YEAR
1 Dhandapani T.G. 47 General Manager- Finance 01.11.1996 6,45,418 B.Com., A.C.A. 27 G eneral Manager - Financ e,
Sundaram - Clayton Limited.
2 Venkat Subramanian B. 41 G eneral Manager - 19.07.2002 13,57,214 B.E. (Me ch.), 17 G eneral Manager - Exports,
Marketing
1 Years of experience also include experience prior to joining .G.D.M undaram - Clayton Limited.
the company. P S
Notes:
2 Remuneration comprises of salary, house rent allowance, contribution to provident fund and superannuation fund, medical reimbursement, medical insurance premium, leave travel assistance and other
benefits evaluated under Income tax rules.
13
TVS MOTOR COMPANY
LIMITED
3 Besides, employees are entitled to gratuity as per rules.
4 None of the employees is related to any of the directors of the company.
5 Terms of employment of all the employees mentioned above are contractual.
6 None of the employees either individually or together with spouse or children held more than 2% of the equity shares of the co mpany.
Chennai For and on behalfVENU
of theSRINIVASAN
board
June 28, 2004 Chairman

14
TVS MOTOR COMPANY
LIMITED

Annexure III to directors’ report to the

shareholders
Directors’ Responsibility Statement as required under section 217(2AA) of the Companies Act, 1956.

Pursuant to the requirement ofsection 217(2AA) of the

Companies Act, 1956 with respect to Dire ctors’ Responsibility iii. that the dire ctors had taken proper and sufficient care for the
maintenance of adequate accounting recordsin accordance with the
Statement, it is hereby stated: provisions of the Companies Act, 1956 forsafeguarding the assets of the
company and for preventing and detecting fraud and other irregularities;
i. that in the preparation of annual accounts for the financial ye ar ended and
31st March 2004, the applica ble Accounting Stand ards had been
followed along with proper explanation relating to material departures; iv. that the dire ctors had prepared the accounts for the financial year ended
31st March 2004 on a “ going concern basis”.
ii. that the dire ctors had selected such accounting policies and a pplied
them c onsistently and ma de judgements 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 For and on behalf of the board
of the company for the year under review;

Chennai VENU SRINIVASAN

June 28, 2004 Chairm an

15
TVS MOTOR COMPANY
LIMITED

Managemen
t Discussion Variomatic scooter
Variomatic scooters constitute about 11.5% of the total two-
and wheelers and sales grew by 22.8% during 2003-04. The
company has recorded a growth of 24% and a market share of
Analysis 29% in the variomatic scooters during the year. The cumulative
sales of TVS Scooty crossed the one million mark in March
Report 2004.

TVS Motor Company Limited is an active player in all the main

product categories of the two-wheeler market viz.,
motorcycles, scooters and mopeds.
The company for the second consecutive year crossed the one-
million-mark, re cording sales of 1.15 million two-wheelers with
gross revenue of Rs.2856 Cr. and PBT of Rs.214.50 Cr.

INDUSTRY STRUCTURE AND DEVELOPMENTS

16
 TVS MOTOR COMPANY
LIMITED
Moped
The two-wheeler industry in India has grown at an annual
compounded rate of 12% for the last 10 years. This growth has The company’s leadership in mopeds was further strengthened
with a market share of 73.5%.Though mopedsin general
been fuelled by the 27% growth in motorcycles and 25% in the
declined by 5.5%, the company posted a growth of over one per
variomatic scooters.
cent, which demonstrates the company’s continued dominance
During the year 2003-04, the two-wheeler industry grew by of the consumer’s mind in this category.
11.4%. India continues to remain the second largest global two-
wheeler market after China, with a market size over 5.6 million International business
units. The share of motorcycles has further increased from
74.3% to 76.7% as a result of 15% growth over the last year. The The company increased exports by 176% to Rs.69 crores from
category share of variomatic scooter has also increased from Rs.25 crores during the current year and this will continue to be
10% to 12% with a volume growth of 23% over the last year. The a focus area for growth. In the year 2003-04, six new countries
category share of geared scooters and mopeds continued to were added to the company’s global presence.
decline.
OPPORTUNITIES & THREATS
BUSINESS OUTLOOK AND OVERVIEW New products launched in 2003-04 have found encouraging
The two-wheeler industry is closely linked to the general level m arket response a nd they are exp e c te d to c ontribute
of e conomic activity. The Indian e conomy is expe cted to grow significantly to growth during 2004-05.
around 7% during 2004-05. The indications are that the
In the economy segment of the motorcycles, the company is
monsoon will be normal and hence rural economy will grow at currently operating only with 2-stroke models, the share of
a good rate. This will consequently lead to a growth rate of 9% which is dropping drastically due to a dverse industry trends.
to 10% in the two-wheeler industry during 2004-05. This deficiency will be corre cted by launching a 4-stroke bike
in the economy segment in the year 2004-05.
COMPANY PERFORMANCE
Executive and Premium motorcycle segments are expected to
New product launches see new model launches from competitors. The company will
During the year 2003-04, the company succ essfully launched counter this by strengthening presence in these segments with
multiple products: new products and variants.

• TVS Centra – 4-stroke 100cc motorcycle in the executive segment The heavy variomatic scooter segment accounting for 6% share
with VT-i technology to give excellent mile age of the two-wheeler industry is growing and more new products
are exp e c te d. C urre ntly the c omp a ny do es not h a v e
• New Victor GL – an upgrade of TVS Victor incorporating 21
improvements with new look representation in this segment and this will be a focus area for
future.
• Fiero F2 & Fx – upgrades of 4-stroke 150cc Fiero in the premium
motorcycle segment The category share of moped has been continuously declining
• Scooty Pep – 4-stroke 75cc stylish variomatic scooter from 10% in 2001-02 to 6% in 2003-04, thus reducing the scope
for further growth.
Motorcycle
RISKS AND CONCERNS
The executive motorcycle segment dominates the motorcycle
category with a share of 60%. TVS Victor, one of the leading Raw material pric es viz. steel, nickel and copper have
brands in this segment has sold 9 lakh units since its launch in increased considerably during 2003-04. It is expected that the
the third quarter of 2001-02. The recently launched TVS Centra, pric es of steel and aluminium may continue to remain firm in
which is positioned in thissegment, crossed 30,000 vehiclesin the short term. It may not be possible to pass on the cost
sales within the first 70 days of launch. increases to the customer, leading to pressure on profitability.
Good two-wheeler industry growth in the past has resulted in
In the 4-stroke motorcycles, the range comprising of Centra, creation of excess capacity. If growth rate comes down, it will
Victor and Fiero posted a higher growth of 28% compared to
affe ct the ca p acity utilisation a nd would also in cre ase
the industry growth of 22% in the 4-stroke motorcycle segment
competition and promotion cost. The increased number of new
during 2003-04.
modelsrequired to meet customer needs will add to the
In the economy motorcycle segment, the company is currently product development cost and can exert pressure on margin.
represented by only 2-stroke motorcycle (Max). During the year The company proposes to meet the challenges through flexible
the demand for 2-stroke motorcycles declined by 46% which manufacturing and Total Productive Maintenanc e (TPM) to
resulted in a 43% decline in 2-stroke volume for the company. improve asset productivity. The cost reduction initiatives are
Due to this, overall motorcycle market share for the company further intensified with the help of global sourcing and value
dropped from 19% to 16.4%. engineering.

17
TVS MOTOR COMPANY
LIMITED

OPERATIONS REVIEW technologies developed in the two-wheeler industry. The VT- i

engine is
Quality

Towards reaching world class levels in quality, the company has

formed a special task force comprising more than fifty
engineers working on all quality related performance measures
leading to improvements in design and processes. The company
continues to have the distinction of being the only two-wheeler
company in the world to have been bestowed with the
prestigious ‘Deming Award’.

Significant achievement has been made in improving internal

efficiencies in new product development and design by better
understanding of customer needs and product usage
conditions. Structured customer visit programmes are
conducted to capture customerresponse and expectations.
Suppliers and machine tool builders are involved at early stage
of product development. Quality proving done in-house and at
suppliers end resulted in defect free products and fast ramp
up.

The company has continued to achieve 100% participation of

employees in TQM. The employees have completed more than
1,468 projects through QC Circles in 2003-04.The average
number of suggestions implemented per employee has gone
up from 41 to 44.

Cost management and lean manufacturing

The company has a rigorous system of cost deployment, which
is monitored on a continuous b asis and owned across the
organisation. The initiatives on “ e-buying and global sourcing”
have resulted in substantial cost savings.

Progress in JIT and TPM implementation has been significant.

Activities are being planned for one of the plant to go for the
final audit of the TPM Exc ellen c e Aw ard during 2004-05. By
implementing TPM, the manufacturing c ells could achieve
significant cost reduction. Implementation of mixed model
production in the manufacturing plant hassubstantially
reduced the inventory while improving the delivery of
products.

The company has a full-time supplier development te am for

improving quality and delivery. TPM and JIT clusters have been
formed for implementation of best practices across identified
suppliers.

Research and development

The Company’s R&D team has a strong technical talent pool
and modern computer aided labs, capable of developing new
and innovative designs. At present more than 400 engineers
are working on the development of new products and in other
advanced areas of technology. During 2003-04 the company
has applied for 17 patents. The company works with leading
te chnological rese arch labs and institutions across USA, UK,
J apan, G ermany and in India for development and testing of
advanced technologies.

The R&D team has developed the revolutionary Varia ble Timing
Intelligent (VT-i) Engines, one of the most innovative
18
 TVS MOTOR COMPANY
LIMITED
designed to deliver superb performance on fuel efficiency
based on three fundamental actions namely varia ble
ignition timing, superior combustion of fuel and reduction
of fuel wastage. TVS Centra was the first motorcycle to
come out with VT-i Engines.

Information technology
Enterprise Resource Planning (ERP) hasstabilised in the
company. SAP system integrates all processes of
manufacturing, materials, financ e, sales, quality and plant
maintenanc e across the company’s manufacturing plants,
area offices and warehouses across India.

As a part of strengthening the data security the company

has completed Phase 1 of the Disaster Re covery (DR) setup
in 2003-04.

In continuation of CRM initiative, the company has

established B2B portal for its de alers, which a ddresses all
d aily routine processes and reports between the company
and its dealers.

The company has successfully rolled out a Dealer

Management System (DMS) at select dealerships. DMS will
help us to get all real time customer sales and servic e
information and help in standardising best practices in
dealership. During 2004-05, DMS will be extended to cover
all major dealerships.

Safety
Safety management is integrated with the company’s
overall Environment, Health and Safety (EHS) management
system and “ Achievement of Zero Accidents” is taken up
as the company’s goal. Based on OHSAS18001 guidelines
and TPM methodologies, following me asures have been
taken to achieve the above target.

• Safety inspection and audits by safety professionals and plant

safety committees.
• Safety induction training for all employees and specific
training programmes in first aid, fire fighting and job related
safety topics on a continuous basis.
• Periodical “ Mo ck drills" to test the effe ctiveness of
emergency preparedness plan.
All the above initiatives have helped to significantly reduce
the accident levels.

Financial performance
The financial performance for the year 2003-04 as
compared to the previous year is furnished in the following
table:
Ye ar 2003-04 Ye ar 2002-03
PARTICULARS Rs in Rs in
crores % crores %
Sales:
Mopeds 327.88 11.5 318.72 11.7
Motorcycles 1,940.05 67.9 1,952.94 71.7
Sc ooters 386.19 13.5 292.58 10.7
Sp ares and acc essories 166.09 5.8 140.29 5.1

19
TVS MOTOR COMPANY
LIMITED
Other inc ome 36.21 1.3 20.87 0.8
TOTAL INCOME 2,856.42 100.0 2,725.40 100.0

20
TVS MOTOR COMPANY
LIMITED
them.The company enjoys good brand image in businessschools
Ye ar 2003-04 Ye ar 2002-03
PARTICULARS Rs in Rs in
crores % crores %

Ra w materials c onsumed 1,855.17 64.9 1,858.68 68.2

Staff c ost 133.75 4.7 103.96 3.8
Stores and tools c onsumed 37.52 1.4 22.82 0.9
Power and fuel 29.34 1.0 20.85 0.7
Rep airs and maintenanc e 31.73 1.1 21.61 0.8
P acking & freight charges 70.86 2.5 66.27 2.4
Advertisement & publicity 105.55 3.7 105.94 3.9
Other selling expenses 187.74 6.6 137.03 5.0
Other expenses 109.13 3.8 104.36 3.9
Interest 1.21 — 2.83 0.1
Depre ciation 79.89 2.8 79.91 2.9
TOTAL EXPENDITURE 2,641.89 92.5 2,524.26 92.6
PROFIT BEFORE TAX 214.53 7.5 201.14 7.4
Provision for tax
(incl. Deferred tax) 76.04 2.6 73.19 2.7
PROFIT AFTER TAX 138.49 4.9 127.95 4.7

The company has declared two interim devidendstotalling to

130% for the current financial yeari.e. Rs. 1.30 pershare on a
face value of Re.1/- each.
Some of the key ratios for the current year are furnished in the
following table:

DESCRIPTION UOM 2003-04 2002-03

EBITDA / turnover % 10.4 10.4

Profit before tax / turnover % 7.5 7.4
Return on ca pital employed % 30.1 34.2
Return on net worth % 28.1 34.3
Earnings per share
(on a fac e value of Re.1/- per Rs. 5.83 5.54
share)
The company was rated No.1 for being the most investor
friendly company by "Business Today" magazine.

Internal control systems and their adequacy

The company has a robust internal control system to ensure
that all the assets of the company are safeguarded and
protected against any loss.
The Enterprise Resource Planning (ERP) is working satisfactorily
and all the internal controlsystems are constantly evaluated and
upgraded by an extensive review carried out by the internal
audit dep artment. Regular valid ation is being done through
an external auditor in the area of computer information
security. We have also strengthened the ERP authorization
profile across all functions to ensure data security and
confidentiality.

Human resource development

The company believes that attracting, developing and retaining
the best talent is key to the success of the business. Therefore
it focuses on attracting the best talent from all over the country,
then developing them through skill enhancement and retaining

21
TVS MOTOR COMPANY
LIMITED
and technical institutes, which enable it to attract and opportunities to women in the adopted villa ges. The initiatives
internally groom the best talent. have benefited 689 families in these villa ges to move above
poverty line.
A systematic orientation / induction programme for entry-
level and mid-career re cruits is in plac e. Career d
evelopment workshops are conducted for entry
levelrecruits for their potential evaluation, based on which
their developmental needs are identified. A focusse d skill
development program has been initiated for all the
functions based on skill mapping. Many training modules
are being developed internally using “Instructional Design
Methodology” with clear objectives to measure training effe
ctiveness.

Employee engagement score through Gallup survey is one

of the indicators of morale and c ommitment to the job.
th
The employee engagement score has improved from 66 to
st
71 percentile in the recent Gallup employee morale
survey.
Currently we have a young and energetic management
team at the helm of affairs. Leadership development is a
key focus area for the company. With the help of succession
planning, job rotation and le a dership development
initiatives, we ha ve created a strong cadre of highly
effective managers.
As a part of our commitment towards welfare of the
employees a nd their fa milies, se v eral d e v elopmental
progra ms like person ality development workshop and
career guid anc e workshops have been conducted for the
employees’ children apart from the functions like Founder’s
Day and Family Sports Day.
As on 31st March 2004, the company had 4,431 employees
on its rolls.

Environment
The company is committed to protection of the
environment through adoption of new processes and
elimination of hazardous wastes.
Adoption of “Clean Technology” is given the highest
priority in all the manufacturing locations. In line with this
policy, new water based painting technology and powder
coating system have been introduc ed, whose pollution
loads are far lower than conventional painting process.
A microbiological b ase d tre a tm e nt syste m h as b
ee n commissioned for the paint booth wastewater to
reduce the Biological Oxygen Demand (BOD) and
Chemical Oxygen Demand (COD) in the treated effluent. A
well-equipped in-house environmental laboratory is
established at Mysore and all the important effluent
parameters including ambient air quality are monitored.
Waste heat generated from the power generating set is
utilised for pro c ess he ating of the Cathodic Ele ctro
Deposition ( CED).

Community development and social responsibility

As a c orporate citizen, the c omp any belie ves in its so cial
responsibility and has involved itself in several c ommunity
development activities by contributing significantly towards
improving the standard of living of the people in the 51
adopted villa ges.

Economic development
People below the poverty line in these areas have been
enabled to earn their livelihood by extending the activities
of the income generation programs and providing e arning
22
 TVS MOTOR COMPANY
LIMITED

Infrastructure development school children were conducted. All these initiatives helped in
The company is actively involved in the community bringing the enrolment level for primary education to 98% in
development of the villa ges including provision of the a dopted villa ges and a pproximately 7,500 students ha
infrastructure facilities such as housing, sanitation, roads, ve benefited from it. Adult literacy programs helped in
drains, bus shelter, medical centre and natural resources educating 4,814 persons to become self sufficient in reading
management. and writing.

Safe drinking water Cautionary statement

The company teamed up with Tamil Nadu Water Supply and Statements in the management discussion and analysis report
Drainage Board to provide clean and potable water to about describing the company’s objectives, projections, estimates and
one lakh Hosur residents. This was made possible by expectations may be “forward looking statements” within the
meaning of applica ble securities laws and regulations. Actual
upgrading the Kelavarapalli dam water treatment project.
results could differ materially from those expressed or implied.
Important factors that could make a differenc e to the
Education and litera cy company’s op erations includ e, a mong others, e c onomic c
In addition to providing infrastructure facilities like new onditions affe cting demand / supply and pric e conditions in
buildings forschool, the company helped in starting computer the domestic and overse as markets in which the company
education program for school children. Dental care camps, eye operates, changes in the Government regulations, tax laws and
camps, he alth che ck-up programs and nutrition program for other statutes and incidental factors.
primary

23
TVS MOTOR COMPANY
LIMITED

Report on
Corporate has an executive chairman, atleast 50% of the members
of its board should be independent dire ctors. Thus the
Governanc board composition is in conformity with clause 49 of the
listing agreement.
e (b) Number of board meetings
During the year 2003-2004, the board met 4 times on
1. Company’s philosophy on code of governance 18th April 2003, 18th July 2003, 17th October 2003 and
The company truly believes in transparency, professionalism 23rd J anuary 2004.
and accountability, which are the basic principles of
P articulars of attend anc e of dir e ctors at the bo ard
corporate governance and will constantly endeavour to meetings and at the last annual general meeting,
improve on these aspects. number of memberships held by the dire ctors in the
boards of other companies and memberships /
2. Board of directors chairmanships held by them across committees of all the
(a) ) Composition and category of dire ctors companies are furnished in the table given below:

The present strength of the board is 9 dire ctors with

Mr. Venu Srinivasan as executive chairman & managing
dire ctor. As against this, six dire ctors viz., M/s. T. K.
Balaji,
T. Kannan, N. Ganga Ram, C. R. Dua, K. S. Bajpai and
C. V. R. Panikar are independent dire ctors. Asthe
company

Name Category Attendanc e Number of other dire ctorships and

particulars committee member / chairmanships
M/s. Board meetings Last annual Other Committee Committee
attended general meeting dire ctor- member- chairman-
during the ye ar ships* ships** ships

Venu Srinivasan E 4 Yes 15 5 3

Gopal Srinivasan NE 2 Yes 14 2 —

T.K. Balaji NE-I 4 No 14 7 3

H. Lakshmanan NE 3 Yes 13 8 3

T. Kannan NE-I 2 Yes 5 4 —

N. Ganga Ram NE-I 4 Yes 5 4 2

C.R. Dua NE-I 3 Yes 22 4 —

K. S. Bajpai NE-I 1 No — — —

C. V. R. Panikar NE-I 3 Yes 5 1 1

E : Executive NE-I : Non Executive - Independent

NE : Non Executive

*includes private companies

** including committees where the dire ctor is also chairman.

None of the dire ctors is a member of more than 10 board level committees or chairman of more than 5 such committees as required
under clause 49 of the listing agreement.

24
TVS MOTOR COMPANY
LIMITED

3. Audit committee
Particulars of sitting fees / remuneration and
3.1 The audit committee consists of three independent dire ctors as its memb commission paid to directors during the financial
ers viz., M/s. N. Ga ng a Ram, T. K. Balaji and
T. Kannan. Mr. N. Ganga Ram isthe chairman of the year 2003-2004.
committee. (excluding fee paid to the dire ctors by Lakshmi Auto
3.2 The terms of reference stipulated by the board of dire ctors to the audit Components Limited)
committee are, as contained in clause 49 of the listing agreement and
Section 292A of the Companies Act, 1956, brief particulars of which are Name of the dire Sitting fees Commission Total
furnished below: ctor (M/s.) (Rs.) (Rs.) (Rs.)
a. Overseeing of the company’s financial reporting process and the Venu Srinivasan* — 1,06,64,432 1,06,64,432
disclosure of its financial information to ensure that the financial Gopal Srinivasan* 15,000 — 15,000
statements are corre ct, sufficient and credible. T.K. Balaji* 50,000 3,60,000 4,10,000
b. Re c ommending the a ppointment a nd remov al of external H. Lakshmanan 25,000 — 25,000
auditors, and fixation of audit fees. T. Kannan 30,000 3,60,000 3,90,000
N. Ganga Ram 75,000 3,60,000 4,35,000
c. Reviewing with management the annual and quarterly financial
statements before submission to the board. C.R. Dua 20,000 3,60,000 3,80,000
K.S. Bajpai 10,000 3,60,000 3,70,000
d. Reviewing with the management, external and internal auditors, the
adequacy of internal control systems. C.V.R. Panikar 15,000 3,60,000 3,75,000
e. Reviewing the internal audit function and discussion with internal * Mr. Venu Srinivasan and Mr. Gopal Srinivasan being brothers,
auditors any significant findings and follow up thereon. are relatives. Mr.T. K. Balaji, being their sister’s husb and,
isrelated to both of them under the provisions of Se ction 6
f. Discussion with external auditors regarding audit plan, as well as
post-audit discussion to asc ertain any are a of concern. of the Companies Act, 1956.
g. Other matters as set out in the listing agreement. The remuneration payable to the chairm an and managing
dire ctorisfixed by the board of dire ctors within the limits
Meetings and attendance during the year approved by the shareholdersin terms of the Companies Act,
1956.The board has not constituted a remuneration committee
Name of the Date of the meeting as there is no requirement for constitution of such a committee.
dire ctor(M/s.)
18.04.2003 18.07.200 17.10.2003 23.01.2004 5. Investors' grievance committee
3 The investors' grievanc e committee consists of three members
viz., M/s. N. Ganga Ram, and T. Kannan, independent dire ctors
N. Ganga Ram Present Present Present Present and Mr. Venu Sriniv asa n, c h airm a n a nd m a n a ging dire
T.K. Balaji Present Present Present Present ctor. Mr. N. Ganga Ram is the chairman of the committee.
T. Kannan Absent Present Present Absent The committee oversees and reviews all matters conne cted
with share transfers, issue of duplicate share c ertificates, etc.
4. Remuneration to directors The committee also looks into redressal of investors’ grie vanc
Mr. Venu Srinivasan, chairman and managing dire ctor was es pertaining to transfer ofshares, non-re ceipt of balance sheet,
not paid any remuneration since his appointment on and non- receipt of declared dividends, etc., The company, as a
th st
from 24 April 2000 till 31 March 2001. However, the matter of policy disposes investor complaints within a span of
board at its meeting held on 26th April 2002 de cided that seven days.
Mr. Venu Sriniv asan, chairman and mana ging dire ctor,
As required by Securities and Exchange Board of India (SEBI),
be p aid remuneration by way of commission not exceeding Mr. T. S. Rajagopalan, se cretary of the company has been
2% of the net profits of the company, calculated in terms of appointed as complianc e officer. For any clarification /
Section 349 of the Companies Act, 1956, effe ctive 1 st April complaint, shareholders may contact Mr. T. S. Rajagopalan,
2001, as may be determined by the board from time to secretary or Mr. P. Srinivasan, special officer of the company.
time.
Complaints received and redressed during the year 2003-2004:
In terms of Section 309 of the Companies Act, 1956,
necessary resolution approving the payment of S.No Nature of complaint No. of complaints
remuneration by way of commission to Mr. Venu Srinivasan, 1. Non receipt of share certificates 14
chairman and managing dire ctor of the company effe ctive 2. Non receipt of dividend warrants 36
1st April 2001 was passed at the annual general meeting 3. Other complaints 3
held on 20th September 2002. This payment is subject to the Total 53
overall limit as prescribed under Section 309 of the st
Companies Act, 1956 read with Schedule XIII thereto. The All the above complaints were resolved and as on 31 March
2004 there were no investor complaints pending.
company paid sitting fees of Rs.5,000/- to all the non-exe
cutive dire ctors for attending each meeting of the board All requests for dematerialisation of shares were carried out
and / or committee thereof till 22nd J anuary 2004. The fee within the stipulated time period and no share certificates were
st
was enhanc ed to Rs.10,000/- per meeting w.e.f 23rd J pending for dematerialisation as on 31 March 2004.
anuary 2004.
6. Secretarial audit report regarding reconciliation of
Non-exe cutive independent dire ctors are paid
remuneration by way of commission not exceeding 1% of capital
the net profit of the company subje ct to a maximum of As requir ed by SEBI, c ommencing from the quarter ended
Rs.3,60,000/- per annum payable quarterly for a period of 31st De c ember 2002, a quarterly audit was conducted by a
five years w.e.f 1st April 2003. practising company secretary, reconciling the issued and listed
capital of the company with the aggregate of the number of
shares held by investors in physical form and in the depositories
and the said certificates were submitted to the stock exchanges

25
TVS MOTOR COMPANY
LIMITED
within the prescribed time limit.
st
As on 31 March 2004, there was no difference between the
issued and listed capital and the aggregate of shares held
by investors in both physical form and in electronic form
with the depositories.

26
TVS MOTOR COMPANY
LIMITED

7. Splitting of shares release and presentations made to institutionalinvestors

At the extraordinary general meeting held on 8 th December / analysts.
2003, the proposal to sub-divide the equity shares of the
company with face value of Rs.10/- each into equity shares (d) As required by clause 49 of the listing agreement, the management
with fac e v alue of Re.1/- e ach w as a pprove d by the discussion and analysis report is annexed to the annual report.
shareholders and the new equity shares of Re.1/- each 11. General shareholder information:
were allotted to the shareholders on 27th December 2003.
11.1 Annual general meeting
8. General body meeting / extraordinary general Date and time : Frid ay, the 10th September 2004
meeting: at 10.15 A.M
Venue : The Music Academy
Location and time where the annual general meetings were New No.168 (Old No.306),
held during the last three years and the extraordinary
general meetings held in last year. TT K Road, Chennai 600 014
11.2 Financial calendar 2004-05 (tentative)
Year Location Date Time
Annual general
Annual G eneral Meetings meeting (next year) : September 2005
2000-2001 The Music Academy, 306, T.T.K. Financial reporting for
Road Chennai 600 014 21.09.2001 10.15 AM the quarter ending : Date of board meeting
2001-2002 The Music Academy, New No.168, 30th June 2004 : between 15th and 31st of July 2004
(Old No.306), T.T.K. Road, Chennai 600 20.09.2002 10.15 AM 30 September 2004 : between 15th and 31st
th

014 of October 2004

31st December 2004 : between 15th and
2002-2003 The Music Academy, New No.168,
31st of J anuary 2005
(Old No. 306), T.T.K. Road, Chennai 600 12.09.2003 10.15 AM
31 March 2005
st
: between15th and 30th of April 2005
014
11.3 Particulars of dividend payment (Interim dividend)
Extraordinary G eneral Meetings
2002-2003 The Music Academy, New No.168, First Second interim
Particulars
interim dividend
(Old No.306), T.T.K. Road, Chennai 600 08.12.2003 10.15 AM
dividend
014
Date of declaration 17th October 21st April 2004
2002-2003 The Music Academy, New No.168, 2003
(Old No. 306), T.T.K. Road, Chennai 600 19.01.2004 3.30 PM
Rate of dividend 60% 70%
014 Record date st
31 October
th
30 April 2004
None of the subjects placed before the shareholders in the last 2003
annual general meeting required approval by a postal ballot. Date of payment 5th November 7th May 2004
of dividend 2003
9. Disclosures Amount of
(a) Disclosures on materially significant relate d p arty transactions dividend paid Rs.13.86 crores Rs.16.63 crores
that may have potential conflict with the interest of the company Share capital 2,31,00,070 23,75,43,557
at large. equity shares equity shares
During the year the company has not entered into any of Rs.10/- Re. 1/- each
transaction of material nature with the dire ctors, their each
relatives or management which were in conflict with
11.4 Period of book closure : 1st Se ptemb er 2004 to
the interest of the company.
10th Se ptemb er 2004 (both d ays
The transactions with the promoters, its subsidiary and inclusive).
associate companies etc., of routine nature have been 11.5 Other record dates : 26th December 2003 for issue of sub
re porte d else where in the a nnu al re port as p er divided shares of Re.1/- each.
Accounting Stand ard 18 (AS 18) issued by The Institute
of Chartered Accountants of India. 23rd April 2004 for determining the
eligible shareholders of erstwhile
(b) Details of non-complianc e by the company, penalties, strictures Lakshmi Auto Components Limited
imposed on the company by stock exchanges or SEBI, or any for allotment of 65,42,857 equity
statutory authority, on any matter related to capital markets, during shares of Re.1/- each.
the last three years.
11.6 Listing of shares
None.
Name of the Stock Exchange Stock Code
10. Means of communic ation: Madras Stock Exchange (MSE)
The Stock Exchange, Mumb ai (BSE) 532343
(a) ) The unaudited quarterly financialresults of the company were
published in the English newspapers viz., The Hindu, Business National Stock Exchange
Line, Economic Times, Times of India, Navbharat Times, of India Limited (NSE) TVSMOTOR
Maharashtra Times and Business Standard and the Tamil version in ISIN allotted by Depositories
a Tamil daily viz., Dinamani.
(Company ID Number) Before sub-division
(b) The company has cre ated a web site addresse d as INE494B01015
www.tvsmotor.co.in (upto 26.12.2003)
After sub-division
(c) As required under clause 51 of the listing agreement pertaining to INE 494B01023
Ele ctronic Data Information Filing and Retrieval (EDIFAR), the (From 27.12.2003)
unaudited results and the quarterly distribution schedules as filed
with the stock exchanges are uploaded in SEBI-EDIFAR web-site. (Note : Annual listing fees for the year 2004-2005 were duly
These details are also published in the company’s web site. The paid to the above stock exchanges)
company makes use of its web-site for publishing official news
27
TVS MOTOR COMPANY
LIMITED

11.7 Stock market data ownership data (BENPOS) is downloaded periodically and the
changes on account of transfers are updated in the system.
The Stock National Stock
Exchange, Mumbai Exchange of India
Month (BSE) (in Rs.) Ltd (NSE) (in Rs.)
Month’s Month’s Month’s Month’s
high pric e low pric high pric e low pric e
e
April 2003 426.00 381.35 425.00 380.00
May 2003 570.00 415.50 554.90 407.05
June 2003 615.00 505.10 612.00 498.00
July 2003 608.90 488.00 615.00 530.00
August 2003 750.00 590.00 740.00 581.80
September 2003 879.00 700.30 870.00 652.00
O ctober 2003 944.00 815.30 940.00 825.00

November 2003 995.00 835.10 995.05 701.30

De c ember
2003*
(Upto 17th De c 1136.90 890.30 1134.00 901.00
ember
2003 – Fac e
value Rs.10/- per
share) 133.55 105.75 124.70 106.05
th
124.40 98.00 124.00 99.10
(From 18 De c
ember 2003 to 119.50 98.55 119.40 99.00
31st De c ember 105.90 82.10 106.00 84.00
2003) J anuary 2004
February 2004
March 2004
* Shares were quoted at the face value of Re.1/- at both the
exchanges w.e.f 18th December 2003.

11.8 Share pric e performance in comparison to broad based indices -

BSE Sensex and NSE Nifty
Company’s share pric e performanc e in comparison to
BSE sensex.
Percentage change in
Financial year Company’s share Sensex
pric e (%) (%)
2003-2004 +108.79 +83.38
2002-2003 +7.15 -12.12
2001-2002 +171.08 -3.75
Company’sshare pric e performance in comparison to NSE Nifty.

Percentage change in
Financial year Company’s share Nifty
pric e (%) (%)
2003-2004 +107.41 +63.36
2002-2003 +14.32 -3.98
2001-2002 +155.91 -1.62

11.9 Share transfer system:

The share transfers are done in-house. The share transfer
applications are processed within 15 days from the date of
receipt, subject to the documents being found valid in all
respects. In the demat segment, M/s. Integrated Enterprises
(India) Limited, Chennai are providing the conne ctivity with
National Se curities Depository Limited (NSDL) and Central
Depository Servic es (India) Limite d ( CDSL). The beneficial

28
TVS MOTOR COMPANY
LIMITED
Thus all the work relating to share registry in terms of both
physical and electronic shares is maintained by the
company in-house.

The dematerialisation and rematerialisation proc esses are

carried in-house. As far as electronic transfers are
concerned, the company captures BENPOS through
Integrated Enterprises (India) Limited.

As per SEBI guidelines, the company is providing the service

of transfer-cum-demat with effe ct from March 2000. Under
this system -
(a) The company, after effe cting transfer, sends an option letter to the
transferee indicating that the shareholder could receive the shares
either in physical or in electronic form;
(b) If the transferee opts to have shares in electronic form, the
shareholder has to approach a depository participant (DP) with the
option letter along with dematerialisation request form;
(c) ) The DP, based on the option letter, generates a demat request
and sends the same to the company alongwith the option letter
issued by the company;
(d) On receipt of demat request, the company dematerialises the shares
and credits the same to the demat account of the shareholder with his
DP.
In case the transferee does not wish to dematerialise the
shares orthe DRN is notreceived within 30 daysfrom the
date of option letter, the company despatches the share
certificates to the shareholders.

Shareholders are requested to note that as per circular no.

SEBI/MRD/cir-10/2004 d ated 10th February 2004 issue d
by Se c urities a nd Exc ha ng e Bo ard of India (SEBI) to the
depositories, the facility of transfer-cum-demat hassince
been withdrawn.

With a view to rendering prompt and efficient service to the

investors, the company has decided that the share registry
work p ertaining to the c omp a ny will b e h a ndle d by
M/S.Sundaram-Clayton Limite d (SCL), holding company.
SCL has registered with SEBI as share transfer a gents in
category II to carry on the share registry work of group as
st
well as associate companies with effe ct from 21 April
2004.

The board of dire ctors have appointed SCL as share

transfer agents to carry on the registry work pertaining to
transfer of shares in physical form and to provide conne
ctivity with the depositories for handling the
transactionstaking place through depositories in electronic
form. Consequently, the requisite records as detailed in the
resolution will have to be shifted to the share registry offic e
of SCL. In terms of Section 163 of the Companies Act, 1956,
approval of the shareholders is being sought by a
specialresolution forkeeping the register and index of
members and other re cords at a place other than the
registered offic e of the company.

Individual notices will be sent to the shareholders 30 days

in advance of the date on and from which the appointment
of SCL as share transfer agent will take effe ct.

29
 TVS MOTOR COMPANY
LIMITED

11.10 Shareholding pattern as on 31st March 2004

12.2 Publication of half-ye arly results:
Sl. No. Particulars No of shares % to total
of Re. 1/- e The half-ye arly results of the company are publishe d in
ach newspapers and in its web site www.tvsmotor.c o.in. and
1 Sund aram-Clayton www.sebiedifar.nic.in the official web site of SEBI. The
Limited and subsidiaries 13,50,00,000 58.44 results are not sent to the shareholders individually.
2 Persons acting in concert 16,68,690 0.72
3 Foreign Institutional 2,26,63,571 9.81 12.3 Postal ballot:
4 Investors NRI & OCBs 13,40,169 0.57
5 2,01,15,865 8.72 There is no subject proposed to be taken up in the ensuing
Public financial
6 67,14,980 2.91 annual general meeting scheduled to be held on 10 th
institutions Mutual funds
7 2,15,501 0.09 September 2004, requiring approval of the shareholders
Banks through postal ballot.
8 1,51,68,003 6.57
Other companies
9 2,81,13,921 12.17
Public
13. Request to investors:
Total 23,10,00,700 100.00
11.11 Distribution of shareholding as on 31st March 2004 Investors are requested to note the following procedure:
Share No of % No of % l If you are holding shares in physical mode, ple ase
holding shares members communicate the change of address, if any, dire ctly to
(Range) the registered offic e of the company at the above
Upto 5000 53,42,475 2.31 19,622 70.26 address.
5001-10000 38,92,455 1.69 4,051 14.50
10001-20000 40,14,712 1.74 2,367 8.48 l As required by SEBI, it is advised that the investors shall
furnish details of their bank account number and name
20001-50000 45,19,037 1.96 1,301 4.66
and address of the bank for incorporating the same in
50001-100000 24,38,921 1.05 314 1.12
the w arra nts. This would avoid wrong credits being
100001 & above 21,07,93,100 91.25 274 0.98
obtained by unauthorised persons.
Total 23,10,00,700 100.00 27,929 100.00
11.12 Out of 9,60,00,700 equity shares of Re.1/- each held by persons other l Investors who have not availed nomination facility are
than promoters, 8,68,70,279 shares have been dematerialised as on 31st requested to avail the same, by submitting the
March 2004 accounting for 90%. nomination form. The form will be made availa ble on
11.13 Plant Locations request.
Hosur :
TVS Motor Company Limited
Post Box No.4, Harita Investors are requested to kindly note that any dividend
Hosur 635 109, Tamilna which remains unencashed for a period of seven years
du. will get transferred to “Investors Education and
Tel : 04344 - 276780 Protection Fund ” in terms of se ction 205C of the C
Fax: 04344 - 276016 omp anies Act, 1956.
Email: ts.rajagopalan@tvsmotor.co.in
Mysore : Post Box No.1 l Members who have not encashed their dividend
Byathahalli Villa warrants in respect of dividends declared for the year
ge Kadakola Post ended 31st March 1997 and for any financial year
Mysore 571 311, Karnataka. thereafter may contact the company and surrender
Tel: 0821 - 2596560 their warrants for p ayment. Members are requested to
Fax : 0821 – 2596530/2596533 note that the dividend not claimed for a period ofseven
Email: g.ramachandran@tvsmotor.co.in years from the date they became due for payment shall

}
11.14 Address for investor correspondenc e be transferred to Investor Education and Protection
Fund (IEPF) in terms of Section 205C of the Companies
Act, 1956. Information

(i) For transfer / demate- in respect of unclaimed dividends due forremittanc e into
rialisation of shares, TVS Motor Company
Limited Share Transfer IEPF is given below :
payment of dividend
on shares and any Department
Particulars of unclaimed dividend ofTVS Motor Company Limited
other query relating “ J ayalakshmi
to the shares Estates” 24 Haddows
of the company; Road, Chennai 600 Date of
Financial Date of Date of
006 Year transfer to transfer to
(ii) For any query on declaration
annual report Tel : 044 – 2827 2233 special account IEPF
Fax: 044 – 2825 7121
Email : psco@scl.co.in 1996-1997 21.08.1997 08.10.1997 08.10.2004

Note : Applic able to all the shareholders irrespective 1997-1998 24.08.1998 11.10.1998 11.10.2005
of their mode of holding (physical or demat)
1998-1999 16.09.1999 03.11.1999 03.11.2006
12. Non-mandatory disclosure
1999-2000 21.04.2000 08.06.2000 08.06.2007
Interim 30
2000-2001 21.09.2001 27.10.2001 27.10.2008
TVS MOTOR COMPANY
LIMITED
12.1 Remuneration committee:

The board has not set up a remuneration committee as the

need for the same has not arisen.

31
TVS MOTOR COMPANY
LIMITED

Financial Date of Date of Date of Members are advised by the company well in advanc e
Year declaration transfer to transfer to before transferring the unclaimed dividends to IEPF.
special account IEPF Members are requested to note that as per the Companies
Act, 1956, unclaimed dividends onc e transferred to IEPF
2001-2002 01.03.2002 06.04.2002 06.04.2009 will not be refunded.
Interim
l Investors holding shares in electronic form are requested to
2002-2003 21.10.2002 26.11.2002 26.11.2009 de al only with their depository participant in respe ct of
1st Interim change of address, nomination facility and furnishing bank
2002-2003 09.06.2003 15.07.2003 15.07.2010 account number, etc.
2nd Interim
14. Composite scheme of arrangement
2003-2004 17.10.2003 22.11.2003 22.11.2010
1st Interim Consequent to the scheme of arrangement between the
company (TVS Motor Company Limited) (TVSM), Lakshmi
2003-2004 21.04.2004 27.05.2004 27.05.2011 Auto Components Limited (LAC) and Sundaram Auto
2nd Interim Components Limite d (SACL), approved by the Hon’ble High
Court of Madras vide its order dated 23rd March 2004, the
Particulars of unclaimed dividend of erstwhile Lakshmi Auto engine components business of LAC together with
Components Limited investmentsit had in other companies including the shares
allotted by SACL to LAC in terms of the scheme were
Financial Date of Date of Date of
Year transfer to transfer to transferred and vested in the company with effe ct from 2nd
declaration
IEPF April 2003.
special account
In terms of the scheme of arrangement:
1996-1997 21.08.1997 08.10.1997 08.10.2004
(a) ) LAC was dissolved without the process of winding up
1997-1998 24.08.1998 11.10.1998 11.10.2005 w.e.f. 1st April 2004.
1998-1999 16.09.1999 03.11.1999 03.11.2006 (b) the company issued and allotted 10 equity shares of Re.1/- each for
every 7 shares of Rs.10/- each held by the public shareholders of
1999-2000 25.05.2000 12.07.2000 12.07.2007 LAC aggregating 65,42,857 equity shares of Re.1/- each credited
as fully paid up on 24th April 2004.
Interim
(c) the paid-up capital of the company has been enhanc ed to Rs.
2000-2001 12.09.2001 18.10.2001 18.10.2008 23,75,43,557 comprising 23,75,43,557 equity shares of Re.1/- each.
(d) these new equity shares were listed and admitted for trading in the
2001-2002 01.03.2002 06.04.2002 06.04.2009 MSE and BSE on 24th May 2004 and in NSE on 31st May 2004.
Interim (e) investment of 27,00,000 equity shares of Rs.10/- each by LAC in
SACL was vested in the company. As these shares constitute
2002-2003 09.06.2003 15.07.2003 15.07.2010 100% of SACL’s equity share capital, SACL has become a
Interim wholly owned subsidiary of the company.

2003-2004 17.10.2003 22.11.2003 22.11.2010

interim

Auditors' certificate on compliance of the provisions of the code of

Corporate Governance in the listing agreement
To
The shareholders of TVS Motor Company Limited, Chennai
We have examined the complianc e of conditions of corporate as stipulated in the above mentioned Listing Agreement.
governance by TVS Motor Company Limited, Chennai for the
year ended 31st March 2004, as stipulated in clause 49 of the
Listing Agreement of the said company with Stock Exchanges.

The complianc e of conditions of corporate governance is the

responsibility of the company's management. Our examination
was limited to procedures and implementation thereof, adopted
by the company for ensuring the complianc e of the conditions
of the corporate governance. It is neither an audit nor an
expression of opinion on the financial statements of the
company.

In our opinion and to the best of ourinformation and according

to the explanations given to us, we certify that the company
has c omplie d with the c onditions of c orporate governanc e

32
TVS MOTOR COMPANY
LIMITED
We state that no investor grievanc es are pending for a
period exceeding one month against the company as per
the records maintained by the Investors' Grievanc es
Committee.

We further state that such complianc e is neither an

assuranc e as to the future viability of the company nor
the efficiency or effe ctiveness with which the management
has conducted the affairs of the company.

For Sund aram & Srinivasan

Chartered Accountants

M. BALASUBRAMANIYAM
Chennai Partner
June 28, 2004 Membership No.
F7945

33
TVS MOTOR COMPANY
LIMITED

A d
u e
d r
i s
t We have audited the attached Balance Sheet of M/s. TVS
Motor
st

o
r
s
’

r
e
p
o
r
t

t
o

t
h
e

s
h
a
r
e
h
o
l
34
TVS MOTOR COMPANY
LIMITED
(iv) In our opinion, the Balanc e Sheet, Profit and Loss

Company Limited, Chennai 600 006 as at 31 March 2004, the account and the Cash Flow statement dealt with by
Profit and Loss account for the year ended on that date this report comply with the Accounting Stand ards,
annexed thereto and the Cash Flow statement for the year referred to in sub-se ction (3C) of section 211 of the
ended on that date. These financial statements are the Companies Act, 1956;
responsibility of the company’s management. Ourresponsibility
isto express an opinion on these financial statements based on (v) On the basis of written representations received from the dire
our audit. ctors, as on 31st March 2004 and taken on record by the board
of dire ctors, we report that no dire ctor is disqualifie d from
1. We conducted our audit in accordanc e with auditing standards being appointed as a dire ctor of the company in terms of clause
generally acc epted in India. These standards require that we plan (g) of sub-se ction (1) of section 274 of the Companies Act,
and perform the audit to obtain re ason a ble assura n c e a bout 1956;
whether the fin a n cial statements are free from material (vi) In our opinion and to the best of our information and according
misstatement. An audit includes examining, on a test basis, evidence to the explanations given to us, the said accounts read together
supporting the amounts and disclosuresin the financialstatements. An with the notes 1 to 24 thereon give the information required by
audit also includes assessing the accounting principles used and the Companies Act, 1956, in the manner so required and give a
significant estimates made by management, as well as e v aluating true and fair view in conformity with the accounting principles
the ov erall presentation of the fina ncial statements. We believe that generally accepted in India
our audit provides a reasonable basis for our opinion.
(a) ) in so far as it relates to the Balance Sheet, of the state of
2. Asrequired by the Companies (Auditor’s Report) Order, 2003 issued by affairs of the company as at 31st March 2004;
the Central Government in terms of sub-se ction (4A) of section 227 of
the Companies Act, 1956, we enclose in the annexure a statement on (b) in so far asit relates to the Profit and Loss account, of the
the matters specified in paragraph 4 and 5 of the said Order. profit of the company for the year ended on that date; and
3. Further to our comments in the annexure referred to above, we state (c) ) in so far as it relates to the Cash Flow statement, of the
that – cash flows for the year ended on that date.
(i) We h a v e obtaine d all the inform ation a nd explanations,
which to the best of ourknowledge and belief, were necessary
for the purpose of our audit; For Sund aram & Srinivasan
Chartered Accountants
(ii) In our opinion, proper books of account , as required by law,
have been kept by the company so far as appears from our
examination of such books;
M. BALASUBRAMANIYAM
(iii) The Balance Sheet and Profit and Loss account and Cash Flow Chennai Partner
statement referred to in this report are in agreement with the
books of account; June 28, 2004 Membership No.F7945

Annexure referred to in our report of even

date on the accounts for the year ended 31 st

March 2004.
(i) ( a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed (c) In our opinion, the company has maintained proper records of
assets. inventory. The discrepancies between the physical stocks and the
book stocks were not material and have been properly de alt with
(b) All the assets have not been physically verified by the in the books of account.
management during the ye ar but there is a regular programme of
verification atreasonable intervals, which, in our opinion, is (iii) ( a) During the year, the company has not taken any loans, secured or
reasonable having regard to the size of the company and the unse cured from companies, firms or other parties covered in the
nature of its assets. No material discrepancies were noticed on register maintained under Section 301 of the Companies Act,
such verification. 1956. During the year the company has granted inter corporate
deposits to three companieslisted in the register maintained under
(c) The assets disposed off during the year are notsubstantial and Section 301 of the Companies Act, 1956 amounting to Rs 25.13
therefore do not affect the going concern status of the company. crores. (Balance due as at the year end Rs.18.78 crores).
(ii) ( a) The inventory other than in-transit have been physically verified at (b) In our opinion, the rate of interest and other terms and conditions
reasonable intervals during the year by the management. In our of such inter corporate deposits made are not prim a facie
opinion the frequency of such verification is adequate. In respect prejudicial to the interest of the company.
of inventory with third parties which have not been physically
verified, there is a process of obtaining confirmation from such (c) ) In our opinion the payment of princip al amount and interest
parties. thereon were regular.
(b) In our opinion and according to the information and explanations (d) As on the date of Balance Sheet there was no overdue amount re
given to us, the procedures for physical verification of inventory c overa ble on the said inter c orporate deposits.
followed by the management were reasonable and adequate in
relation to the size of the company and the nature of its business.

35
TVS MOTOR COMPANY
LIMITED

Annexure to Auditors' report – ( continued)

(iv) In our opinion and acc ording to the information and explanations
given to us, there are adequate internal control Name of Nature of dues Amount Forum where dispute
the statute (Rs. in crores) is pending
procedures commensurate with the size of the company and
the nature ofits business with regard to purchase Orissa Sales Surcharge on 0.56 High Court of Judicature
ofinventory, fixed assets and for the sale of goods. During Tax Act, 1947 sales tax at Bhubaneshwar
the course of our audit, no major weakness has been
Bihar Financ e Sales Tax and 0.48 Joint commissioner
noticed in the internal control. Act 1981 Entry Tax of Commercial Taxes
(v) (a) Based on the audit proc edures applie d by us and according to the Karnataka Ele ctricity Ele ctricity tax 0.15 High Court of Judicature
information and explanations provided by the management, we (Taxation on at Bangalore
are of the opinion that the transactions that need to be entered
in the register m aintaine d in pursu a n c e of Se ction 301 of the Consumption)Act, 1959
Companies Act, 1956 have been properly entered in the said Income Tax Act, 1961 Income Tax (a) 4.71 High Court of Judicature
register.
(b) In our opinion and according to the information and at Madras
explanations given to us, the transactions entered in (b) 0.08 Income Tax Appellate
the register maintained under Section 301 and Tribunal
exceeding during the ye ar by Rupees five lakhs in (c) 0.24 Commissioner, Appe als
respe ct of e ach p arty have been ma de at pric es
which are reasonable having regard to prevailing (x) The company neither has accumulated losses as at the end of the
financial year nor has incurred cash losses during the financial year
market pric es at the relevant time. and in the immediately preceding year.
(vi) The company has not acc epted any deposits from the public. (xi) Based on our verification and according to the information and
(vii) The company has an internal audit system which, in our opinion, is explanations given by the management, the company has not defaulted
in repayment of dues to its debenture holders and bank.
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the (xii) Based on our examination and according to the information and
company pursuant to the rules made by the Central Government under explanations given to us, the company has not granted loans and
Section 209 (1)(d) of the Companies Act, 1956 for m aintena nc e of advances on the basis ofsecurity by way of pledge of shares,
c ost re c ords in resp e ct of automotive two-wheelers and are of the debentures and other securities.
opinion that, prima facie, the prescribed accounts and records have (xiii) The company is not a chit / nidhi / mutual benefit fund / society and
been made and maintained. clause (xiii) of the order is not applica ble.
(ix) ( a) According to the records provided to us, the company is regular in
depositing undisputed statutory dues including Provident fund, (xiv) The company is not dealing or trading in shares, securities, debentures
Employees’ state insurance, Investor education and protection and other investments.
fund, Income tax, Sales tax, Wealth tax, Customs duty, Excise (xv) In our opinion the terms and conditions of guarantees given by the
duty, Cess and other material statutory dues with the appropriate company forloans taken by others are not prejudicial to the interests of
authorities. the company.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income tax, Wealth tax, (xvi) During the year the company has not availed any term loan.
Sales tax, Customs duty, Excise duty and Cess were in arre ars, as
at 31st March 2004 for a period of more than six months from the (xvii) On the basis of our examination, the company has not used funds
date they became payable. raised on short term basis forlong term investment and vice-versa.
(c) ) According to the information and explanations given to us, the (xviii)During the year the company has not allotted any shares on
following are the details of the disputed dues, preferential basis to parties and companies covered in the register
that were not paid to the concerned authorities: maintained underse ction 301 of the Companies Act, 1956.

Name of Nature of dues Amount Forum where dispute (xix) During the year, the company has not issued any secured debentures.
the statute (Rs. in crores) is pending (xx) During the year the company has not raised any money by public
issue.
Central Excise Cenvat / (a) 1.08 Central Excise &
Act, 1944 Excise duties Servic e Tax Appellate (xxi) Based on the audit procedures adopted and information and
Tribunal explanations given to us by the management, no fraud on or by the
company has been noticed or reported during the course of our audit.
(b) 0.42 Commissioner,
Appe als (Excise) For Sund aram & Srinivasan
Tamil Nadu Tax on Entry Tax 2.51 High Court of Chartered Accountants
Entry of Motor Vehicles Judicature at Madras
into Local Are as Act, 1990
M. BALASUBRAMANIYAM
Chennai Partner
June 28, 2004 Membership No. F7945

36
TVS MOTOR COMPANY
LIMITED

Balan
ce Schedule As at
Rupees in crores
As at

Sheet number 31-03-2004 31-03-2003

as at
31st
Marc
h
2004

I SOURCES OF FUNDS
1 Shareholders’ funds
(a) Capital I 23.75 23.10
(b) Reserves and Surplus II 551.20 399.85
574.95 422.95
2 Loan funds
(a) Secured loans III 37.50 41.03
(b) Unsecured loans IV 81.51 80.86
119.01 121.89
3 Deferred tax liability (net of deferred tax asset) 123.05 82.82

Total 817.0 627.6

1 6
II APPLICATION OF FUNDS
1 Fixed Assets
(a) Gross block 1,132.57 806.51
(b) Less : Depreciation 302.03
437.91
( c) Net block V 694.66 504.48
(d) Capital work-in-progress VI 9.52 28.19

2 Investments VII 128.02 87.92

3 Current assets, loans and advances

( a) Inventories VIII 216.6 214.07
6
(b) Sundry debtors IX 51.90 52.21
( c) Cash and bank balances X 18.00 82.46
(d) Other current assets XI 0.19 —
(e) Loans and advances XII 149.28 100.02
Total (A) 436.03 448.76
Current liabilities and provisions
( a) Current lia bilities XIII 421.01 408.62
(b) Provisions XIV 43.11 33.07
Total (B) 464.12 441.69

24
TVS MOTOR COMPANY
LIMITED

Net current assets (A-B) (28.09) 7.07

4 Miscellaneous expenditure to the
extent not written off or adjusted XV 12.90 —

Total 817.01 627.66

5 Notes on accounts XXI

VENU SRINIVASAN H. LAKSHMANAN S.G. MURALI As per our report annexed

Chairm an & Managing Dire ctor Director Vice President – Finance For Sund aram & Srinivasan
Chartered Accountants

Chennai T.S. RAJAGOPALAN M. BALASUBRAMANIYAM

June 28, 2004 Secretary Partner

25
TVS MOTOR COMPANY
LIMITED

Profit and Loss Account for the year ended

31st March 2004
Rupees in crores

Schedule Year ended Year ended

number 31-03- 31-03-
2004 2003

Gross sales 3,260.01 3,111.28

Less : Excise duty 439.80 406.75

Net sales 2,820.21 2,704.53

Other Income XVI 36.21 20.87

Raw materials and components consumed XVII 1,855.17 1,858.68

Salaries and wages, stores consumed
and other expenses XVIII 705.62 582.54

Miscellaneous expenditure XIX — 0.30

Profit before interest, depreciation and tax 295.63 283.88

Interest (net) XX 1.21 2.83

Depreciation 79.89 79.91

Profit before tax 214.53 201.14

Provision for taxation 54.96 66.15

Provision for deferred tax 21.08 7.04

Profit for the year (after tax) 138.49 127.95

Balance profit brought forward 32.63 23.17

Transfer from Debenture redemption reserve 9.90 9.90
Investment allowanc e reserve withdrawn 3.04 —
Tax relating to earlier years — 1.40
Profit of trasferor company upto 1st April 2003 6.77 —
Profit for the year ( after tax) 138.49 127.95
Total 190.8 162.42
3
Tax relating to earlier years 0.74 —
Interim dividend paid 14.78 11.55
II Interim dividend payable 16.63 16.17
Provision for dividend tax 4.25 2.07
Transfer to general reserves 120.00 100.00
Balance surplus carried forward to Balance Sheet 34.43 32.63

Total 190.8 162.42

3
Nominal value of each share in rupees 1.00 1.00
Earnings per share in rupees (on 23,75,43,557 shares- last year shares) 5.83 5.54
23,10,00,700
Diluted earnings per share in rupees 5.83 5.54

VENU SRINIVASAN H. LAKSHMANAN S.G. MURALI As per our report annexed

26
TVS MOTOR COMPANY
LIMITED
Chairm an & Managing Dire ctor Dire ctor Vice President – Finance For Sund aram & Srinivasan
Chartered Accountants

Chennai T.S. RAJAGOPALAN M. BALASUBRAMANIYAM

June 28, 2004 Secretary Partner

27
TVS MOTOR COMPANY
LIMITED

Schedules
Rupees in crores
As at As at
31-03-2004 31-03-2003
I CAPITAL
Authorised
25,00,00,000 (Last year 2,50,00,000) Equity shares of Re. 1/-
each
(last year Rs. 10/- each) 25.00 25.00
25.00 25.00
Issued, subscribed and paid-up
(a) 23,10,00,700 (Last ye ar 2,31,00,070) Equity sh ares of Re. 1/- e ac h
(last year Rs. 10/- each) 23.10 23.10
Out of the above 23,10,00,000 (last year 2,31,00,000 equity shares of Re. 1/-
each (last year Rs. 10/- each) were allotted for consideration other than
cash.

(b) 65,42,857 Equity shares of Re.1/- each are to be allotted to the shareholders of erstwhile
transferor company on the basis of 10 equity shares of Re.1/- each in the company for every 7
equity shares of Rs.10/- each held by them in the tra nsferor c omp a ny viz. Lakshmi Auto C
omponents Ltd, Chennai for consideration other than cash i.e. the shares are to be allotted
on consideration for transfer and vesting of the assets and liabilities of the said transferor
company in terms of the scheme of amalgamation approved by the Hon'ble High Court of J
udicature at M a dras. These shares ha v e sinc e b een allotte d on
24th April 2004. 0.65 —
23.75 23.10

II RESERVES AND SURPLUS

(a) Capital reserves
(i) On shares forfeited
As per last Balance Sheet (Rs. 20,700/-) —
Add: Transfer on amalgamation (Rs. 34,500/-) —
Total (Rs. 55,200/- Last year Rs. 20,700/-) — —
(ii) On surplus arising out of amalgamation of Lakshmi Auto Components Ltd,
Chennai 6.43 —
(b) Investment allowanc e (utilised) reserve
As per last Balance Sheet 1.78
Add: Trasfer on amalgamation 1.26
3.04
Less: Withdrawn during the year 3.04 —
1.7
( c) Debenture redemption reserve
As per last Balance Sheet 19.80 8
Less : Withdrawn during the year 9.90
9.90 19.80
(d) General Reserve
As per last Balance Sheet 345.64
Add: Transfer on amalgamation 34.80
Add : Transfer from Profit and Loss Account 120.00
(e) Surplus 500.44 345.64
Balance in Profit and Loss Account 34.43 32.63
551.20 399.85

III SECURED LOANS

(a) 15.5% Secured Non-Convertible Debentures
Secured on pari passu basis by hypothecation of movable
properties except book debts and by deposit of title deeds
in respect of immovable properties 19.80 39.60
(b) From bank
Secured by a first charge on the fixed assets of a division
of the company 12.30 —
(c) ) From banks
Secured by hypothecation of present and future
inventories and receivables 5.40 1.43
37.50 41.03

IV UNSECURED LOANS
(a) From banks 0.02 14.70

28
TVS MOTOR COMPANY
LIMITED
(b) From others 72.43 57.68
(c) ) Other deposits 9.06 8.48
81.51 80.86

29
TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
V FIXED ASSETS Rupees in crores

Plant & Furniture & Other Total

machinery, fixtures, fixed As at As at
Description Land Buildings tools, dies equipments Vehicles assets 31-03-2004 31-03-2003
and jigs @
Cost of assets
As at 01-04-2003 39.83 96.64 627.07 34.22 8.75 — 806.51 672.16
Transfer on amalgamation 4.45 5.78 151.66 0.86 0.41 — 163.16 —
Additions 0.02 14.52 139.16 6.48 1.91 4.12 166.21 160.67
Sales/deletion — — 3.04 0.08 0.19 — 3.31 26.32
Total 44.30 116.94 914.85 41.48 10.88 4.12 1,132.57 806.51
Depreciation
Upto 31-03-2003 — 14.72 264.44 20.45 2.42 — 302.03 244.54
Transfer on amalgamation — 1.50 55.52 0.55 0.11 — 57.68 —
For the year — 3.77 67.08 5.25 1.73 2.06 79.89 79.91
Withdrawn on assets sold/deleted — — 1.53 0.07 0.09 — 1.69 22.42
Total — 19.99 385.51 26.18 4.17 2.06 437.91 302.03
Written down value
As at 31-03-2004 44.30 96.95 529.34 15.30 6.71 2.06 694.66
As at 31-03-2003 39.83 81.92 362.63 13.77 6.33 — 504.48
@ Vide note no. 1(s) Rupees in crores
As at As at
31-03-2004 31-03-2003

VI CAPITAL WORK-IN-PROGRESS
(a) Building under construction 2.26 1.33
(b) Machinery in transit/installation 7.26 26.86
9.52 28.19

VII INVESTMENTS (AT COST)

(a) ) Tra de - quoted
(i) 89,20,000 Equity shares of Rs. 10/- each fully paid up
in Lakshmi Auto Components Limited, Chennai-Subsidiary company — 13.92
(ii) 2,89,200 (Last year 50,000) Equity shares of Rs. 5/- each (last year Rs.10/-
each) fully paid up in Suprajit Engineering Company Limited, Bangalore 0.08 0.01
(iii) 45,880 Equity shares of Rs. 10/- each fully paid up in Ucal Fuel Systems Limited, Chennai 0.25 0.25
(iv) 1,64,52,192 (Last year 1,58,44,592) Equity shares of Rs. 10/- each fully paid up
in TVS Finance and Services Limited, Chennai 16.61 15.85
(b) Non-tra de - quoted
(i) Kotak Mahindra Asset Management Company Limited, Mumb ai 10.00 5.00
(ii) Sund aram Asset Management Company Limited, Chennai - Sund aram Money Fund 18.37 5.00
(iii) Sund aram Asset Management Company Limited, Chennai - Sund aram Bond Saver — 7.58
(iv) Sund aram Asset Management Company Limited, Chennai - Sund aram
Monthly Income Plan 10.00 —
(v) Templeton Asset Management (India) Private Limited, Mumb ai — 10.00
(vi) 8,45,553 6.75% tax free bonds of Unit Trust of India, Mumb ai 8.87 —
(vii) HSBC Asset Management India Private Limited, Mumb ai 5.00 —
(viii) Tata TD Asset Management Private Limited, Mumb ai 3.00 —
(ix) Prudential ICICI Asset Management Company Limited, Mumb ai 3.00 —
(x) Relianc e Capital Asset Management Limited, Ahmed abad 10.02 —
(xi) 800 Equity shares of Rs .10/- each fully paid up in Industrial Development Bank of
India, Mumb ai 0.01 —
Total quoted investments (A) 85.21 57.61
(Market value of quoted investments Rs. 88.18 crores- last year Rs 95.43 crores)
(c) ) Trade - unquoted
(i) 27,00,000 Equity shares of Rs.10/- each fully paid up in Sund aram Auto
Components Limited, Chennai-subsidiary company 12.50 —
(ii) 3,03,10,000 9% Non-cumulative non-convertible re-deemable preference shares

30
TVS MOTOR COMPANY
LIMITED
of Rs .10/- each fully paid up in TVS Finance and Services Limited, Chennai 30.31 30.31

31
 TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
Rupees in crores
VII INVESTMENTS (AT COST) – ( As at As at
continued)
31-03-2004 31-03-2003
(d) Non-tra de-unquoted
(i) National savings certificates (deposited with sales tax authorities Rs.37,100/-) — —
(ii) Indra Vikas Patra (Rs. 600/- last year Rs. 700/-) — —
Total unquoted investments (B) 42.81 30.31
Total Investments (A + B) 128.02 87.92
Short term investments 68.26 27.58
Long term investments 59.76 60.34
Total investments 128.02 87.92

VIII INVENTORIES
* Raw materials and components 42.90 41.71
* Work-in-proc ess 15.52 16.94
* Finished goods 101.63 107.98
* Stock of dies, moulds and tools 42.29 37.40
* Stores 14.07 6.92
Goods-in-transit 0.25 3.12
216.66 214.07
*( as certified by chairman and managing dire ctor)
IX SUNDRY DEBTORS - UNSECURED CONSIDERED GOOD
(a) Debts outstanding for a period exceeding six months 3.30 8.10
(b) Other debts 48.6 44.11
0
51.9 52.21
0
X CASH AND BANK BALANCES
(a) Cash and cheques on hand 0.15 0.09
(b) With scheduled banks
(i) in current accounts 3.28 38.52
(ii) in cash credit accounts 8.52 19.60
(iii) in term deposit accounts 6.05 24.25
18.0 82.4
0 6
XI OTHER CURRENT ASSETS
Interest accrued on non-tra de quoted investments 0.19 —
0.19 —

XII LOANS AND ADVANCES - UNSECURED

CONSIDERED GOOD
(a) ) Advances recoverable in cash or in kind or for value
to be received 117.33 83.59
(b) Inter corporate deposits 18.78 15.30
( c) Other deposits 1.72 1.10
(d) Advance payment of income tax less provisions 11.4 0.03
5
149.28 100.02
XIII CURRENT LIABILITIES
Sundry creditors 421.01 408.62
421.01 408.62
XIV PROVISIONS
(a) Provision for pension fund 21.41 13.29
(b) Provision for leave salary 2.94 1.54
( c) Interim dividend payable 16.63 16.17
(d) Provision for dividend tax 2.07
29
2.13
43.1 33.07
 TVS MOTOR COMPANY
LIMITED

Schedules — ( continued) Rupees in crores

Year ended Year ended
31-03-2004 31-03-2003

XVI OTHER INCOME

(a) Miscellaneous income 26.03 12.96
(b) Dividend from subsidiary company 3.12 —
( c) Dividend from others 6.00 0.03
(d) Profit on sale of fixed assets 0.11 0.22
(e) Profit on sale of investments 0.95 7.66
36.21 20.87
XVII RAW MATERIALS AND COMPONENTS CONSUMED
Opening stock:
Raw materials 41.71 36.76
Work-in-proc ess 16.94 17.07
Finished goods 107.98 68.03
166.63 121.86
Purchase of raw materials and components 1,848.59 1,903.4
5
Total (A) 2,015.22 2,025.31
Closing stock:
Raw materials 42.90 41.71
Work-in-proc ess 15.52 16.94
Finished goods 101.63 107.98
Total (B) 160.05 166.63
(A - B) 1,855.17 1,858.68
XVIII SALARIES AND WAGES, STORES CONSUMED AND OTHER EXPENSES
* ( a) Salaries, wages and allowanc es
(includes commission to managing dire ctor Rs. 1.07 crores
(last year Rs. 2.29 crores) vide computation annexed) 99.28 75.76
* (b) Workmen and staff welfare expenses 16.31 14.08
* ( c) Contribution to provident and other funds 18.16 14.12
* (d) Stores and tools consumed 37.52 22.82
* (e) Power and fuel 29.34 20.85
* (f) Rent 5.87 5.24
(g) Rates and taxes 29.96 29.02
* (h) Repairs and maintenance:
(i) buildings 4.84 3.55
(ii) machinery 24.42 16.47
(iii) other assets 2.47 1.59
(i) Insurance 2.66 2.25
(j) Directors’ sitting fees 0.03 0.02
(k) Commission to independent dire ctors 0.22 0.09
(l) Audit fees 0.23 0.12
* (m)Travel and conveyance 15.81 11.52
* (n) Packing and freight charges 70.86 66.27
* (o) Advertisement and publicity 105.55 105.94
* (p) Other marketing expenses 151.78 95.70
* (q) Other expenses 81.37 80.78
(r) Royalty — 2.88
(s) Commission to selling agents 0.72 0.39
(t) Cash discount 7.90 10.46
(u) Loss on sale / scrapping of fixed assets 0.32 2.62

705.6 582.54
* net of recoveries 2

29
 TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
Rupees in crores
Year ended Year ended
31-03-2004 31-03-2003
XIX MISCELLANEOUS EXPENDITURE WRITTEN OFF

Debenture issue expenses — 0.30

— 0.30

XX INTEREST
( a) On debentures 3.79 6.86
(b) On fixed loans 1.45 0.94
( c) Others 5.06 3.44
Total (A) 10.30 11.24
Less: Interest income
(a) On non-tra de investments (gross) 0.36 —
(b) On advances and deposits (gross) 8.73 8.41
Total (B) 9.09 8.41
(A-B) 1.21 2.83

Rupees in crores
As at/ As at/
Year ended Year ended
31-03-2004 31-03-2003
XXI NOTES ON ACCOUNTS
1. Accounting Stand ards
(a) AS – 1 Disclosure of accounting policies
The accounts are maintained on accrual basis as a going concern.
(b) AS – 2 Valuation of inventories
Inventories are valued in accordance with the method of valuation prescribed by
The Institute of Chartered Accountants of India at weighted average rates.
(c) AS – 3 Cash flow statements
The cash flow statement is prepared under "Indire ct method" and the same is
annexed.
(d) AS – 5 Net profit orloss for the period, prior period items and changesin accounting policies
Details of prior period debits to Profit and Loss account:
(i) Raw materials and components consumed 0.19 0.40
(ii) Technical consultancy 0.78 —
(iii) Other expenses — 0.08
(e) AS – 6 Depreciation accounting
Depre ciation has been provided under the straight line method at the rates
prescribed under schedule XIV of the Companies Act, 1956 with the applica ble
shift allowanc e.
In respect of assets added / assets sold during the year pro-rata depreciation
has been provided at the rates prescribed under schedule XIV.
Depreciation in respect of Computers and Vehicles has been provided at 30% and
18% respectively which is higher than the rate prescribed under schedule XIV.
Depreciation in respect of tools and dies has been provided based on the
quantity of components manufactured. In last year in respect of tools and dies
meant for the manufacture of two-wheelers which were discontinued,
depreciation has been provided at 99% of the original cost and the additional
depreciation provided on these tools and dies amounted to Rs. 17.90 crores.
Depreciation in respect of assets acquired during the year whose actual cost
does not exceed Rs. 5000/- has been provided at 100%.
(f) AS – 9 Revenue recognition
The income of the company is derived from sale of automotive vehicles and
parts thereof, net of trade discount and include realised exchange fluctuations on
exports. Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applica ble.

30
TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
XXI NOTES ON ACCOUNTS – ( continued)

Rupees in crores
As at/ As at/
Year ended Year ended 31-
03-2004 31-03-2003
Dividend from investmentsin sharesisrecognised when the company in which
they are held declaresthe dividend and when the right to receive the same is
established. The revenue and expenditure are accounted on a going concern
basis.
(g) AS – 10 Accounting for fixed assets
All the fixed assets are valued at cost including expenditure incurred in bringing
them to usable condition less depreciation.
Land includes land acquired under 20 years lease from Karnataka Industrial Area
Development Board (KIADB) at a cost of Rs. 3.86 crores.
Buildings include building constructed on leasehold land 1.33 —
Cost of vehicles include vehicles acquired under finance lease 0.62 0.62
(h) AS – 11 Accounting for effe cts in foreign exchange rates
Purchase of imported raw materials, components, spare parts and capital goods
are accounted based on retirement memos from banks. In respect of lia bilities on
import of raw materials, components, spare parts and capital goods which are in
transit and where invoices / bills are not received, the lia bility is accounted based
on the market exchange rates prevailing on the date of the balance sheet.
Sales include realised exchange fluctuation on exports.
Net exchange differenc e credited to
(i) Profit and Loss Account 1.27 0.63
(ii) Carrying amount of fixed assets 0.24 —
(i) AS – 13 Accounting for investments
Investments are valued at cost. Provision for dimunition in the carrying cost of long
term investments is made if such dimunition is other than temporary in nature in the
opinion of the management.
(i) Investments made / transfer in on amalgamation during the year:
DSP Merrill Lynch Investment Managers Ltd, Mumb ai 25.00 5.00
Deutsche Asset Management India Private Limited, Mumb ai 45.00 —
Birla Sunlife Asset Management Company Limited, Mumb ai 6.00 —
Stand ard Chartered Mutual Fund of Stand ard Chartered Bank, Mumb ai 236.50 19.00
JM Mutual Capital Management Private Limited, Mumb ai 20.00 —
Relianc e Capital Asset Management Limited, Ahmed abad 20.00 —
SBI Mutual Fund of State Bank of India, Mumb ai 10.00 120.00
IL&FS Asset Management Company Limited, Mumb ai 83.00 5.00
Sund aram Asset Management Company Limited, Chennai 194.31 650.00
Tata TD Asset Management Private Limited, Mumb ai 3.00 —
Prudential ICICI Asset Management
Company Limited, Mumb ai 380.50 5.00
Kotak Mahindra Asset Management
Company Limited, Mumb ai 58.00 30.00
Templeton Asset Management (India) Private Limited, Mumb ai 69.50 20.00
HSBC Asset Management (India) Private Limited, Mumb ai 55.00 —
HDFC Asset Management Company Limited, Mumb ai 48.00 10.00
Sund aram Auto Components Limited, Chennai 12.50 —
Suprajit Engineering Company Limited, Bangalore (Transfer on amalgamation) 0.07 —
TVS Finance and Services Limited, Chennai 0.76 46.16
(Investments in 2003-04 is owing to transfer on amalgamation)
6.75% Tax free bonds in Unit Trust of India, Mumb ai 8.87 —
Industrial Development Bank of India, Mumb ai (Transfer on amalgamation) 0.01 —
Total 1,276.0 910.16
31
TVS MOTOR COMPANY
LIMITED
2

32
TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
XXI NOTES ON ACCOUNTS – ( continued)

Rupees in crores
As at/ As at/
Year ended Year ended 31-
03-2004 31-03-2003
(ii) Investments realised / cancelled on amalgamation during the year:
DSP Merrill Lynch Investment Managers Limited, Mumb ai 25.00 5.00
Deutsche Asset Management India Private Limited, Mumb ai 45.00 —
Birla Sunlife Asset Management Company Limited, Mumb ai 6.00 —
Stand ard Chartered Mutual Fund of Stand ard
Chartered Bank, Mumb ai 236.50 19.00
JM Mutual Capital Management Private Limited, Mumb ai 20.00 —
Relianc e Capital Asset Management Limited, Ahmed abad 9.98 —
SBI Mutual Fund of State Bank of India, Mumb ai 10.00 120.00
IL&FS Asset Management Company Limited, Mumb ai 83.00 5.00
Sund aram Asset Management Company Limited, Chennai 178.52 637.42
Prudential ICICI Asset Management
Company Limited, Mumb ai 377.50 5.00
Kotak Mahindra Asset Management
Company Limited, Mumb ai 53.00 25.00
Templeton Asset Management (India) Private Limited, Mumb ai 79.50 10.00
HSBC Asset Management (India) Private Limited, Mumb ai 50.00 —
HDFC Asset Management Company, Mumb ai 48.00 10.00
Lakshmi Auto Components Limited, Chennai (Shares cancelled on amalgamation) 13.92 —
Patheja Forging and Auto Parts Manufacturing Limited, Pune —
0.21
Total 1,235.92 836.63
The amounts of Rs.1,276.02 crores (last year Rs.910.16 crores) and
Rs.1,235.92 crores (last year Rs.836.63 crores) are cumulative
figures.
Cost of investments held as at balance sheet date 128.02 87.92
Cost of investments which are not transferable till 8th August 2005 13.50 13.50
(j) AS - 14 Accounting for amalgamation
With effe ct from 2nd April 2003, the business of Lakshmi Auto Components
Limited, Chennai was transferred to and vested in the company. Accounting for
such amalgamation is done by "pooling of interests" method as prescrib ed in
the Accounting Stand ard as the separate businesses of the amalgamating
companies are continued by the transferee company. Under this method, the
assets, lia bilities and reserves of the transferor company are recorded at their
existing carrying amounts as on 2nd April 2003.
The gain arising out of the net result of the amalgamation amounting to
Rs.6.43 crores is credited to capital reserves.
(k) AS-15 Accounting for retirement benefits
(i) Contributions to provident fund are made to a recognised trust.
(ii) Provision for leave salary to employees is made on the basis of actuarial valuation.
(iii) Provision for pension for senior managers is made on actuarial valuation basis for current
and past services.
(iv) Contributions to gratuity and superannuation fund are made to Life Insurance Corporation of
India in accordance with the scheme framed by the corporation.
(l) AS – 16 Borrowing cost
The borrowing costs have been treated in accordance with Accounting Stand ard
on Borrowing Cost (AS – 16) issued by The Institute of Chartered Accountants of
India. During the year, there were no borrowings attributa ble to qualifying assets
and hence no borrowing costs were capitalised.
(m) AS – 17 Segment reporting
The company operates in only one segment viz., automotive vehicles. Hence the
Accounting Stand ard on Segment reporting (AS – 17) is not applica ble.
(n) AS – 18 Related party disclosure
Disclosure is made as per the requirements of the standard and the same is annexed.

33
TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
XXI NOTES ON ACCOUNTS – ( continued) Rupees in crores
As at/ As at/
Year ended Year ended
31-03-2004 31-03-2003
(o) AS – 19 Leases
(i) Asset acquired under finance lease - vehicles- original cost 0.62 0.62
(ii) The net carrying amount as on 31st March 0.28 0.40
(iii) Minimum lease payments
– not later than one year-not discounted 0.18 0.18
– later than one year but not later than five years - not discounted 0.35 0.53
– later than five years- not discounted — —
(iv) Present value of minimum lease payments
– not later than one year- discounted 0.10 0.11
– later than one year but not later than five years - discounted 0.09 0.19
– later than five years - discounted — —
(v) Contingent rents recognised as income in the statement of Profit and Loss Account — —
(vi) The total of future minimum sub-le ase payment expected to be received
under non-canc ella ble sub-le ases as on 31st March — —
(vii) General description of the leasing arrangements
– Nature of facility : Finance lease
– Restriction imposed by lease arrangement -Nil-
(p) AS – 20 Earnings per share
During the ye ar the company sub-divided the fac e value of the shares from
Rs. 10/- each to Re. 1/- each. Pursuant to the requirements of the Accounting
Stand ard, the earnings per share for the last year is also worked out on the
basis of the sub-division.
(q) AS – 21 Consolid ated financial statements
Consolid ated financial statements of the company and its
subsidiary are enclosed.
(r) AS – 22 Accounting for taxes on income
Current taxis determined asthe amount of tax payable in respect of taxable
income for the period. Deferred tax lia bility and asset are recognised based on
timing differenc e.
(i) Deferred tax lia bility consists of :
– tax on depreciation 93.38 63.35
– tax on R & D capital expenditure 22.11 15.31
– tax on amortisation of dies and moulds 13.32 9.38
– tax on expenses admissible on payment basis under 4.72 0.68
Income-tax Act, 1961
(A) 133.53 88.72

(ii) Deferred tax asset consists of :

– tax on provision in respect of expenditure which will be allowed under
the Income-tax Act, 1961 only on payment basis 10.48 5.90
(B) 10.48 5.90
Deferred tax lia bility (net of deferred tax asset) (A)-(B) refer Balance Sheet 123.05 82.82
(s) AS - 26 - Accounting for intangible assets
During the ye ar the company acquired the following assets falling under the
definition of intangible assets as per the Accounting Stand ard and the following
disclosure is made in respect of those assets:
(i) Softw are
– Useful life of the asset 2 years —
– Amortisation rates used 50% each year —
as depreciation
– Gross carrying amounts at the beginning and at the end
of the period together with additions and deletions during the year
– Opening balance — —
– Additions during the year 4.12 —
Total 4.12 —
Amortised during the year as depreciation 2.06 —
Closing balance 2.06 —

34
 TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
XXI NOTES ON ACCOUNTS – ( continued) Rupees in crores
As at/ As at/
Year ended Year ended
31-03-2004 31-03-2003
(ii) Expenditure pending allocation on new products
– Useful life of the asset 10 years —
– Amortisation rates used Not amortised
as asset —
not put to use
– Gross carrying amounts at the beginning and at the end of the period
together with additions and deletions during the year
– Opening balance — —
– Additions during the year 2.19 —
Total 2.19 —
Amortised / capitalised during the year — —
Closing balance 2.19 —
Commitments for the acquisition of the asset 1.05 —
2. Previous year’sfigures are not comparable with those of the current year asthe company has acquired
M/s. Lakshmi Auto Components Limited, Chennai with effe ct from 2nd April 2003. The carrying
amounts of the assets and lia bilities of M/s. Lakshmi Auto Components Limited, Chennai were
accounted by the company pursuant to the order of the Hon’ble High Court of Judicature at Madras.
3. Share capital
M/s. Sund aram-Clayton Limited, Chennai holds 2,10,00,000 equity shares of Re. 1/-
each (last year 21,00,000 equity shares of Rs.10/- each) while its wholly owned
subsidiary M/s Anusha Investments Limited, Chennai holds 11,40,00,000 equity shares
of Re. 1/- each (last year 1,14,00,000 equity shares of Rs. 10/- each). This aggregates
to 56.8% (last year 58.5%) of the share capital of the company.
4. Debentures
The 1,00,00,000 15.5% secured redeemable non-convertible debentures issued
during the year 1997-98 for Rs. 100 crores are redeemable at par in equal
instalments at the end of 4th, 5th,6th and 7th year.
Amount of debentures redeemed 19.80 19.80
5. Amount of loan payable within one year:
(a) Secured - from banks 4.00 —
(b) Unsecured - from banks 0.02 14.70
6. Land
Title deed in respect of lands acquired near Ahmed abad at a cost of Rs. 0.01 crore is
yet to be received from the registration authorities.
7. Bank balance includes amount in respect of
(a) Unclaimed dividends 0.81 0.61
(b) Unclaimed share application money (Rs. 17,200/-) — —
8. Loans and advances include:
(a) Due from an offic er of the company 0.05 0.06
(b) Maximum amount due from an officer of the company at any time during the year 0.06 0.06
9. Deposits include:
(a) Deposit with post offic e (Rs. 21,500/-) — —
(b) Deposit with central excise 0.13 0.14
( c) Deposit with sales tax 0.78 0.72
10 Sundry creditors include :
. (a) Investor Education and Protection fund
Unclaimed dividend 0.81 0.61
Unclaimed share application money ( Rs.17,200/-) — —
(b) Amount due to Small Scale Industrial units 18.44 16.73
(c) ) Amount due to other industrial units 267.25 241.80
Amount payable to Small Scale Industrial units - due more than 30 days (the company’s payment terms is
45 days) Aar Pee Industries; Accurate Engineering Company; Acma Tools; Addon Engineering Private
Limited; Amman Power Printing Press; Anu Industries Limited; Ase c Solutions; Ashok Industries, Auto Shell
Moulders Limited; Bhuvaneshwari Ele ctricals; BismiTools & Servic e; Burgmann India Private Limited;
Classic Welding Products Limited; CNC India; Concept Engineering; Concept Engineers; Deeyem CNC
Machining Private Limited; Diete ch India; Dimo Castings Private Limited; Duracon Automation; Ele
ctrolink Products Private Limited; Ele ctropneumatics & Hydraulics (India) Limited; Eleme c Industries; Elhe
at Engineering Private Limited; Elme ch Engineers; Essa e Digitronics Private Limited; Essa e Exc el Private
Limited; Federn Fabrik; Fiem Auto Private Limited; Fine arc Systems Private Limited; G.I. Auto Private
Limited; G ee Vee Fab; G em Pre cision Tool Private Limited; Gorgy Industries; Gramos Chemicals India
Private Limited; Haresh Machine Tools Company; Hindustan Moulds & Dies; Hitech Rolling Balls Private
Limited; Hosur Metal Finishers;

35
 TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
XXI NOTES ON ACCOUNTS – ( continued) Rupees in crores
As at/ As at/
Year ended Year ended

Hydromech Enterprises; IEC Air Tools Private Limited; Industrial Hygienic Systems; Integrated Engineering & Exports 31-03-2004 31-03-2003
(Private ) Limited; Inteltek Automation Private Limited; J.S. Inc; J.S. Super Pack; J ason Tools; J aycee Industries; Jitesh
Enterprises; K.K. Fasteners; Kark Design Tech; Klipco Private Limited; Kohinoor Printers Private Limited; Kumaran
Printers and Binders; Kurkute Brothers Private Limited; Lakhotia Beltings Private Limited; M.D. Fab; M.N. Rama Rao &
Co.; Madras Cupprum Metals Private Limited; Magod Laser Machining Private Limited; Mahem Engineering Private
Limited; Mars Print Pack Private Limited; Marvel GlovesIndustries; Me chatronics; Me ch-Enn; Mehta Engineers Limited;
Meru Pre cision Industries; Mhitraa Engineering Equipment Private Limited; Micro Toolings Systems; Microtex Tool
Room Private Limited; Mipalloy; Morey Metal Finishers; Multitech; Metal Impregnations; N R Industries; Nu-Tech Rubber
Products; Orbital Systems (Bombay) Private Limited; PKN Caps & Polymers Private Limited; Plant Engineering Services;
Polyrub Extrusions India; PowerTech; Pollution Control Private Limited; Precision Compaid Mouldings Private Limited;
Precitec; Premier Plastics; Premier Sealing Products; PressFab; Precision Components; Presscom Products; R.M.
Industries; Raha Associates; Ramesh & Co; Ramsays Corporation; Ratnalekshmi Precision Tools Private Limited; Sakthi
Engineering; Sankar Sealing Systems Limited; Sansera Engineering Private Limited; Schevaran Laboratories Private
Limited; Servewel Industries; Shalibhadra Intermediates Private Limited; Shet-Dass Engineers Private Limited; Shivkson
Engineering; Spark Tools; Spe ar Pre cision Engineers; Sri Ganesh Industries; Sri Parvathi Enterprises; Srivari Metal Works
Private Limited; SRV Automations; Stand Parts; Standard Insulations; Suma Springs Private Limited; Sun Engineering
Works; Superheat Furnaces Private Limited; Switch International Limited; Synchron Machine Tools Private Limited;
Syscon Instruments Private Limited; Taurus Private Limited; Techno Controls; Thayyil Enterprises; Tool Mac; Ucal Auto
Private Limited; Ultraseal India (Private) Limited; Uma Engineering Works; V.K Printing and Packaging; V.V. Printers;
Velkalyan Products; Vikman Steel Ball Industries; Vir Rubber Products Private Limited; Visvanatham & Company; Wellwin
Industry Limited; Yess Dee

Enterprises;
(a) Zawar
Expenditure Guagesallocation
pending & Tools Private Limited.
represents expenditure on designs
11 Miscellaneous expenditure not written off:
(b) In respect of new product launch expenses Accounting Stand ard
and development of proto types on new product.
a resource. This expenditure is proposed to be written off in 36 months.
26 is not applica ble as it does not create any intangible asset or

12 Contingent lia bility not provided for:

(c)
(a) On
Onguarantee
counter to
guarantee given to banks
Housing Development Finance Corporation Limited, Mumb ai on 2.73 1.69
(b) On letters of credit 29.12 21.71

loans granted to employees of the company 1.25 1.25

(d) On bills discounted 20.19 4.61
(e) Capital commitments not provided for 20.43 23.47
(f) On oblig ation arising out of agreements facilitating credit to an associate company 75.00 75.00
13 Lia bility contested and not provided for:
(a) Excise 1.50 0.19
(b) Sales tax 3.55 3.16
(c) ) Electricity tax 0.15 —
(d) Income-tax 5.03 5.52
(e) Employee settlement claims 0.05 0.05
14 Tax deducted at source:
(a) On interest income 1.15 1.18
(b) On sub-contract income 2.65 —
15 Contribution to provident and other funds include:
(a) Contribution towards gratuity as per scheme framed by Life Insurance Corporation of India 3.25 2.86
(b) Contribution towards pension fund 7.72 5.81
16 Repairs include:
(a) Wages 3.29 2.65
(b) Stores consumed 17.65 13.05
17 Audit fees comprise:
(a) As auditors 0.15 0.08
(b) Taxation matters 0.03 0.02
(c) Certification matters 0.04 0.01
(d) Cost audit fees 0.01 0.01
Total
(a) Expenses in excess of 1% of total revenue 0.23 0.12
18 General
i) Carria ge outwards included in packing and freight charges 55.76 53.62
ii) Sales promotion expenses included in other marketing expenses 76.76 41.10
(b) Other expenses include travel and stay expenses of auditors 0.07 0.06
(c) Loss year’s
current on sale of investments netted against profit on sale of investments
classification. 5.64 0.66
19 Previous year’s figures have been regrouped wherever necessary to conform to the

36
TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
XXI NOTES ON ACCOUNTS – ( continued) Rupees in crores

20 Disclosure made in terms of clause 32 of the listing agreement with stock exchanges

Particulars Name of the company Amount Amount

outstanding outstanding
as on as on
31-03- 31-03-
2004 2003
(a) Loans and advances
(i) Loans and advances in Sund aram Auto Components
the nature of loans made Limited, Chennai(Last year Lakhsmi Auto 8.47 10.30
to subsidiary company Components Limited, Chennai)
Maximum amount due at any time
during the year 9.09 12.00
(ii) Loans and advances in TVS Finance and Services
the nature of loans made Limited, Chennai — —
to associate company Maximum amount due at any time
during the year 5.50 42.65
(iii) Loans and advances in
the nature of loans
made Nil — —
to firms/comp anies in which Maximum amount due at any time
dire ctors of the company are during the year — —
interested
(b)
(i) Investments by the company Sund aram Auto 12.50 —
In subsidiary companies Components Limited,
Chennai
(27,00,000 Equity shares of Rs 10/- each
fully paid up)
Lakshmi Auto Components — 13.92
Limited, Chennai (89,20,000 Equity
shares of Rs 10/- each fully paid
up) 12.50 13.92
(ii) Maximum amount held at any
In associate company time during the year 46.76 46.16
TVS Finance and Services Limited
Chennai
(1,64,52,192 (Last year 1,58,44,592)
Equity shares of Rs.10/-
each fully paid up and
3,03,10,000
9% non-cumulative non- 46.76 46.16
convertible redeemable preference
shares of Rs 10/- each fully paid
(c) up)
Investments by the
holding company Maximum amount held at any 13.50 13.50
time during the year
Sund aram-Clayton Limited,Chennai
together with its subsidiary Anusha
Investments Limited, Chennai
(13,50,00,000 Equity shares of Re.1/-
13.50 13.50
each fully paid - last year 1,35,00,000
Equity shares of Rs. 10/- each fully paid)
Maximum amount held at any
time during the year

Notes:

(a) The above loans are subject to repayment schedule as agreed between the company and its loanee. The loans are repayable within seven
years.
(b) All the above loans carry interest at agreed rates which are not less than interest stipulated in section 372A of the Compan ies Act, 1956.
(c) Investment by the loanee in the shares of the parent company and subsidiary company when the company has made a loan or advance in the
nature of loan - Nil
37
TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
XXI NOTES ON ACCOUNTS – ( continued) Rupees in crores

21 Determination of net profit as per sections 349 and 350 of the Companies Act, 1956 As at/ As at/
Year ended Year ended
31-03-2004 31-03-2003

Profit as per Profit and Loss Account 215.60 203.43

Add: Depreciation as per Profit and Loss Account 79.89 79.91

295.49 283.34

Less : Depreciation as per section 350 read with schedule XIV 82.20 54.11

Profit as per section 349 213.29 229.23

(a) ) Commission payable to managing dire ctor at 2% thereof as approved by

the shareholders 4.27 4.58
Actual commission provided at 0.5% (last year 1%) 1.07 2.2
9

(b) Commission to independent dire ctors at 1% of the profit as stated above

subject to a ceiling of Rs. 3.60 lakhs (last year Rs. 2 lakhs) per dire ctor per 0.22 0.09
annum

22 Related party disclosure

List of related parties
Reporting entity TVS Motor Company Limited, Chennai

Subsidiary company Sund aram Auto Components Limited, Chennai

(Last year Lakshmi Auto Components Limited, Chennai)

Holding company Sund aram-Clayton Limited, Chennai

Fellow (a) Anusha Investments Limited, Chennai

subsidiaries (b) TVS Electronics Limited, Chennai

(c) Harita Stocks Limited, Chennai

(d) TVS Investments Limited, Chennai

Associate company TVS Finance and Services Limited, Chennai

( a subsidiary of TVS Investments Limited, Chennai)

Key management personnel Mr. Venu Srinivasan

Relative of key management Mr. Gopal Srinivasan

personnel

38
 TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
XX NOTES ON ACCOUNTS – ( continued) Rupees in crores
As at/ As at/
Year ended Year ended
31-03-2004 31-03-2003
23 Particulars of transactions with related parties

(a) Purchase of goods

– holding company 35.06 29.24
– subsidiary company (TVS Electronics Limited, Chennai) 45.22 42.38
– fellow subsidiary 0.47 —

(b) Purchase of fixed assets

– subsidiary company — 25.70
– fellow subsidiary (TVS Electronics Limited, Chennai) 0.33 —

( c) Sale of fixed assets

– holding company 0.18 0.07
– subsidiary company — 0.03

(d) Rendering of services (including interest and sub-contract charges received)

– subsidiary company 0.47 3.42
– fellow subsidiary (Anusha Investments Limited, Chennai) 0.18 0.18
– associate company 0.11 0.86

(e) Receiving of services (including sub-contract charges paid)

– holding company 42.39 38.78
– subsidiary company 0.32 131.99
– fellow subsidiaries 2.49 1.65
– associate company 11.58 0.79

(f) Trade advances made during the year

– subsidiary company 6.63 15.60
– fellow subsidiary (Anusha Investments Limited, Chennai) 5.00 5.00
– associate company 13.50 —

(g) Trade advances received back during the year

– subsidiary company 1.47 5.30
– fellow subsidiary (Anusha Investments Limited, Chennai) 10.00 —
– associate company 13.50 —

(h) Amount outstanding as at Balance Sheet date:

(i) Sundry debtors

– subsidiary company — 1.17

– fellow subsidiaries — 0.06

(ii) Loans and advances receivable

– subsidiary company 8.47 15.04
– fellow subsidiary 0.06 5.00
(iii) Sundry creditors
– holding company 12.33 12.58
– subsidiary company 2.83 0.54
– fellow subsidiary 0.01 —
– associate company 0.77 0.29

39
TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
XXI NOTES ON ACCOUNTS – ( continued) Rupees in crores
As at/ As at/
Year ended Year ended
31-03-2004 31-03-2003
23 Particulars of transactions with related parties — ( continued)
(I) Investments made during the year
– subsidiary company ( consideration other than cash) 12.50 —
– associate company — 46.16

(j) Investments sold / cancelled during the year

– subsidiary company 13.92 —
– fellow subsidiaries — 0.05

(k) Oblig ation arising out of agreements facilitating credit to associate company
TVS Finance and Services Limited, Chennai 75.00 75.00
(l) Remuneration to key management personnel and his relative 1.07 2.30

VENU SRINIVASAN H. LAKSHMANAN S.G. MURALI As per our report annexed

Chairm an & Managing Dire ctor Dire ctor Vice President - Finance For Sund aram & Srinivasan
Chartered Accountants

Chennai T.S. RAJAGOPALAN M. BALASUBRAMANIYAM

June 28, 2004 Secretary Partner

40
TVS MOTOR COMPANY
LIMITED

Schedules – ( continued)
XX NOTES ON ACCOUNTS – ( continued)
24 INFORMATION PURSUANT TO THE PROVISIONS OF PART II OF SCHEDULE VI OF THE
COMPANIES ACT, 1956 (VIDE NOTIFICATION DATED 30TH OCTOBER 1973 OF THE
DEPARTMENT OF COMPANY AFFAIRS, GOVERNMENT OF INDIA)
Rupees in crores
Year ended Year ended
31-03-2004 31-03-2003
Quantity Value Quantity Value
I RAW MATERIALS
CONSUMED
1 (a) Basic raw materials
Steel sheets, coils, strips and bars Kgs. 69,65,198 25.67 70,22,155 24.84
Steel tubes Mtrs. 3,42,829 3.72 3,74,794 2.59
Aluminium alloys and ingots Kgs. 72,56,770 57.56 67,90,394 53.21
(b) Intermediates and components
(which individually do not account for more
than 10% of the total value of consumption) 1,760.45 1,817.86
1,847.40 1,898.50
2 Consumption of raw materials and components
% of total % of total
consumption consumption
(a) Imported 3.5 64.20 4.8 91.05
(b) Indigenous 96.5 1,783.20 95.2 1,807.45
100.0 1,847.40 100.0 1,898.50
II CONSUMPTION OF MACHINERY SPARES
(a) Imported 23.9 1.35 28.7 0.98
(b) Indigenous 76.1 4.31 71.3 2.44
100.0 5.66 100.0 3.42
III IMPORTS (CIF VALUE)
(a) Raw materials 6.88 6.89
(b) Spare parts and components 25.81 51.47
(c) Capital goods 51.25 71.32
IV OTHER EXPENDITURE IN FOREIGN CURRENCY
(a) Travel 2.71 2.51
(b) Royalty — 2.88
(c) ) Subscription to books and periodicals 0.07 0.08
(d) Subscription to associations 0.05 0.04
(e) Welfare expenses- training 0.99 0.70
(f) Consultancy 12.58 8.77
(g) Advertisement and publicity 2.96 1.30
(h) Commission on exports 0.72 0.39
(i) Research and development 8.43 5.10
(j) Softw are expenses — 0.11
(k) Commission on import of raw materials and components 0.30 0.36
V PAYMENTTO NON-RESIDENTS
(a) No.of non-resident shareholders Nil Nil
(b) No.of shares held Nil Nil
(c) Net dividend Nil Nil

VI EARNINGS IN FOREIGN EXCHANGE

(a) Exports (on f.o.b. basis) 68.24 24.43
(b) Others (freight and insurance) 1.24 0.54

69.48 24.97
VII SALE BY CLASS OF GOODS
Quantity Quantity
nos. nos.
(a) Mopeds 2,51,065 327.88 2,48,190 318.72
(b) Motorcycles 7,06,558 1,940.05 7,18,447 1,952.94
(c) Scooters 1,89,238 386.19 1,52,472 292.58
(d) Spares and accessories 166.09 140.29
Total 2,820.21 2,704.53
41
TVS MOTOR COMPANY
LIMITED
VIII LICENSED AND INSTALLED CAPACITY (PER ANNUM) Not applica ble Not applica ble

42
 T
V
S
M
TVS MOTOR COMPANY LIMITED O
T
O
R
Schedules – ( continued) C
O
XXI NOTES ON ACCOUNTS – ( continued)
M
IX OPENING AND CLOSING STOCK OF GOODS PRODUCED DURING THE YEAR

Rupees in crores P
AN
Y
Opening stock Production meant for sale Closing stock L
I
M
Quantity nos. IT
Qty. Value Qty. Value Qty. Value Qty. Value
E
nos. nos. nos. nos. D
As at As at Year ended Year ended As at As at
01-04-2003 01-04-2002 31-03-2004 31-03-2003 31-03-2004 31-03-2003

(a) Mopeds 3,199 3.89 8,093 8.53 2,51,417 2,43,306 3,497 3.92 3,199 3.89
(b) Motorcycles 34,352 81.86 12,974 33.74 7,03,724 7,40,030 30,909 75.98 34,352 81.86
( c) Scooters 7,877 13.95 9,263 16.01 1,88,196 1,51,201 6,589 11.71 7,877 13.95
(d) Components which
do not individually
account for 10% or
more of the total
value of stock 8.28 9.75 10.02 8.28

Total 107.98 68.03 101.63 107.9

8

Note: During the year 54 mopeds, 609 motorcycles and 246 scooters (last year 10 mopeds, 205 motorcycles and 115 scooters) were captively used.

VENU SRINIVASAN H. LAKSHMANAN S.G. MURALI As per our report annexed

Chairm an & Managing Dire ctor Dire ctor Vice President - Finance For Sund aram & Srinivasan
Chartered Accountants

Chennai T. S. RAJAGOPALAN M. BALASUBRAMANIYAM

June 28, 2004 Secretary Partner
41
Statement pursuant to section 212 of the Companies Act, 1956 relating to
subsidiary
1 Name of the subsidiary : Sund aram Auto Components Limited, Chennai

2 Financial year of the subsidiary : 1st April 2003 to 31st March 2004

3 Shares of the subsidiary held by the

company on the above date
(a) ) Number and face value : 27,00,000 Equity shares of Rs. 10/- each fully paid

(b) Extent of holding : 100%

4 Net aggregate amount of profits/losses of the

subsidiary for the above financial year of the
subsidiary not dealt with in the company’s
accounts
(a) ) for the financial year of the subsidiary
— Profit : Rs. 3.60 crores
(b) for the previous financial years since
it became a subsidiary : —
5 Net aggregate amount of profits/losses of the
subsidiary for the above financial year of the
subsidiary dealt with in the company's accounts
(a) ) for the financial year of the subsidiary : —
(b) for the previous financial years since
it became a subsidiary : —

VENU SRINIVASAN H. LAKSHMANAN S.G. MURALI

Chairm an & Managing Dire ctor Dire ctor Vice President – Finance

Chennai T.S. RAJAGOPALAN

June 28, 2004 Secretary

42
 TVS MOTOR COMPANY LIMITED

Cash Flow Statement

Rupees in crores
Year ended Year ended
A. Cash flow from operating activities : 31-03-2004 31-03-2003
Net Profit before tax and extraordinary items 214.53 201.14
Add :
Depreciation for the year 79.89 79.91
Depreciation – transfer on amalgamation 57.68 —
Depreciation on sale/scrapping of assets (1.69) (22.42)
Miscellaneous expenditure written off — 0.30
Income tax relating to earlier years (0.74) 1.40
Dividend income (9.12) (0.03)
Interest income (9.09) (8.41)
Interest expenditure 10.30 11.24
127.23 61.99
Operating profit before working capital changes 341.76 263.13
Adjustments for :
Trade receivables 0.31 34.31
Inventories (2.59) (65.28)
Other current assets (0.19) —
Loans and advances (37.84) (2.22)
Trade payables 12.39 117.21
Provisions 9.52 5.84
(18.40) 89.86
Cash generated from operations 323.36 352.99
Dire ct taxes paid (66.38) (61.02)
Net cash from operating activities (A) 256.98 291.97
B. Cash flow from investing activities :
Purchase of fixed assets (166.21) (160.67)
Transfer on amalgamation (163.16) —
Sale of fixed assets 3.31 26.32
Capital work-in-progress 18.67 (16.50)
Purchase of investments (1,276.02) (910.16)
Sale of investments 1,235.92 836.63
Miscellaneous expenditure not written off (12.90) —
Interest received 9.09 8.41
Dividends received 9.12 0.03
(342.18) (215.94)
Net cash used in investing activities (B) (342.18) (215.94)
C. Cash flow from financing activities :
Transfer on amalgamation:
General reserves 34.80 —
Capital reserve 6.43 —
Profit and Loss Account 6.77 —
Investment allowanc e reserve 1.26 —
Deferred tax 19.15 —
Shares issued to shareholders of Lakshmi Auto Components Ltd. 0.65 —
Long term borrowings:
Repayment made (19.80) (38.55)
Transfer on amalgamation 12.30 —
Repayment of unse cured loans (14.10) (6.39)
Sales tax deferral loan availed 14.75 12.99
Sales tax deferral loan repaid — (1.57)
Interest paid (10.30) (11.24)
Dividend and dividend tax paid (35.14) (11.55)
16.77 (56.31)
Net cash used in financing activities (C) 16.77 (56.31)
D. Net increase in cash and cash equivalents (A+B+C) (68.43) 19.72
Cash and cash equivalents at the beginning of the year 81.03 61.31
Cash and cash equivalents at the end of the year 12.60 81.03
Notes:
1. The above statement has been prepared in indire ct method except in case of interest, dividend and purchase and sale of invest ments which have been considered
on the basis of actual movement of cash.
2. Cash and cash equivalents represent cash and bank balances.
VENU SRINIVASAN H. LAKSHMANAN S.G. MURALI As per our report annexed
Chairm an & Managing Dire ctor Director Vice President – Finance For Sund aram & Srinivasan
Chartered Accountants

Chennai T.S. RAJAGOPALAN M. BALASUBRAMANIYAM

June 28, 2004 Secretary Partner

43
 SUNDARAM AUTO COMPONENTS
LIMITED

Balance Sheet abstract and company’s general business profile

I. Registration details:

Registration no. 2 2 8 4 5 of 1992 1 8

State code
Balance sheet date 3 1 0 3 2 0 0 4
Date Month Year
II. Capital raised during the year ( amount in Rs. thousands)

Public issue Nil Rights issue Nil

Bonus issue Nil Private placement Nil

III. Position of mobilisation and deployment of funds ( amount in Rs. thousands)

Total lia bilities 8 1 7 0 1 0 0 Total assets 8 1 7 0 1 0 0

Sources of Funds
Paid up capital 2 3 7 5 0 0 Reserves and surplus 5 5 1 2 0 0 0
Secured loans 3 7 5 0 0 0 Unsecured loans 8 1 5 1 0 0

Deferred tax lia bility 1 2 3 0 5 0 0

Applic ation of Funds

Net fixed assets 6 9 4 6 6 0 0 Capital work-in-progress 9 5 2 0 0
Investments 1 2 8 0 2 0 0 Net current assets – 2 8 0 9 0 0
Misc. expenditure 1 2 9 0 0 0
IV. Performance of the company ( amount in Rs. thousands)

Turnover 2 8 2 0 2 1 0 0 Total expenditure 2 6 0 5 6 8 0 0

Profit before tax 2 1 4 5 3 0 0 Profit after tax 1 3 8 4 9 0 0

Earnings per share (Rs) 5 . 8 3 Dividend rate (%) 1 3 0

V. Generic names of three princip al products/services of company ( as per monetary terms (ITC Code) Product description
Item Code No. (ITC Code)
Mopeds, Motorcycles and Scooters 8 7 1 1 . 0 0

Parts for the above 8 7 1 4 . 0 0

IC Engines for the above 8 4 0 7 . 0 0

44
 SUNDARAM AUTO COMPONENTS
LIMITED
Board of Directors Bankers
H. LAKSHMANAN
STATE BANK OF MYSORE
C. NARASIMHAN Hosur Branch, Hosur
V. N. VENKATANATHAN 635 109.
BANK OF BARODA
Secretary Main Branch, K.G. Road,
Bangalore 560 001.
R. MADHAVAN
Registered office
Auditors J ayalakshmi Estates,
SUNDARAM & SRINIVASAN 24 (Old No.8), Haddows Road,
Chennai 600 006.
Chartered Accountants,
23, Sir C.P. Ramaswamy Road,
Alwarpet, Chennai 600 018. Factory
Belagondapalli, Hosur 635 114.

Directors’ report to the shareholders of the

from 2nd April 2003. As per the scheme, LAC was liquidated without the proc ess of winding up and
company consequently the company has be come a wholly owned subsidiary of TVSM.
The Company continues to remain as an unlisted company.
The directors present the 12th annualreport together with the audited statement of accounts for the ye ar
ended 31st March 2004. 5. PERFORMANCE DURING THE YEAR
2. FINANCIAL HIGHLIGHTS The company has achieved a turnover of Rs. 6584. 12 lakhs during the year, which includes export
turnover of Rs. 318.39 lakhs.
Rupees in thousands
6. BUSINESS OUTLOOK
Details Year ended Year ended
31-03-2004 31-03-2003 The two-wheeler industry is expe cted to grow at 9% to 10% in 2004-05 as compared to the previous year.
Henc e, the turnover of the company for 2004-05 is expe cted to have a moderate growth over last ye ar.
Income from operations 65,84,12 32,46 The company has obtained order forsupply of critical plastic components from a passenger car
manufacturer.
Profit before tax 5,63,54 4,23
Efforts are being made towards exports and other domestic automotive sectors which would contribute for
Provision for taxation (including deferred tax) 2,03,00 1,56 significant growth in the coming years.
Profit after tax 3,60,54 2,67
7. DIRECTORS
Add : Surplus brought forward 7,62 4,95
Mr. M. N. Muralikrishna and Mr R. Subramanian resigned from the board effe ctive 1st April 2004. The dire
3,68,16 7,62 ctors wish to place on re cord their appre ciation of the servic es rendered by Mr M. N. Muralikrishna and Mr
R. Subramanian during their tenure as directors of the company.
Less : Tax relating to earlier years
Mr V. N. Venkatanathan, dire ctor isliable to retire by rotation at the ensuing annual general meeting and is
eligible for re-appointment.
15 —
8. DEPOSITS
Profit available for appropriation 3,68,01 7,62
The company has not accepted any deposits from the public within the meaning of Section 58-A of the
Proposed dividend at 30% 81,00 — Companies Act, 1956 during the year ended 31st March 2004.
Tax on dividend 10,38 — 9. AUDITORS
Transfer to general reserves 1,85,00 —
M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai retire at the ensuing annual general meeting
Balanc e surplus in profit and loss a/c carried forward 91,63 — and are eligible for re-appointment.

3. DIVIDEND 10. STATUTORY STATEMENTS

The dire ctors re commend a dividend of 30% for the ye ar ended 31st March 2004. The dividend, if As per the requirements of se ction 217(1)(e) of the Companies Act, 1956, read with the Companies
approved, by the shareholders, would absorb a sum of Rs. 81 lakhs and will be paid to the shareholders (Disclosure of Particulars in the Report of Board of Dire ctors) Rules, 1988, the information regarding
whose names stand on the register of members on the date of de claration. conservation of energy, technology absorption and foreign exchange earnings and outgo are furnished in
annexure I to this report.
4. ACQUISITION OF RUBBER AND PLASTIC BUSINESSES OF LAKSHMI AUTO The particulars required pursuant to se ction 217(2A) of the Companies Act, 1956, read with the Comp anies
COMPONENTS LIMITED (Particulars of Employees) Rules, 1975, as amended by Comp anies (Particulars of Employees) Rules, 2002
are furnished in annexure II to this report.
On 1st April 2003, the entire paid up capital of the company viz., 2,50,000 equity shares of Rs. 10/- each
aggregating to Rs. 25lakhs was acquired by Lakshmi Auto ComponentsLimited (LA C ). C onsequently, the Asrequired undersection 217 (2AA) of the Companies Act, 1956, the director’sresponsibility statement is
c omp any be came a subsidiary of LA C with effe ct from 1st Aprill 2003. given in annexure III to this report.
On 17th O ctober 2003, the board of dire ctors of the company approved a scheme of arrangement between For and on behalf of the board
the company, LAC and TVS Motor Company Limited (TVSM). As per the scheme, the assets and liabilities
ofrubber and plastic businesses of LAC were transferred to the company on slump sale basis on 1st April 2003 Chennai H. LAKSHMANAN V. N. VENKATANATHAN
for a consideration of Rs. 12.25 crores. In terms of the scheme which was approved by the Hon’ble High
Court of Madras vide its order dated 23rd March 2004, the company issued and allotted to LAC 24,50,000 June 28, 2004 Dire ctor Dire ctor
equity shares of Rs. 10/- each at a premium of Rs. 40 per share as on 1st April 2003.
The remaining business of LAC viz., engine components division together with itsinvestments in other bodies
corporate including the shares held by LAC in Sundaram Auto Components Ltd in terms of the scheme of
arrangement were transferred and vested inTVSM with effe ct

45
SUNDARAM AUTO COMPONENTS
LIMITED

Annexure I to Directors’ report for the year Proposed measures

(a) Providing Variable Frequency Drive for Moulding Presses and Motors.
ended 31st March 2004. Inform ation as re (b) Optimising energy consumption by relaying of water and air lines
(c) Conversion of ste am he ated presses into ele ctrically he ated presses
quire d und er Section 217(1)( e ) of the The above me asures are expe cted to result in an annual savings of Rs. 15.90 lakhs.

Companies Act, 1956. B. FOREIGN EXCHANGE EARNINGS AND OUTGO

(a) ) Earnings : Rs. 318.39 lakhs
A.CONSERVATION OF ENERGY (b) Outgo : Rs. 746.20 lakhs

Measures taken For and on behalf of the board

(a) Provision of Variable Frequency Drive for Moulding presses.

(b) Installation of ele ctronically controlled variable displac ement hydraulic pump in Inje ction
Moulding Machines. Chennai H LAKSHMANAN V N VENKATANATHAN
June 28, 2004 Dire ctor Dire ctor
(c) Better utilisation by optimisation of proc ess parameters.
(d) Conversion of ste am he ated presses into ele ctrically he ated presses.
The above me asures have resulted in an annual savings of approximately Rs.13.66 lakhs.

Annexure II to Directors’ report to the shareholders

Particulars of employees as per section 217 (2A) of the Companies Act, 1956

Sl. Name Age Designation Date of employment Remuneration Qualification Experience Previous employment
No. (Yrs.) (Gross) (Yrs)
Rs.
Employed throughout the year

1 Capt. N. S. Mohan Ram 68 Director-Projects 1.04.2000 36,30,070 B.Tech (Hons); MBA; 46 Director-Projects,
PG in W arship Design (UK) TVS-Suzuki Ltd.
2. Dr. Malini Srinivasan 49 VP - Education and Training 21.3.2003 24,12,839 M.A., Phd. 15 GM, Horticultural and
Construction Engineers (India)(P) Ltd

Notes:
1 Years of experienc e also include experienc e prior to joining the company.
2 Remuneration comprises of salary, performanc e inc entive, house rent allowanc e, spe cial allowanc e, conveyanc e allowanc e, contribution to provident fund and superannuation fund wherever applicable, medical
insuranc e premium, leave travel assistanc e and other benefits evaluated under the Income tax rules .
3 Besides, employees are entitled to gratuity as per rules.
4 None of the above employees is related to any of the dire ctors of the company.
5 Terms of employment of all the employees mentioned above are contractual.
6 None of the above employees either individually or together with spouse or children held more than 2% of the equity shares of the company.
For and on behalf of the board

Chennai H. LAKSHMANAN V. N. VENKATANATHAN

June 28, 2004 Dire ctor Dire ctor

Annexure III to Directors’ report for the year ended 31st March 2004
Directors’ Responsibility Statement as required under Section 217(2AA) of the Companies Act, 1956.
The Dire ctors hereby state :
iii. that the dire ctors had taken proper and sufficient care for the maintenanc e of adequate accounting re
i. that in the preparation of the annual accounts for the financial ye ar ended 31 st cords in accordanc e with the provisions of the Companies Act for safeguarding the assets of the
March 2004, the applicable Accounting Standards had been followed and there company and for preventing and dete cting
is no material departure. fraud and other irregularities;
iv. that the dire ctors had prepared the annual accounts for the financial ye ar ended 31st March 2004 on a
ii. that the dire ctors ha d sele cted such acc ounting policies and a pplied them c onsistently “going conc ern basis”.
and ma de judgements and estimates that are re asona ble and prudent so as to give a true and fair
view of the state of affairs of the company as For and on behalf of the board
at 31st March 2004 and of the profit of the company for the financial ye ar ended on that date. Chennai H. LAKSHMANAN V. N. VENKATANATHAN
June 28, 2004 Dire ctor Dire ctor

46
SUNDARAM AUTO COMPONENTS
LIMITED

Auditors’ report to the shareholders loans and lease financ e from two companies listed in the register maintained under Se ction 301 of
the Companies Act, 1956 amounting to Rs.675.09 lakhs. (Balanc e due as at the year end Rs.857.53
lakhs).
We have audited the attached Balance Sheet of M/s.Sundaram Auto ComponentsLimited, Chennai 600 006
as at 31st March 2004, the Profit and Loss account for the year ended on that date annexed thereto and the b) In our opinion the rate of interest and other terms and conditions of such unse cured loans taken are
Cash Flow statement for the year ended on that date . These financial statements are the responsibility of not prima facie prejudicial to the interest of the company.
the company’s management. Our responsibility is to express an opinion on these financial statements based c) In our opinion the payment of principal amount and interest thereon were regular.
on our audit.
d) As on the date of Balanc e Sheet there was no overdue amount payable on the said unse cured
1. We conducted our audit in accordance with auditing standards generally accepted in India. These loans.
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financialstatements are free from material misstatement. An audit includes examining, 4. In our opinion and according to the information and explanations given to us, there are adequate internal
on a test basis, evidenc e supporting the amounts and disclosuresin the financialstatements. An audit control proc edures commensurate with the size of the company and the nature of its business with
also includes, assessing the accounting principles used and significant estimates made by regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no
management, as well as evaluating the overall presentation of the financialstatements. We believe major weakness has been notic ed in the internal control.
that our audit provides a reasonable basis for our opinion. 5. a) Based on the audit proc edures applied by us and according to the information and explanations
2. As required by the Companies (Auditors’ Report) Order, 2003 issued by the Central Government in provided by the mana gement, we are of the opinion that the transactions that need to be entered in
terms of Sub-se ction (4A) of se ction 227 of the Companies Act, 1956, we enclose in the annexure the register maintained in pursuanc e of Se ction 301 of the Companies Act, 1956 have been
a statement on the mattersspe cified in paragraph 4 and 5 of the said Order. properly entered in the said register;
b) In our opinion and according to the information and explanations given to us, the transactions entered in
3. Further to our comments in the annexure referred to above, we state that - the register maintained under Secation 301 and exceeding during the year by Rupeesfive lakhsin
(i) We have obtained all the information and explanations, which to the best of our knowledge respect of each party have been made at prices which are reasonable having regard to prevailing
and belief, were ne c essary for the purpose of our audit; market prices at the relevant time;
(ii) In our opinion, proper books of account, as required by law, have been kept by the 6. The company has not accepted any deposits from the public.
company so far as appears from our examination of such books; 7. The company has an internal audit system which, in our opinion, is commensurate with the size and
(iii) The Balanc e Sheet, Profit and Loss account and Cash Flow statement referred to in this nature of its business;
report are in agreement with the books of account; 8. We have broadly reviewed the books of account maintained by the company pursuant to the rules made
(iv) In our opinion, the Balanc e Sheet, Profit and Loss account and the Cash Flow statement by the Central Government under Section 209(1)(d) of the Companies Act, 1956 for maintenanc e of
dealt with by this report comply with the accounting Standards, referred to in sub-se ction cost re cords and are of the opinion that, prima facie, the prescribed accounts and re cords have been
(3C) of se ction 211 of the Companies Act, 1956; made and maintained;
(v) On the basis of written representations re c eived from the dire ctors, as on 31st March 2004 9. a) According to the re cords provided to us, the company is regular in depositing undisputed statutory
and taken on record by the board of directors, we report that no dire ctor is disqualified from dues including Provident fund, Income tax, Sales tax, Wealth tax, Customs duty, Excise duty, C ess
being appointed as a dire ctor of the company in terms of clause (g) of sub-se ction (1) of se and other material statutory dues with the appropriate authorities.The provisions of ESI Act are not
ction 274 of the Companies Act, 1956; applicable to the company.
(vi) In our opinion and to the best of our information and according to the explanations b) According to the information and explanations given to us, no undisputed amounts payable in respe
given to us, the said accounts read together with the notes thereon give the information ct of Income tax, We alth tax, Sales tax, Customs duty, Excise duty and Cess were in arrears, as at
required by the Companies Act, 1956, in the manner so required and give a true and fair 31st March 2004 for a period of more than six months from the date they be came payable.
view in conformity with the accounting principles generally accepted in India
c) According to the information and explanations given to us, the following are the details of the
a. in so far as it relates to the Balanc e Sheet, of the state of affairs of the company as disputed dues, that was not paid to the conc erned authorities;
at 31st March 2004;
Name of the Statute Nature of Amount Forum where
b in so far as it relates to the Profit and Loss account, of the profit of the company for dues (Rs.in lakhs) dispute is pending
the year ended on that date; and
c in so far as it relates to the Cash Flow statement, of the cash flows for the ye ar Central Excise Act, 1944 Cenvat / Excise 8.06 Central Excise & Servic e
ended on that date. duties Tax Appellate Tribunal
For Sundaram & Srinivasan
Chartered Acc ountants 10. The company neither has accumulated losses as at the end of the financial year nor has
incurred cash losses during the financial year and in the immediately pre c eding year.

Chennai M BALASUBRAMANIYAM 11. Based on our verification and according to the information and explanations given by the
Partner management, the company has not defaulted in repayment of dues to banks;
June 28, 2004
Membership No. F7945 12. Based on our examination and according to the information and explanations given to
us, the company has not granted loans and advanc es on the basis of se curity by way of pledge of
shares, debentures and other se curities;
Annexure referred to in our report of even 13. The company is not a chit / nidhi / mutual benefit fund / society and clause (xiii) of the order
is not applicable;
date on the accounts for the year ended 31st 14. The company is not de aling or trading in shares, se curities, debentures and other
investments;
15. Based on our examination and according to the information and explanations given by the
March 2004. management, the company has not given any guarantee for loans taken by others from bank or financial
institutions.
1. a) The company has maintained proper re cords showing full particulars including quantitative details 16. During the year the company has not availed any term loan.
and situation of fixed assets. 17. On the basis of our examination, the company has not used funds raised on short term basis for long
b) All the assets have not been physically verified by the management during the year but there is a term investment and vic e-versa.
regular programme of verification at reasonable intervals, which, in our opinion, isreasonable 18. During the year the company has not allotted any shares on preferential basis to parties and companies
having regard to the size of the company and the nature of its assets. No material discrepancies covered in the register maintained undersection 301 of the Companies Act, 1956.
were notic ed on such verification. 19. During the year, the company has not issued any se cured debentures;
c) The assets disposed off during the year are not substantial and therefore do not affe ct the going 20. During the year the company has not raised any money by public issue;
conc ern status of the company.
21. Based on the audit proc edures adopted and information and explanations given to us by the
2. a) The inventory other than in-transit have been physically verified at reasonable intervals during the year management, no fraud on or by the company has been notic ed or reported during the course of our
by the management. In our opinion the frequency ofsuch verification is adequate. In respe ct of audit.
inventory with third parties which have not been physically verified, there is a proc ess of obtaining For Sundaram & Srinivasan
confirmation from such parties.
Chartered Acc ountants
b) In our opinion and according to the information and explanations given to us, the proc edures for
physical verification of inventory followed by the management were reasonable and adequate in M BALASUBRAMANIYAM
relation to the size of the company and the nature of its business.
Chennai Partner
c) In our opinion, the company has maintained proper re cords of inventory. The discrepancies
between the physical stocks and the book stocks were not material and have been properly dealt June 28, 2004 Membership No. F7945
with in the books of account.
3. a) During the year, the company has not granted any loans, se cured or unse cured to companies, firms
or other parties covered in the register maintained under Se ction 301 of the Companies Act, 1956.
During the year the company has taken unse cured

47
SUNDARAM AUTO COMPONENTS
LIMITED

Balance Sheet as at 31st March 2004 Profit and Loss Account for the year ended
Rupees in thousands 31st March 2004
Schedule As at As at
Number 31-03-2004 31-03-2003 Rupees in thousands
Schedule Ye ar ended Ye ar ended
I SOURCES OF FUNDS Number 31-03-2004 31-03-2003

1 Shareholders’ funds
a) Capital I 2,70,00.00 25,00.00
b) Reserves and Surplus II 12,56,67.48 7,62.10
15,26,67.48 32,62.10

48
 SUNDARAM AUTO COMPONENTS
LIMITED
Gross Sales 76,05,99.68 —

Sub-contract income 1,16.71 —

Total 76,07,16.39 —

2 Loan funds Less : Excise duty 10,85,71.84 —

a) Se cured loans III 2,24,14.05 — Net Sales 65,21,44.55 —

b) Unse cured loans IV 9,35,05.70 89,05.70
Other Income XIV 62,67.42 32,45.70
11,59,19.75 89,05.70

3. Deferred tax liability Raw materials and components consumed XV 37,89,86.87 —

(net of deferred tax assets) 88,00.00 —
Labour charges 1,16,83.83 —
Total 27,73,87.23 1,21,67.80
Salaries and wages, stores consumed
and other expenses XVI 18,62,23.66 28,22.85
II APPLICATION OF FUNDS
Profit before interest, depreciation and tax 8,15,17.61 4,22.85
1 Fixed assets
a) Gross block V 24,42,49.70 1,09,49.45 Interest (net) XVII 66,45.57 —
b) Less: Depre ciation 1,85,15.10 —
c) Net block 22,57,34.60 1,09,49.45 Depre ciation 1,85,18.21 —

d) Capital work-in-progress VI 31,97.51 — Profit before tax 5,63,53.83 4,22.85

2 Investments VII 1,70.00 — Provision for taxation 1,15,00.00 1,56.00

3 Current assets, loans and Provision for deferred tax 88,00.00 —

advances
a) Inventories VIII 3,93,17.54 — Profit for the year (after tax) 3,60,53.83 2,66.85

b) Sundry debtors IX 8,13,55.53 7,98.00 Balanc e profit brought forward 7,62.10 4,95.25
c) Cash and bank balances X 27,28.49 53.86 Profit for the year 3,60,53.83 2,66.85
d) Loans and advances XI 3,26,80.54 4,89.57
Total 3,68,15.93 7,62.10
Total (A) 15,60,82.10 13,41.43
Proposed dividend 81,00.00 —
Current liabilities and provisions
Provision for dividend tax 10,37.81 —
a) Current liabilities XII 9,56,56.01 1,23.08
b) Provisions XIII 1,21,40.97 — Tax relating to earlier years 14.71 —

Total (B) 10,77,96.98 1,23.08 Transfer to general reserves 1,85,00.00 —

Net current assets (A-B) 4,82,85.12 12,18.35

Total 27,73,87.23 1,21,67.80

4 Notes on accounts XVIII

49
SUNDARAM AUTO COMPONENTS
LIMITED
Balanc e surplus carried forward to Balanc e Sheet 91,63.41 7,62.10

Total 3,68,15.9
3
7,62.10

H. LAKSHMANAN V.N. VENKATANATHAN As per our report annexed For H. LAKSHMANAN V.N. VENKATANATHAN As per our report annexed For
Dire ctor Dire ctor Sundaram & Srinivasan Sundaram & Srinivasan
Chartered Acc ountants Dire ctor Dire ctor Chartered Acc ountants

Chennai June
28, 2004
R. MADHAVAN M. Chennai June R. MADHAVAN M. BALASUBRAMANIYAM
28, 2004 Partner
Se cretary BALASUBRAMANIYAM Se cretary
Partner

50
SUNDARAM AUTO COMPONENTS
LIMITED

Schedu
les Rupees in thousands
As at As at
Rupees in thousands
As at As at
31-03-2004 31-03-2003 31-03-2004 31-03-2003

II RESERVES AND SURPLUS

a) Capital reserve
Arising on transfer and vesting of Rubber and Plastics divisions
I CAPITAL of M/s. Lakshmi Auto C omponents Limite d,

Authorised
50,00,000 (last year 2,50,000) Equity shares of Rs.10/- each 5,00,00.00 25,00.00 Chennai 4.07 —
Issued, subscribed and paid up b) Share premium account 9,80,00.00 —
27,00,000 (last year 2,50,000) Equity shares of Rs.10/- each 2,70,00.00 25,00.00 c) G eneral reserves
fully paid Transfer from Profit and Loss account 1,85,00.00 —
Of the above, 24,50,000 equity shares are to be allotted to M/s. Lakshmi d) Surplus
Auto C ompone nts Limite d, C he nn ai for c onsid eration other than in Balance in Profit and Loss account 91,63.41 7,62.10
cash b eing the slump sale consideration of assets minus liabilities of
12,56,67.48 7,62.10
Rubber and Plastics divisions of M/s. Lakshmi Auto Components Limited,
Chennai transferred to and vested in the company in terms of the scheme III SECURED LOANS
of arrangement approved by the Hon’ble High Court of Judicature at
From banks
Madras. These shares have since been allotted to M/s.TVS Motor
Company Limited, Chennai on 1st April 2004 c onsequent to the amalg a) Se cured by hypothe cation of inventory and re c eivables and
equitable charge on movable machineries and land
amation of M/s. Lakshmi Auto Components Limited, with M/s. TVS
and buildings. 2,24,14.05 —
Motor Company Limited,
Chennai on 2nd April 2003. 2,24,14.05 —
2,70,00.00 25,00.00
IV UNSECURED LOANS
a) From ultimate holding company (Long term) 88,55.70 89,05.70
b) From holding company (Long term) 8,46,50.00 —

9,35,05.70 89,05.70

V FIXED ASSETS Rupees in thousands

Plant & Furniture,

Description Land Buildings Machinery, Fixtures & Vehicles Total
Tools, Dies Equip- As at As at
and Jigs ments 31-03-2004 31-03-2003

Cost

As at 01-04-2003 1,09,49.45 — — — — 1,09,49.45 1,09,49.45

Additions 2,21,34.30 3,43,83.66 17,04,13.75 36,99.65 26,77.35 23,33,08.71 —

Sales / Deletion — — 5.69 — 2.77 8.46 —

Total 3,30,83.75 3,43,83.66 17,04,08.06 36,99.65 26,74.58 24,42,49.70 1,09,49.45

Depreciation
Upto 31-03-2003 — — — — — — —
For the year — 11,12.48 1,60,46.00 8,87.40 4,72.33 1,85,18.21 —

Withdrawn on
assets sold / — — 0.34 — 2.77 3.11 —
deleted

Total — 11,12.48 1,60,45.66 8,87.40 4,69.56 1,85,15.10 —

Written Down value

As at 31-03-2004 3,30,83.75 3,32,71.18 15,43,62.40 28,12.25 22,05.02 22,57,34.60 —
As at 31-03-2003 1,09,49.45 — — — — — 1,09,49.45

49
 SUNDARAM AUTO COMPONENTS
LIMITED
Schedules – ( continued) Rupees in thousands Rupees in thousands
As at As at Ye ar ended Ye ar ended 31-03-
31-03-2004 31-03-2003 2004 31-03-2003
VI CAPITAL WORK-IN-PROGRESS
XIV OTHER INCOME
Machinery in transit / installation 31,97.51 —
a) Sale of scraps and empties 24,48.47 —
— b) Dividend 14.00 —
31,97.51
c) Le ase income 37.11 —
VII INVESTMENTS (at cost) d) Profit on sale of fixed assets 29.49 —
Non-trade-Long Term quoted e) Misc ellaneous income 37.38.35 32,45.70

2000 Equity shares of Rs 10/- each fully paid up in 62,67.42 32,45.70

Bank of Baroda, Vadodara. 1,70.00 —
XV RAW MATERIALS AND COMPONENTS CONSUMED
1,70.00 —
(Market value of quoted investments Rs. 485.40 thousands) Stock acquired from transferor company
Raw materials 1,05,21.26 —
VIII INVENTORIES (at cost) Work-in-process 76,47.77 —
* a) Raw materials and components 1,29,96.06 — Finished goods —
24,52.02
* b) Work-in-proc ess 1,10,84.82 — 2,06,21.05 —
Purchase of raw materials and components 38,47,62.64 —
* c) Finished goods 23,15.94 — Total (A) 40,53,83.69 —
* d) Stores 14,49.29 — Less: Closing stock
e) Goods-in-transit 1,14,71.43 — Raw materials 1,29,96.06 —
Work-in-process 1,10,84.82 —
3,93,17.54 — Finished goods
* (as c ertified by a dire ctor) 23,15.94 —
IX Total (B) 2,63,96.8 —
2
SUNDRY DEBTORS - UNSECURED CONSIDERED GOOD 37,89,86.8 —
(A–B)
b) Other debts 8,06,05.08 7,98.00 * a) Salaries, wages and allowances 7
5,33,38.79 24,88.66
8,13,55.53 7,98.00 * b) Workmen and staff welfare expenses 1,23,30.94 —

* c) Contribution to provident and other funds 80,78.20 2,59.62

X CASH AND BANK BALANCES
a) Cash on hand 59.48 — * d) Stores and tools consumed 35,68.90 —

b) With scheduled banks in current accounts 26,24.36 53.86 * e) Power and fuel 3,29,29.29 —

c) With scheduled banks in deposit accounts 44.65 — * f) Rent 9,42.27 —

27,28.49 53.86 g) Rates and taxes 1,29,87.49 5.25

* h) Repairs and maintenanc e
XI LOANS AND ADVANCES - UNSECURED CONSIDERED GOOD
i) on buildings 31,61.70 —
a) Advanc es re coverable in cash or in kind
or for value to be re c eived 2,34,88.55 — ii) on machinery 1,53,94.93 —
b) Deposits 34,89.63 — iii) on other assets 16,20.22 —
c) Advanc e payment of tax less provisions 57,02.36 4,89.57
* i) Insurance 28,85.59 —
3,26,80.54 4,89.57
j) Audit fees 3,34.80 54.00
XII CURRENT LIABILITIES * k) Other expenses 3,86,50.54 15.32
18,62,23.66 28,22.85
Sundry creditors 9,56,56.01 1,23.08
* net of re coveries
9,56,56.01 1,23.08

XIII PROVISIONS XVII INTEREST (NET)

a) Proposed dividend 81,00.00 — a) On fixed loans 46,66.76 —

b) Others 20,99.42 —
b) Dividend tax 10,37.81 —
67,66.18 —
c) Pension fund 22,30.26 —
Less : Interest income on advances and deposits (gross) 1,20.61 —
d) Le ave salary 7,72.90 —
66,45.57 —
1,21,40.97 —

50
SUNDARAM AUTO COMPONENTS
LIMITED
Schedules – ( continued)
Rupees in thousands As at/ Rupees in thousands As at /
As at /
As at/ Ye ar ended Ye ar ended
XVIII NOTES ON ACCOUNTS Ye ar ended Ye ar ended 31-03-2004 31-03-2003
31-03-2004 31-03-2003
1. ACCOUNTING STANDARDS
a) AS – 1 Disclosure of Accounting policies:
Cost of vehicles include vehicles acquired under

The accounts are maintained on accrual basis as a going finance lease. 11,60.15 Nil
conc ern.
h) AS – 11 A cc ounting for effe c ts in Foreign exchange
b) AS – 2 Valuation of Inventories: rates:
Inventories are valued in accordanc e with the method of Purchase of imported raw materials, components and
valuation prescribed by The Institute of Chartered spares are accounted based on retirement memos from
Accountants of India at weighted average rates. banks. In respe ct of liabilities on import of raw materials,
components and spares for which invoic es/bills are not re
c) AS – 3 Cash flow statements: c eived, the lia bility is acc ounte d b ase d on the m arket
The cash flow statement is pre p are d und er “Indire ct exchange rates prevailing on the date of the balanc e
method” and the same is annexed. sheet.
Sales include realised exchange fluctuation on exports.
d) AS – 5 Net profit or loss for the period, prior period
items and changes in accounting policies Nil Nil Net exchange differenc e
a) Debited to Profit and Loss Account. 5,58.42 Nil
e) AS – 6 Depre ciation accounting:
b) Credited to carrying amount of fixed assets 1,42.87 Nil
i) Depre ciation has been provided under the straight
line method at the rates prescribed under schedule i) AS – 13 Accounting for Investments:
XIV of the Companies Act, 1956 with the Investments are valued at cost.
applicable shift allowanc e. In respe ct of the assets
added/sold during the y e ar, pro-rata d e pre ciation j) AS – 15 Accounting for retirement benefits:
h as b een provided at the rates prescribed under
schedule XIV of the Companies Act 1956. i) Contributions to provident fund are made to a
ii) Depre ciation in respe ct of computers and vehicles recognised Trust in respect of excluded employees.
has been provided @ 30% and 18% respe ctively In respe ct of other employees, the contribution is
which is higher than the rate prescribed in schedule made to Government.
XIV of the Companies Act, 1956.
ii) Provision for leave salary to employees is made
iii) Depre ciation in respe ct of moulds has been provid on the basis of actuarial valuation.
e d b ase d on the qu a ntity of components
manufactured. iii) Provision for pension for senior managers is made
on actuarial valuation basis for current and past
iv) Depre ciation in respe ct of assets acquired during servic es.
the year whose actual cost does not exc eed Rs.
5000/- has been provided at 100%. iv) C ontributions to gra tuity a nd superannuation
fund are ma de to Life Insura n c e C orpora tion
f) AS – 9 Revenue re cognition:
of India in accordanc e with the scheme framed by
The income of the company is derived from sale of the corporation.
rubber and plastics components and include realised k) AS – 16 Borrowing cost:
exchange fluctuations on exports.
The borrowing c ost h as b ee n tre a te d in acc or d a n c
Interest income isrecognised on a time proportion basis
taking into account the amount outstanding and the rate e with A cc ounting Sta nd ard on Borrowing costs (AS
applicable. 16) issued by The Institute of Chartered Accountants of
India. During the year, there w ere no borrowings a ttribut
Dividend from investmentsin sharesisre cognised when a ble to qualifying assets and henc e no borrowing costs
the c omp any in whic h they are held de clares the have been capitalised.
dividend and when the right to re c eive the same is
established. l) AS – 17 Segment reporting:
The revenue and expenditure are accounted on a going The company operates in only one segment viz.,
conc ern basis. Automotive Components. Hence the Accounting Stand
ard (AS 17) - Segment reporting is not applicable.
g) AS – 10 Accounting for Fixed assets:
All the fixed assets are valued at cost including expenditure m) AS – 18 Related party disclosures:
incurred in bringing them to usable condition less depre
Disclosure is made as per the requirements of the standard
ciation.
and the same is annexed.

51
SUNDARAM AUTO COMPONENTS
LIMITED
Schedules – ( continued)
XVIII NOTES ON ACCOUNTS – ( continued)

Rupees in thousands As at Rupees in thousands

/ As at /
Ye ar ended Ye ar ended As at / As at /
Sl. No. Particulars of transactions Year ended Year ended
31-03-2004 31-03-2003 with related parties 31-03-2004 31-03-2003

n) AS – 19 Accounting of leases: 1. Sale of goods

i) Asset acquired under financ e le ase -holding company 45,61,93.01 —
- Vehicle -ultimate holding company 12,30,88.29 —
- Original cost 11,60.15 — 2. Rendering of servic es
ii) The net carrying amount as on the – holding company 32,00.00 —
balanc e sheet date 9,28.12 — 3. Re c eiving of servic es
iii) Minimum lease payments – holding company 86,35.31 —
- not later than one year- not discounted 5,03.45 — – ultimate holding company 10,28.13 —
- later than one year but not later than Fellow subsidiaries:
five years- not discounted 5,96.46 — – TVS Ele ctronics Ltd. 11,71.17 —
- later than five years- not discounted — —
– TVS Financ e and Servic es Ltd. 7,45.39 —
iv) Present value of Minimum lease payments
4. Trade advanc es re c eived during the ye ar
- not later than one year- discounted 3,68.94 —
– holding company 6,63,00.00 —
- later than one year but not later than
five years- discounted 3,67.19 — 5. Trade advanc es repaid during the ye ar
- later than five years- discounted — — – holding company 1,47,00.00 —
– ultimate holding company 50.00 —
v) Contingent rents re cognised as income in
the statement of profit and loss account — — 6. Amount outstanding as at Balanc e Sheet date:
Amount payable
vi) The total of future minimum sub-lease – holding company 5,63,65.14 —
payments expe cted to be re c eived under
non-canc ellable sub-leases as Fellow subsidiaries:
on 31st March 2004 — — – TVS Ele ctronics Ltd. 27.66 —
vii) G eneral description of the leasing – TVS Financ e and Servic es Ltd. 11,03.16 —
arrangements
- Nature of facility : Financ e lease Amount re c eivable
- Restriction imposed by lease arrangement – ultimate holding company 13,24.26 —
- Nil -
2. Share capital
o) AS – 22 Accounting for taxes on income: Current tax is The entire sh are ca pital is held by the holding c om p a
determined as the amount of tax payable in respe ct of ny, M/s. TVS Motor C om p a ny Limit e d, C h e nn ai, w
taxable income for the ye ar hic h is a subsidiary c om p a ny of M/s. Sund ara m - Cla yton
Deferred tax liability and assets are re cognised based on Limite d, C henn ai, the ultimate holding company.
timing differenc es 3 Sundry creditors include:
i)Deferred tax liability consists of: a) Amount due to small scale industrial units 1,26,67.19 —
- tax on depre ciation 97,68.86 —
b) Amount due to other industrial units 5,71,29.92 —
- tax on expenses admissible only on payment
basis under the Income-tax Act, 1961 1,08.53 — Amount payable to small scale industrial
(A) 98,77.39 — units - outstanding for more than 30 days
ii) Deferred tax asset consists of: (The company’s payment terms is 45 days)
- tax on provision in respe ct of expenditure which A.K. Asso ciates, A c m a Tools, Ara nth a ngi
will be allowed under the Chemicals (P) Ltd., Aravind Auto Spares, Asian P acka
Income-tax Act, 1961 only on gings, Auto C omps, Balaji Industrial C omponents,
payment basis. 10,77.39 — Bharath P acka gings, Buyers Engin eers (P) Ltd., C h
e nn ai Engin eers, G1 Auto (P) Ltd., Glow Impressors,
(B) 10,77.39 — Guardian Anti C orrosiv es (P) Ltd., H ar m en
iii) Deferred tax liability (net of deferred tax Manufacturing Co. (P) Ltd., Image Labels (P) Ltd., J.C.
asset) Engineering W orks, J a g a d eesan Industries, J a y c
ee Industries, Ka m a dhenu Enterprises, Kerbkonus
((A)-(B) * Refer Balanc e Sheet) 88,00.00 — Fasteners (P) Ltd., Lakshmi D esigners, M et al C
m) Annexure to AS -18 Related Party disclosure omps (India )
(P) Ltd., Micr o Te c h, Mini Nuts, Num a nn
Reporting entity Sundaram Auto Components Limited, Chennai List of Industries, Praveen Engg. Industries, Premier Plastics,
related Parties : Raghavendra Fabricators, Siddharth Polymers (P) Ltd.,
Holding Company TVS Motor Company Limited, Chennai Singh Plasticisers & Resins (I) Pvt. Ltd., Sri J othi
Ultimate holding company Sundaram-Clayton Limited, Chennai Engg., Sri L akshmi Packagings, STS Engg. Servic es,
Fellow subsidiaries a) TVS Ele ctronics Limtied, Chennai Suma Springs
b) Anusha Investments Limited, Chennai (P) Ltd., Supreme Packages, Suriya Plastics, Synthel
Paraffins (India) Ltd., V R Automats, Welmach Engg.,
c) Harita Stocks Limited, Chennai Yen Yes Industries.
d) TVS Investments Limited, Chennai
e) TVS Financ e and Servic es Ltd., Chennai

52
 SUNDARAM AUTO COMPONENTS
LIMITED
Schedules – ( continued)
XVIII NOTES ON ACCOUNTS – ( continued)

Rupees in thousands As 14 INFORMATION PURSUANT TO THE PROVISIONS OF PART II OF SCHEDULE VI OF THE

COMPANIES ACT, 1956 (VIDE NOTIFICATION DATED 30TH OCTOBER 1973 OF THE
at/ As at/ DEPARTMENT OF COMPANY AFFAIRS, GOVERNMENT OF INDIA)
Ye ar ended Ye ar ended
31-03-2004 31-03-2003
4 Sundry debtors include: Rupees in thousands
As at/
Amount due from a company under the same Ye ar ended
31-03-2004
management viz.,
M/s. Sundaram-Clayton Limited, Chennai 13,24.26 — I RAW MATERIALS CONSUMED
1 a) Basic raw materials Quantity Value
5 Deposits include: in kgs.
a) Deposits with C entral excise 85.11 — Carbon Black 343,544 1,24,32.99
Rayon Spools 123,142 2,06,06.05
6 Contingent liability not provided for: Natural Rubber 425,620 2,07,98.17
198,795 1,88,88.55
a) On counter guarantee given to banks 73,42.13 Synthetic
Nylon 66 &Rubber
6
145,284 2,18,76.82
—
b) Capital commitments not provided for 1,61,56.43 — ABS Material 638,199 5,14,99.99
Filled & Unfilled PP 923,345 5,72,97.34
7 Liability disputed and not provided for: Mould Materials (in nos.) 28 70,53.99
a) Excise 8,05.92 — Celcon M90 30,389 32,30.74
Polycarbonate Fog White 330,054 4,13,80.81
8 Audit fees comprise:
a) As auditors 2,70.00 54.00 b) Intermediates and components
Metal Inserts (in nos.) 14,910,138 3,37,22.96
b) Taxation matters 32.40 — Other intermediates 17,326,518 9,34,99.43
(which do not account for value of
c) Tax representation/c ertification 32.40 — more than 10% of the total
consumption)
9 Contribution to provident and other funds include: Total 38,22,87.84
a) Contribution towards gratuity as per scheme 2 CONSUMPTION OF RAW MATERIALS AND
framed by Life Insuranc e Corporation of India 17,48.22 — COMPONENTS
% of total Value
b) Contribution towards pension fund 22,30.26 —
consum-
10 Tax deducted at sourc e on: ption
a) Indigenous 82.5 31,52,31.88
a) Interest re c eipts 11.51 — b) Imports 17.5 6,70,55.96
b) Sub-contract re c eipts 17.66 — Total 100.0 38,22,87.84
c) Servic e income 1.15 — II CONSUMPTION OF MACHINERY SPARES
a) Indigenous 91.7 22,08.69
d) Professional servic es rendered 1,71.56 1,68.00
b) Imports 8.3 1,98.84
11 Repairs include: Total 100.0 24,07.53
III IMPORTS (CIF VALUE)
a) W ages 18,67.42 —
a) Raw materials 6,98,87.30
b) Stores consumed 18,48.94 —
b) Stores and spares 1,98.89
12 Other expenses include: c) Capital goods 5,76.97
IV OTHER EXPENDITURE IN FOREIGN EXCHANGE
a) Travel and stay expenses of auditors 19.38 2.00
a) Warehousing and logistics servic es 10,66.88
13 Previous ye ar’s figures are not c omp ara ble with those of the current b) Welfare -Training 20,39.17
ye ar as the company did not ha ve any manufacturing operations c) Travel 8,51.44
during the previous ye ar. The company acquired the assets and V EARNINGS IN FOREIGN EXCHANGE
liabilities of businesses of Rubber and Plastics divisions of M/s. a) F.O.B. value of Exports 3,06,04.68
Lakshmi Auto Components Limited, Chennai pursuant to the
order of the Hon’ble High C ourt of J udicature at M a dras with b) Freight and insuranc e 12,34.95
effe ct from VI SALE BY CLASS OF G OODS
1st April 2003. Quantity Value
in nos.
H. LAKSHMANAN V.N. VENKATANATHAN a) Rubber moulded components 30,559,564 16,27,71.13
As per our report annexed For
Dire ctor Dire ctor Sundaram & Srinivasan b) Plastic moulded components 15,079,583 45,46,10.16
Chartered Acc ountants
c) Air brake hoses (in mtrs.) 901,714 2,94,79.55
Chennai June d) Moulds 28 51,67.00
28, 2004
R. MADHAVAN M. VII GROSS INCOME FROM
Se cretary Total 65,20,27.8
BALASUBRAMANIYAM SUB-CONTRACT WORK RENDERED 1,16.71
Partner 4

53
 SUNDARAM AUTO COMPONENTS
LIMITED
Schedules – ( continued)
XVIII NOTES ON ACCOUNTS – ( continued)

VIII OPENING AND CLOSING STOCK OF G OODS PRODUCED DURING THE YEAR Rupees in thousands
Year ended 31st March 2004
Stock acquired from Production
transferor company meant for Closing stock
as at 01-04-2003 sale 01-04-2003 to 31-03-2004 As at 31-03-2004
Quantity Value Quantity Quantity Value
nos. nos. nos.
a) Rubber moulded components 96,064 19,22.95 30,534,275 70,775 23,05.50
b) Plastic moulded components 38,520 5,27.29 15,046,866 5,803 10.15
c) Air brake hoses (in mtrs.) 10 1.78 901,714 10 0.29
d) Moulds — — 28 — —
Total 24,52.02 23,15.94
H LAKSHMANAN V N VENKATANATHAN R. MADHAVAN As per our report annexed
Dire ctor Dire ctor Se cretary For Sundaram & Srinivasan
Chartered Acc ountants

Chennai M. BALASUBRAMANIYAM
June 28, 2004 Partner

Cash Flow Statement Rupeesin thousands

Rupees in thousands
Year ended Year ended
Year ended Year ended
31-03-2004 31-03-2003
31-03-2004 31-03-2003
A. Cash flow from operating activities (B) Cash flow from investing activities

Profit before current tax, deferred tax and Acquisition of fixed assets (23,33,08.71) —
extraordinary items 5,63,53.83 4,22.85 Sale of fixed assets 8.46 —
Depreciation 1,85,18.21 —
Capital work-in-progress (31,97.51) —
Depreciation on sale/scrapping of assets (3.11) —
Tax relating to earlier years (14.71) — Investments of transferor company (1,70.00) —
Interest paid-reconsidered under Interest received 1,20.61 —
financing activity 67,66.18 — Dividend received 14.00 —
Interest received - reconsidered under Lease income 37.11 —
investing activity (1,20.61) — (23,64,96.04) —
Dividend received - reconsidered under Net cash used in investing activities- (B) (23,64,96.04) —
investing activity (14.00) —
(C) Cash flow from financing activities
Lease income - reconsidered under
investing activity (37.11) — Issue of share capital 2,45,00.00 —
2,50,94.85 — Share premium 9,80,00.00 —
Operating profit before working Reserves consequent to amalgamation 4.07 —
capital changes 8,14,48.68 4,22.85 Secured loans of transferor company 2,24,14.05 —
Adjustmentsfor Unsecured loans of transferor company 3,30,50.00 —
Inventory (3,93,17.54) — Unsecured loans availed during the year 6,63,00.00 —
Repayment of unsecured loans (1,47,50.00) (19,50.00)
Interest paid (67,66.18) —
22,27,51.94 (19,50.00)
Net cash from financing activities- (C) 22,27,51.94 (19,50.00)
(D) Net increase / (decrease) in cash and
Trade receivables (8,05,57.53) 7,09.53 cash equivalent (A+B+C) 26,74.63 (9,76.54)
Loans and advances (2,65,38.96) — Cash and cash equivalents at the beginning
Trade payables 9,53,32.92 61.08 of the year 53.86 10,30.40
Provisions
Cash and cash equivalents at the end —
of the year 30,03.16 27,28.49 53.86
(4,80,77.95) 7,70.61 Notes:
Cash generated from operations 3,33,70.73 11,93.46 1. The above statement has been prepared in indirect method except in case of interest, dividend and purchase of
investments which have been considered on the basis of actual movement of cash.
Direct taxes paid 1,69,52.00 2,20.00
2. Cash and cash equivalent represent cash and bank balances.
Net cash from operating activities - (A) 1,64,18.73 9,73.4

H. LAKSHMANAN V. N. VENKATANATHAN R. MADHAVAN As per our report annexed

Dire ctor Dire ctor Se cretary For Sundaram & Srinivasan
Chartered Acc ountants

Chennai M. BALASUBRAMANIYAM
June 28, 2004 Partner

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 SUNDARAM AUTO COMPONENTS
LIMITED

Balance Sheet abstract and company’s Application of Funds

general business profile Net fixed assets 2 2 5 7 3 5 Capital work-in-progress 3 1 9 7

Investments 1 7 0 Net current assets 4 8 2 8 5
I. Registration details:
Misc. expenditure
Registration no. —
5 1 4 1 7 of 1 9 9 2 State code 18
Balance sheet date 31 03 2 0 0 4 IV.Performance of the company (Amount in Rs. thousands)
Date Month Year Turnover (includes other income) 6 5 8 4 1 2 Total Expenditure 6 0 2 0 5 8
II. Capital raised during the year (amount in Rs. thousands)
Profit before tax 5 6 3 5 4 Profit after tax 3 6 0 5 4
Public issue Nil Rightsissue Nil
Earnings pershare (Rs) 1 3 . 3 5 Dividend rate (%) 3 0
Bonusissue Nil Private placement Nil
V. Generic names of three principal products/Services of company (as per monetary terms)
III.Position of Mobilisation and deployment of funds (amount in Rs. thousands) Totalliabilities
Product Description Item Code No. (ITC Code:)
Total assets
2 7 7 3 8 7 2 7 7 3 8 7
Airbrake Hoses
Sources of Funds 4 0 0 9 . 0 0
Rubber Moulded Components Plastic Moulded
Paid up capital 2 7 0 0 0 Reserves and Surplus 1 2 5 6 6 7 4 0 1 6 . 9 9
Components
Secured loans 2 2 4 1 4 Unsecured loans 9 3 5 0 6 8 7 1 4 . 0 0

Deferred taxliability
8 8 0 0

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Consolidated Balance Sheet as at 31st March

2004
Rupees in crores
Schedule As at As at
number 31-03- 31-03-
I SOURCES OF FUNDS 2004 2003
1 Shareholders’ funds
( a) Capital I 23.75 23.10
(b) Reserves and Surplus II 538.45 562.20 444.97

421.87

2 Loan funds
( a) Secured loans III 39.74 61.55
(b) Unsecured loans IV 82.39 122.13 87.19 148.74

3 Deferred tax liability (net of deferred tax asset) 123.93 101.95

4 Minority interest — 24.88

Total 808.26 720.54

II APPLICATION OF FUNDS
1 Fixed Assets
( a) Gross block 1,156.99 998.76
(b) Less : Depreciation 439.76 366.48
( c) Net block V 717.23 632.28
(d) Capital work-in-progress VI 9.84 30.66

2 Investments VII 99.22 62.31

3 Current assets, loans and advances

( a) Inventories VIII 220.48 220.68
(b) Sundry debtors IX 57.33 55.31
( c) Cash and bank balances X 18.27 83.06
(d) Other current assets XI 0.19 —
(e) Loans and advances XII 143.96 92.77

Total (A) 440.23 451.82

Current liabilities and provisions

( a) Current lia bilities XIII 427.75 421.66

(b) Provisions XIV 43.41 34.87
Total (B) 471.16 456.53

Net current assets (A-B) (30.93) (4.71)

4 Miscellaneous expenditure to the
extent not written off or adjusted XV 12.90 —

Total 808.26 720.54

5 Notes on accounts XXI

VENU SRINIVASAN H. LAKSHMANAN S.G. MURALI As per our report annexed

Chairm an & Managing Dire ctor Director Vice President - Finance For Sund aram & Srinivasan
Chartered Accountants

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CONSOLIDATED ACCOUNTS OF TVS MOTOR COMPANY LIMITED AND ITS
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Chennai T.S. RAJAGOPALAN M. BALASUBRAMANIYAM
June 28, 2004 Secretary Partner

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Consolidated Profit and Loss Account for the year ended 31st March 2004
Rupees in crores

Schedule Year ended Year ended

number 31-03-2004 31-03-2003

Gross sales 3,290.45 3,130.63

Less: Excise duty 444.10 409.89
Net sales 2,846.35 2,720.74
Other Income XVI 36.52 21.04
Raw materials and components consumed XVII 1,854.51 1,769.13
Labour charges 1.17 2.41
Salaries and wages, stores consumed
and other expenses XVIII 723.52 635.13
Miscellaneous expenditure XIX — 0.47
Profit before interest, depreciation and tax 303.67 334.64
Interest (net) XX 1.88 7.20
Depreciation 81.74 94.46
Profit before tax 220.05 232.98
Provision for taxation 56.11 73.44
Provision for deferred tax 21.96 12.03
Pro-rata share of loss of associate 3.78 8.49
Profit for the year (after tax) 138.20 139.02
Balance profit brought forward 36.68 23.17
Transfer from Debenture redemption reserve 9.90 9.90
Investment allowanc e reserve withdrawn 3.04 —
Profit of transferor company for 1st April 2003 0.04 —
Tax relating to earlier years — 1.43
Profit for the year ( after tax) 138.20 139.02
Total 187.86 173.52
Tax relating to earlier years 0.74 —
I Interim dividend paid 14.78 11.55
II Interim dividend payable 16.63 16.17
Provision for dividend tax 4.25 2.68
Profit relating to minority shareholders — 6.44
Transfer to general reserves 121.85 100.00
Balance surplus carried forward to Balance Sheet 29.61 36.68
Total 187.86 173.52
Nominal value of each share in rupees 1.00 1.00
Earnings per share in rupees ( 23,75,43,557 shares- last year 23,10,00,700 shares) 5.83

6.02
Diluted earnings per share in rupees 5.83 6.02

VENU SRINIVASAN H. LAKSHMANAN S.G. MURALI As per our report

Chairm an & Managing Dire ctor Director Vice President - Finance annexed For Sund aram &
Srinivasan Chartered
Accountants

Chennai T.S. RAJAGOPALAN M. BALASUBRAMANIYAM

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June 28, 2004 Secretary Partner

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Consolidated Schedules
Rupees in crores
As at As at
31-03-2004 31-03-2003

I CAPITAL
Authorised
25,00,00,000 (Last year 2,50,00,000) Equity shares of Re.1/-
each
(Last year Rs. 10/- each) 25.00 25.00
25.00 25.00
Issued, subscribed and paid-up
(a) ) 23,10,00,700 (Last year 2,31,00,070) Equity shares of Re.1/- each
(last year Rs. 10/- each) fully paid 23.10 23.10
Out of the above, 23,10,00,000 (last year 2,31,00,000) equity shares of Re. 1/-e ach
(last year Rs. 10/- each) were allotted for consideration other than cash.
(b) 65,42,857 Equity shares of Re. 1/- each are to be allotted to the shareholders of erstwhile
transferor company on the basis of 10 equity shares of Re. 1/- each in the company for every 7
equity shares of Rs. 10/- each held by them in the transferror company viz. Lakshmi Auto
Components Ltd, Chennai for consideration other than cash i.e. the shares are to be allotted on
consideration for transfer and vesting of the assets and lia bilities of the said transferor company in
terms of the scheme of amalgamation approved by the Hon'ble High Court of Judicature at
Madras.
These shares have since been allotted on 24th April 2004. 0.65 —
23.75 23.10
II RESERVES AND SURPLUS
(a) ) Capital reserves
(i) On shares forfeited
As per last Balance Sheet (Rs. 20,700/-) —
Add : Transfer on amalgamation (Rs. 34,500/-) — — —
Total (Rs. 55,200/-)
(ii) On surplus arising out of amalgamation of Lakshmi Auto
Components Limited, Chennai. 6.43 —
(iii) On consolid ation of subsidiary accounts
As per last Balance Sheet 22.02 22.02
Less : Pro-rata loss of the associate prior to acquisition of control 4.05 4.05
17.97 17.97
Add : Share of profit prior to acquisition of control 0.08 —
18.05
17.97
Less : Cancellation of shares on account of amalgamation 22.02 (3.97) — 17.97
(b) Investment allowanc e (utilised) reserve
As per last Balance Sheet 1.78
Add : Transfer on amalgamation 1.26
3.04
Less : Withdrawn during the year 3.04 — 1.78
(c) ) Debenture redemption reserve
As per last Balance Sheet 19.80
Less : Withdrawn during the year 9.90

(d) General reserve 9.90 19.80

As per last Balance Sheet 345.64
Add : Transfer on amalgamaiton 28.99
Add : Transfer from Profit and Loss Account 121.85
(e) Surplus 496.48 345.64
Balance in Profit and Loss Account 29.61 36.68
538.45 421.87

III SECURED LOANS

(a) ) 15.5% Secured Non-Convertible Debentures
Secured on pari passu basis by hypothecation of movable properties
except book debts and by deposit of title deeds in respect
of immovable properties 19.80 39.60
(b) From banks
(i) Secured by a first charge on the fixed assets of a division of the company 12.30 16.30
(ii) Secured by hypothecation of present and future inventories and receivables
and also by a second charge on the fixed assets of a division — 2.36
(iii) Secured by hypothecation of inventory and receivables and equitable

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CONSOLIDATED ACCOUNTS OF TVS MOTOR COMPANY LIMITED AND ITS
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charge on movable machineries and land and buildings of a division 2.24 1.86
(iv) Secured by hypothecation of present and future inventories and receivables 5.40 1.43
39.74 61.55

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Consolidated Schedules - ( continued)

Rupees in crores
As at As at
31-03-2004 31-03-2003
IV UNSECURED LOANS
(a) ) From banks 0.02 21.03
(b) From others 73.31 57.68
(c) ) Other deposits 9.06 8.48
82.39 87.19
V FIXED ASSETS
Plant & Furniture & Other Total Total
machinery, fixtures, fixed As at As at
Description Land Buildings tools, dies equipments Vehicles Assets 31-03-2004 31-03-2003
and jigs @

Cost of assets
@@
As at 01-04-2003 47.58 106.84 800.14 35.95 9.34 — 999.85 823.92
Additions 2.23 17.96 156.20 6.85 2.18 4.12 189.54 204.01
Sales/deletion 2.21 4.42 24.45 0.95 0.37 — 32.40 29.17

Total 47.60 120.38 931.89 41.85 11.15 4.12 1,156.99 998.76

Depreciation
Upto 31-03-2003 — 16.64 325.76 21.50 2.58 — 366.48 296.77
For the year — 3.88 68.68 5.34 1.78 2.06 81.74 94.46
Withdrawn on
assets sold/deleted — 0.42 7.33 0.57 0.14 — 8.46 24.75

Total — 20.10 387.11 26.27 4.22 2.06 439.76 366.48

Written down value
As at 31-03-2004 47.60 100.28 544.78 15.58 6.93 2.06 717.23
As at 31-03-2003 46.49 90.20 474.38 14.45 6.76 — 632.28
@ vide note 1(s)
@@ includes Rs 1.09 crores being cost of land held by subsidiary company
Rupees in crores
As at As at
31-03-2004 31-03-2003
VI CAPITAL WORK-IN-PROGRESS
(a) ) Building under construction 2.26 1.59
(b) Machinery in transit/installation 7.58 29.07
9.84 30.66
VII INVESTMENTS (AT COST)
( a) Tra de - quoted 4.40
Less: Pro-rata share in the loss of associate company 3.78
0.62 4.40
(b) Non-tra de - quoted 68.2 27.60
9
Total quoted
(Market valueinvestments
of quoted investments- Rs. 88.18 crores- (A) 68.9
1 32.00
Last year Rs. 44.33 crores)
( c) Trade - unquoted 30.31 30.31
(d) Non-tra de - unquoted (Rs. 37,700/- last year Rs. 37,800/-) — —
Total unquoted investments (B) 30.3 30.3
1 1
Total Investments (A+B) 99.2 62.3
2 1
Short term investments 68.26 27.58 62
CONSOLIDATED ACCOUNTS OF TVS MOTOR COMPANY LIMITED AND ITS
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Consolidated Schedules - ( continued)

Rupees in crores
As at As at
31-03- 31-03-
2004 2003
VIII INVENTORIES
* Raw materials and components 44.20 42.76
* Work-in-proc ess 16.63 17.70
* Finished goods 101.75 106.95
* Stock of dies, moulds and tools 42.29 37.40
* Stores 14.21 12.09
Goods-in-transit 1.40 3.78
220.48 220.68
* ( as certified by chairman & managing dire ctor)

IX SUNDRY DEBTORS - UNSECURED CONSIDERED GOOD

( a) Debts outstanding for a period exceeding six months 3.38 8.26
(b) Other debts 53.95 47.05

57.3 55.3
3 1
X CASH AND BANK BALANCES
( a) Cash and cheques on hand 0.16 0.11
(b) With scheduled banks
i) in current accounts 3.54 39.01
ii) in cash credit accounts 8.52 19.60
iii) in term deposit accounts 6.05 24.34

18.2 83.0
7 6
XI OTHER CURRENT ASSETS
Interest accrued on non-tra de quoted investments 0.19 —
0.19 —

XII LOANS AND ADVANCES - UNSECURED CONSIDERED GOOD

(a) ) Advances recoverable in cash or in kind or for value
to be received 119.56 84.00
(b) Inter corporate deposits 10.31 5.00
( c) Other deposits 2.07 2.05
(d) Advance payment of income tax less provisions 12.02 1.72

143.9 92.7
6 7
XIII CURRENT LIABILITIES
Sundry creditors 427.75 421.66

427.75 421.66
XIV PROVISIONS
( a) Provision for pension fund 21.63 14.38
(b) Provision for leave salary 3.02 1.64
( c) Interim dividend payable 16.63 16.17
(d) Provision for dividend tax 2.13 2.68
43.41 34.87

XV MISCELLANEOUS EXPENDITURE
(to the extent not written off or adjusted)
( a) Expenditure pending allocation 2.19 —
(b) New product launch expenses 10.71 —
12.9 — 63
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Consolidated Schedules - ( continued) Rupees in crores

Year ended Year ended
31-03-2004 31-03-2003
XVI OTHER INCOME
( a) Miscellaneous income 26.33 13.11
(b) Dividend Income 9.12 0.04
(c) Profit on sale of fixed assets 0.12 0.23
(d) Profit on sale of investments 0.95 7.66
36.52 21.04

XVII RAW MATERIALS AND COMPONENTS CONSUMED

Opening stock:
Raw materials 42.76 37.40
Work-in-proc ess 17.70 17.40
Finished goods 106.95 67.57
167.41 122.37
Purchase of raw materials and components 1,849.68 1,814.17
Total (A) 2,017.09 1,936.54
Closing stock:
Raw materials 44.20 42.76
Work-in-proc ess 16.63 17.70
Finished goods 101.75 106.95
Total (B) 162.58 167.41
(A - B) 1,854.51 1,769.13

XVIII SALARIES AND WAGES, STORES CONSUMED AND OTHER EXPENSES

* ( a) Salaries, wages and allowanc es 104.61 87.14
* (b) Workmen and staff welfare expenses 17.54 15.88
* ( c) Contribution to provident and other funds 18.97 15.63
* (d) Stores and tools consumed 37.88 32.69
* (e) Power and fuel 32.63 29.96
* (f) Rent 5.96 6.80
(g) Rates and taxes 31.26 30.09
* (h) Repairs and maintenance:
(i) buildings 5.16 4.82
(ii) machinery 25.96 24.53
(iii) other assets 2.63 1.77
(i) Insurance 2.95 2.86
(j) Dire ctors’ sitting fees 0.03 0.03
(k) Commission to independent dire ctors 0.22 0.09
(l) Audit fees 0.26 0.17
* (m)Travel and conveyance 16.53 11.52
* (n) Packing and freight charges 72.23 66.27
* (o) Advertisement and publicity 105.57 105.94
* (p) Other marketing expenses 151.96 95.70
* (q) Other expenses 82.13 86.47
(r) Royalty — 2.88
(s) Commission to selling agents 0.72 0.39
(t) Cash discount 8.00 10.46
(u) Loss on sale / scrapping of fixed assets 0.32 3.04

723.5 635.13
2
* net of recoveries
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Consolidated Schedules – ( continued)

Rupees in crores
Year ended Year ended
31-03-2004 31-03-2003
XIX MISCELLANEOUS EXPENDITURE WRITTEN OFF

( a) Debenture issue expenses — 0.30

(b) Rights issue expenses — 0.17

— 0.47
XX INTEREST
( a) On debentures 3.79 6.86

(b) On fixed loans 1.45 4.82

( c) Others 5.27 3.07

Total (A) 10.51 14.75

Less: Interest income

( a) On non-tra de investments (gross) 0.36 —

(b) On advances and deposits (gross) 8.27 7.55

Total (B) 8.63 7.55

(A-B) 7.20

1.88

Rupees in crores
As at/ As at/
Year ended Year ended
31-03-2004 31-03-2003
XXI NOTES ON ACCOUNTS
1. Accounting Stand ards
(a) ) AS – 1 Disclosure of accounting policies
The accounts are maintained on accrual basis as a going concern.
(b) AS – 2 Valuation of inventories
Inventories are valued in accordance with the method of valuation prescribed by The
Institute of Chartered Accountants of India at weighted average rates.
(c) AS – 3 Cash flow statements
The cash flow statement is prepared under "Indire ct" method and the same is annexed.
(d) AS – 5 Net profit or loss for the period, prior period items and changes in accounting policies
Details of prior period debit to Profit and Loss account
(i) Raw materials and components consumed 0.19 0.40
(ii) Technical consultancy 0.78 —
(iii) Other expenses — 0.08
(e) AS – 6 Depreciation accounting
Depreciation has been provided under the straight line method at the rates
prescribed under schedule XIV of the Companies Act, 1956 with the applica ble shift
allowanc e.
In respect of assets added / assetssold during the year pro-rata depreciation has
been provided at the rates prescribed under schedule XIV.
Depreciation in respect of Computers and Vehicles has been provided at 30% and 18%
respectively which is higher than the rate prescribed under schedule XIV.
Depreciation in respect of tools and dies has been provided based on the quantity
of components manufactured. In last year in respect of tools and dies meant for the
manufacture of two-wheelers which were discontinued, depre ciation has been
provided at 99% of the original cost and the additional depreciation provided on
these tools and dies amounted to Rs.17.90 crores.
Depreciation in respect of assets acquired during the year whose actual cost does
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CONSOLIDATED ACCOUNTS OF TVS MOTOR COMPANY LIMITED AND ITS
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not exceed Rs. 5,000/- has been provided at 100%.

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Consolidated Schedules – ( continued)

XXI NOTES ON ACCOUNTS – ( continued)
Rupees in crores
As at/ As at/
Year ended Year ended 31-
03-2004 31-03-2003
(f) AS – 9 Revenue recognition
The income of the company is derived from sale of automotive vehicles and parts
thereof, rubber and plastic components net of trade discount and include realised
exchange fluctuations on exports.
Interest income isrecognised on a time proportion basistaking into account the
amount outstanding and the rate applica ble.
Dividend from investments in shares is recognised when the company in which they
are held declare the dividend and when the right to receive the same is established.
The revenue and expenditure are accounted on a going concern basis.
(g) AS – 10 Accounting for fixed assets
All the fixed assets are valued at cost including expenditure incurred in bringing
them to usable condition less depreciation.
Land includes land ac quired under 20 ye ars le ase from Karnataka Industrial
Area Development Board (KIADB) at a cost of Rs. 3.86 crores.
Buildings include building constructed on leasehold land 1.33 1.33
Cost of vehicles include vehicles acquired under finance lease 0.74 0.67
(h) AS – 11 Accounting for effe cts in foreign exchange rates
Purchase of imported raw materials, components, spare parts and capital goods are
accounted based on retirement memos from banks. In respect of lia bilities on
import of raw materials, components, spare parts and capital goods which are in
transit and where invoices / bills are not received, the lia bility is accounted based
on the market exchange rates prevailing on the date of the balance sheet.
Sales include realised exchange fluctuation on exports.
Net exchange differenc e credited to
(a) ) Profit and Loss Account 1.21 0.63
(b) Carrying amount of fixed assets 0.25 —
(i) AS – 13 Accounting for investments
Investments are valued at cost.
Cost of investments which are not transferable till 8th August 2005 13.50 13.50
(j) AS – 14 Accounting for Amalgamation
With effect from 2nd April 2003 the business of Lakhsmi Auto Components Limited,
Chennai was transferre d to and vested in the company. Accounting for such
amalgamation is done by "pooling of interests" method as prescribed in the
Accounting Stand ard as the separate businesses of the amalgamating companies
are continued by the transferee company. Under this method, the assets, lia bilities
and reserves of the transferor company are recorded at their existing carrying
amounts as on 2nd April 2003.
The gain arising out of the net result of the amalgamation amounting to Rs. 6.43
crores is credited to capital reserves.
(k) AS – 15 Accounting for retirement benefits
(i) Contributions to provident fund are made to a recognised trust in respect of excluded employees.
Inrespect of other employeesthe contribution is made to the Government.
(ii) Provision for leave salary to employees is made on the basis of actuarial valuation.
(iii) Provision for pension for senior managers is made on actuarial valuation basis for current and past
services.
(iv) Contributions to gratuity and superannuation fund are made to Life Insurance Corporation of
India in accordance with the scheme framed by the corporation.
(l) AS – 16 Borrowing cost
The borrowing costs have been treated in accordance with Accounting Stand ard on
Borrowing Cost (AS – 16) issued by The Institute of Chartered Accountants of India.
During the year, there were no borrowings attributa ble to qualifying assets and
hence no borrowing costs were capitalised.

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Consolidated Schedules – ( continued)

XXI NOTES ON ACCOUNTS – ( continued)
Rupees in crores
As at/
Year ended
(m) AS – 17 Segment reporting 31-03-2004

Business segment
Particulars Automotive Automotive
components Total
vehicles
Revenue
External sales - domestic 2,750.73 22.96 2,773.69
- exports 69.48 3.18 72.66
Inter segment sales 39.07 39.07
Total sales 2,820.21 65.21 2,885.42
Less: Inter segment 39.07 39.07
sales Net revenue 2,820.21 26.14 2,846.35
Segmentwise results before interest and tax 215.74 6.19 221.93
Less: Interest 1.88
Profit before tax 220.05
Taxes 78.07
Pro-rata share of loss of 3.78
associate Profit after tax 138.20
Segment assets 1,268.23 38.52 1,306.75
Segment lia bilities 583.13 21.46 604.59
Total cost incurred during the year to
acquire segment assets 386.61 38.26 424.87
Segment depreciation 79.89 1.85 81.74
Non-cash expenses other than depreciation — — —

Notes:
The company and its subsidiary cater mainly to the needs of the domestic market.
The export turnover is not significant in the context of the total turnover. As such there are no
reportable geographical segments.
Rupees in crores
As at/ As at/
Year ended Year ended
31-03-2004 31-03-2003
(n) AS – 18 Related party disclosure
Disclosure is made as per the requirements of the standard and the same is
annexed.

(o) AS – 19 Leases
(i) Asset acquired under finance lease - vehicles
– original cost 0.74 0.67
(ii) The net carrying amount as on 31st March 0.37 0.43
(iii) Minimum lease payments
– not later than one year - not discounted 0.23 0.19
– later than one year but not later than five years- not discounted 0.41 0.56
– later than five years- not discounted — —
(iv) Present value of minimum lease payments
– not later than one year- discounted 0.14 0.12
– later than one year but not later than five years- discounted 0.13 0.20
– later than five years- discounted — —
(v) Contingent rents recognised as income in the statement of Profit and Loss Account — —
(vi) The total of future minimum sub-le ase payment expected to be received under
non-canc ella ble sub-le ases as on 31st March — —
(vii) General description of the leasing arrangements
– Nature of facility : Finance lease
– Restriction imposed by lease arrangement Nil
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CONSOLIDATED ACCOUNTS OF TVS MOTOR COMPANY LIMITED AND ITS
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Consolidated Schedules – ( continued)

XXI NOTES ON ACCOUNTS – ( continued)

Rupees in crores
As at/ As at/
Year ended Year ended 31-
03-2004 31-03-2003

(p) AS – 20 Earnings per share

During the year the company sub-divided the face value of
the shares from Rs. 10/- each to Re. 1/- each. Pursuant to
the requirements of the Accounting Stand ard the earnings
per share for the last year is also worked out on the basis
of the sub-division

(q) AS – 22 Accounting for taxes on income

(i) Deferred tax lia bility consists of:
– tax on depreciation 94.36 82.84
– tax on R & D capital expenditure 22.11 15.31
– tax on amortisation of dies and moulds 13.32 9.38
– tax on debenture issue expenses 4.73 0.04
– tax on expenses admissible on payment basis under
Income-tax Act, 1961 — 0.62
(A) 134.52 108.19
(ii) Deferred tax asset consists of:
– tax on provision in respect of expenditure which will be allowed under
the Income-tax Act, 1961 only on payment basis 10.59 6.24
(B) 10.59 6.24
Deferred tax lia bility (net of deferred tax asset) (A)-(B) refer Balance Sheet 123.93 101.95
(r) AS-23 Accounting for investments in associate
Name of the associate TVS Finance and Services Limited, Chennai

Method adopted in accounting for investment Equity method

(s) AS - 26 - Accounting for intangible assets

During the year the company acquired the following assets falling under the
definition of intangible assets as per the Accounting Stand ard and the
following disclosure is made in respect of those assets :

(i) Softw are

– Useful life of the asset 2 years —
– Amortisation rates used 50% each
year as —
depreciation
– Gross carrying amounts at the beginning and the end of the period together
with additions and deletions during the year
– Opening balance — —
– Additions during the year. 4.12 —
Total 4.12 —
Amortised during the year as depreciation 2.06 —
Closing balance 2.06 —

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 CONSOLIDATED ACCOUNTS OF TVS MOTOR COMPANY LIMITED AND ITS
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Consolidated Schedules – ( continued)

XXI NOTES ON ACCOUNTS – ( continued)

Rupees in crores
As at/ As at/
Year ended Year ended
31-03-2004 31-03-2003
(ii) Expenditure pending allocation on new products

– Usefull life of the asset 10 years —

– Amortisation rates used Not amortised —

as asset not put to
– Gross carrying amounts at the begining and at the end of the period use
together
with additions and deletions during the year
– Opening balance — —
– Additions during the year 2.19 —
Total 2.19 —
Amortised / capitalised during the year — —
Closing balance 2.19 —
Commitments for the acquisition of the asset 1.05 —
2. Previous year's figures are not comparable with those of the current year as the company has
acquired M/s. Lakshmi Auto Components Limited, Chennai with effe ct from 2nd April 2003.The
carrying amounts of the assets and lia bilities of M/s. Lakshmi Auto Components Limited, Chennai
were accounted by the company pursuant to the order of the Hon'ble High Court of Judicature at
Madras.
3. Debentures
The 1,00,00,000 15.5% secured redeemable non-convertible debentures issued
during the year 1997-98 for Rs. 100 crores are redeemable at parin equalinstalments
at the end of 4th, 5th, 6th and 7th year.
Amount of debentures redeemed 19.80 19.80
4. Amount of loan payable within one year:
(a) ) Secured - from banks 4.00 4.00
(b) Unsecured - from banks 0.02 21.03
( c) Unsecured - from others — 8.47
5. Land
Title deed in respect of lands acquired near Ahmed abad at a cost of
Rs. 0.01 crore is yet to be received from the registration authorities.
6. Sundry debtors (other debts) include amount due from company under
the same management- M/s. Sund aram-Clayton Limited, Chennai 0.13 0.65
7. Bank balance includes amount in respect of:
( a) Unclaimed dividends 0.81 0.74
(b) Unclaimed share application money (Rs.17,200/- last year Rs. 19,000/-) — —
8. Loans and advances include:
( a) Due from an officer of the company 0.05 0.14
(b) Maximum amount due from an offic er of the company at any time during the year 0.06 0.15
9. Deposits include:
( a) Deposit with post offic e (Rs. 21,500/- last year Rs. 47,500/-) — —
(b) Deposit with central excise 0.14 0.26
( c) Deposit with sales tax 0.78 0.72
10. Sundry creditors include :
( a) Investor Education and Protection Fund
Unclaimed dividend 0.81 0.74
Unclaimed share application money (Rs .17,200/- last year Rs. 19,000/-) — —
(b) Amount due to Small Scale Industrial units 19.71 17.70
( c) Amount due to other Industrial units 272.96 251.42

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Consolidated Schedules – ( continued)

XXI NOTES ON ACCOUNTS – ( continued)
Rupees in crores
As at/ As at/
Year ended Year ended 31-
03-2004 31-03-2003
11. Miscellaneous expenditure not written off :
(a) Expenditure pending allo cation represents expenditure on designs and development of proto
types on new product.
(b) In respect of new product launch expenses Accounting Stand ard 26 is not applica ble as it
does not cre ate any intangible asset or a resourc e. This expenditure is proposed to be written
off in 36 months.

12. Contingent lia bility not provided for :

( a) On counter guarantee given to banks 3.46 2.51
(b) On letters of credit 29,12 23.87
( c) On guarantee to Housing Development Finance Corporation
Limited, Mumb ai on loans granted to employees of the company 1.25 1.25
(d) On bills discounted 20.19 4.61
(e) Capital commitments not provided for 22.05 23.47
(f) On oblig ation arising out of agreements facilitating credit to an
associate company 75.00 75.00

13. Lia bility contested and not provided for:

( a) Excise 1.58 0.27
(b) Sales tax 3.55 3.16
( c) Electricity tax 0.15 —
(d) Income-tax 5.03 5.52
(e) Employee settlement claims 0.05 0.05

14. Tax deducted at source :

( a) On interest income 1.15 1.18
(b) On sub-contract receipts 2.65 2.91
( c) On professional services rendered 0.02 —

15. Contribution to provident and other funds include:

( a) Contribution towards gratuity as per scheme framed by
Life Insurance Corporation of India 3.42 3.34
(b) Contribution towards pension fund 7.94 6.02

16. Repairs Include:

( a) Wages 3.48 3.40
(b) Stores consumed 17.83 13.51

17. Audit fees comprise :

( a) As auditors 0.18 0.11
(b) Taxation matters 0.03 0.03
( c) Certification matters 0.04 0.02
(d) Cost audit fees 0.01 0.01
Total 0.17

0.26
18. General
( a) Other expenses include travel and stay expenses of auditors 0.07 0.07
(b) Loss on sale of investments netted against profit on sale of investments 5.64 0.66

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 CONSOLIDATED ACCOUNTS OF TVS MOTOR COMPANY LIMITED AND ITS
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Consolidated Schedules – ( continued)

XXI NOTES ON ACCOUNTS – ( continued)

Rupees in crores
As at/ As at/
Year ended Year ended
31-03-2004 31-03-2003

19. Previous year's figures have been regrouped wherever necessary to conform to
the current year's classification.
20. Related party disclosure List
of related parties
Reporting entity TVS Motor Company Limited and its subsidiary
Sund aram Auto Components Limited, Chennai

Holding company Sund aram-Clayton Limited, Chennai

Fellow (a) ) Anusha Investments Limited, Chennai

(b) TVS Electronics Limited,
subsidiaries Chennai ( c) Harita Stocks Limited,
Chennai
(d) TVS Investments Limited, Chennai

TVS Finance and Services Limited, Chennai

Associate company ( a subsidiary of TVS Investments Limited, Chennai)

Key management personnel Mr. Venu Srinivasan

Relative of key management

personnel Mr. Gopal Srinivasan

21. Particulars of transactions with related parties ( a)

Purchase of goods

- holding company 35.06 29.24

- fellow subsidiary 0.47 —
(b) Sale of goods
- holding company 12.31 9.68
( c) Purchase of fixed assets
- holding company — 0.07
- fellow subsidiary (TVS Electronics Limited, Chennai) 0.33 —
(d) Sales of fixed assets
- holding company 0.18 —
(e) Rendering of services (including interest and sub-contract charges received)
- fellow subsidiary (Anusha Investments Limited, Chennai) 0.18 0.20
- associate company 0.11 0.86
(f) Receiving of services (including sub-contract charges paid)
- holding company 42.48 38.83
- fellow subsidiaries 2.61 1.78
- associate company 11.65 1.19
(g) Trade advances made during the year
- fellow subsidiary (Anusha Investments Limited, Chennai) 5.00 5.00
- associate company 13.50 —
(h) Trade advances received back during the year
- fellow subsidiary (Anusha Investments Limited, Chennai) 10.00 —
- associate company 13.50 —

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 CONSOLIDATED ACCOUNTS OF TVS MOTOR COMPANY LIMITED AND ITS
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Consolidated Schedules – ( continued)

XXI NOTES ON ACCOUNTS – ( continued)

Rupees in crores
As at/ As at/
Year ended Year ended 31-
03-2004 31-03-2003
21.Particulars of transactions with Related Parties (
continued)

(i) Amount outstanding as at Balance Sheet date:

(i) Sundry debtors
- holding company — 0.63
- fellow subsidiaries — 0.20
(ii) Loans and advances receivable
- fellow subsidiary (TVS Investments Limited, Chennai) 0.06 5.00
(iii) Sundry creditors
- holding company 12.21 12.58
- fellow subsidiary 0.01 0.01
- associate company 0.88 0.32
(j) Investments made during the year
- associate company — 46.16
(k) Investments sold during the year
- fellow subsidiary — 0.05
(l) Oblig ation arising out of agreements facilitating credit to associate
company TVS Finance and Services Limited, Chennai. 75.00 75.00
(m) Remuneration to key management personnel and his relative 1.07 2.46

VENU SRINIVASAN H. LAKSHMANAN S.G. MURALI As per our report annexed

Chairm an & Managing Dire ctor Director Vice President - Finance For Sund aram & Srinivasan
Chartered Accountants

Chennai T.S. RAJAGOPALAN M. BALASUBRAMANIYAM

June 28, 2004 Secretary Partner

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CONSOLIDATED ACCOUNTS OF TVS MOTOR COMPANY LIMITED AND ITS
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Consolidated Cash Flow

Rupees in crores
Statement
Year ended Year ended
31-03-2004 31-03-2003
A. Cash flow from operating activities :
Net Profit before tax and extraordinary items 220.05 232.98
Add :
Depreciation 81.74 94.46
Depreciation on sale / scrapping of assets (1.69) (24.75)
Miscellaneous expenditure written off — 0.47
Income tax relating to earlier years (0.74) 1.43
Dividend income (9.12) (0.04)
Interest income (8.63) (7.55)
Interest expenditure 10.51 14.75
72.07 78.77
Operating profit before working capital changes 292.12 311.75
Adjustments for :
Trade receivables (2.02) 30.64
Inventories 0.20 (66.70)
Other current assets (0.19) —
Loans and advances (40.89) 12.39
Trade payables 6.09 120.74
Provisions 8.63 6.05
(28.18) 103.12
Cash generated from operations 263.94 414.87
Dire ct taxes paid (66.41) (68.46)

Net cash from operating activities 197.53 346.41

B. Cash flow from investing activities :
Purchase of fixed assets (189.54) (204.01)

Transfer out on hiving off of rubber and plastics

divisions of subsidiary company

Cost of assets 28.00

Accumulated depreciation 6.77
21.23 —

Sale of fixed assets 3.31 29.17

Capital work-in-progress 20.82 (12.27)

Purchase of investments (1,262.69) (910.16)

Sale / diminution in value of investments 1,222.00 838.28

Miscellaneous expenditure not written off (12.90) —

Interest received 8.63 7.55

Dividends received 9.12 0.0
4
(180.02) (251.40)
Net cash used in investing activities (180.02) (251.40)

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CONSOLIDATED ACCOUNTS OF TVS MOTOR COMPANY LIMITED AND ITS
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Consolidated Cash Flow Statement – ( continued)

Rupees in crores
Year ended Year ended
31-03-2004 31-03-2003

C. Cash flow from financing activities :

Transfer on amalgamation :
General reserves 28.99 —

Capital reserves 6.51 —

Profit and Loss Account 0.04 —

Investment allowanc e reserve 1.26 —

Deferred tax 0.02 —

Shares issued to shareholders of Lakshmi Auto

Components Limited 0.65 —
Dues to minority shareholders cancelled on
account of amalgamation (24.88) —
Capital reserve cancelled on amalgamation (22.02) —

Repayment of long term borrowings (25.78) (60.47)

Unsecured loan availed — 6.33

Repayment of unse cured loans (20.43) (6.81)

Sales tax deferral loan availed 15.63 12.99

Sales tax deferral loan repaid — (1.57)

Interest paid (10.51) (14.75)

Dividend and dividend tax paid (35.75) (11.55)

(86.27 (75.83)
)
Net cash used in financing activities (86.27) (75.83)

D. Net increase in cash and cash equivalents : (68.76 19.18

)
Cash and cash equivalents at the beginning of the year 81.63 62.45
Cash and cash equivalents at the end of the year 12.87 81.63

Notes:
1. The above statement has been prepared in indire ct method except in case ofinterest, dividend and purchase and sale ofinves tments which have been
considered on the basis of actual movement of cash.
2. Cash and cash equivalents represent cash and bank balances.

VENU SRINIVASAN H. LAKSHMANAN S.G. MURALI As per our report annexed

Chairm an & Managing Dire ctor Director Vice President - Finance For Sund aram &
Srinivasan
Chartered Accountants

Chennai T.S. RAJAGOPALAN M. BALASUBRAMANIYAM

June 28, 2004 Secretary Partner

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CONSOLIDATED ACCOUNTS OF TVS MOTOR COMPANY LIMITED AND ITS
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Auditors' Report on Consolidated Financial

Statement

77
CONSOLIDATED ACCOUNTS
We have audited OF TVS
the attached MOTOR
consolid atedCOMPANY LIMITED
Balance Sheet AND
of TVS ITS Company Limited and itssubsidiary viz.,
Motor
SUBSIDIARY
Sundaram Auto Components Limited as at 31 st March 2004, and also the related Profit and Loss Account and the Cash
Flow statement for the year then ended. These financial statements are the responsibility of the company’s management.
Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in India. These standards require that
we plan and perform the audit to obtain reasonable assuranc e about whether the fin a n cial statements are free of
m aterial misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting prin ciples use d a nd significa
nt estim ates m a d e by the management, as well as evaluating the overall financialstatement presentation. We believe
that our audit provides a reasonable basis for our opinion.

We report that the consolid ated financial statements have been prepared by the company in accordance with the
requirements of Accounting Stand ard 21 “Consolid ated Financial Statement”

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CONSOLIDATED ACCOUNTS
read with Accounting Stand OF
ard TVS
23 “ MOTOR COMPANY
Accounting LIMITEDAsso
for Investmentsin ANDciate
ITS in Consolid ated Financial Statements”
SUBSIDIARY
issued by The Institute of Chartered Accountants of India, on the basis of the individual financial statements of TVS
Motor Company Limited, Chennai, its subsidiary viz., Sund aram Auto Components Limited, Chennai and its asso
ciate TVS Financ e and Servic es Limite d, Chennai (formerly known as Harita Finance Limited) included in the
aforesaid consolid ation.

In our opinion, and based on our audit, the consolid ated financial statements referred to above give a true and fair
st
view of the financial position ofTVS Motor Company Limited and itssubsidiary as at 31 March 2004 and of the results
of their operations and their cash flowsforthe yearthen ended in conformity with generally accepted accounting
principles in India.

For Sund aram & Srinivasan

Chartered Accountants

M. BALASUBRAMANIYAM
Chennai Partner
June 28, 2004 Membership No. F7945

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