TVS MOTOR COMPANY LIMITED Twelfth Annual Report 2003-2004 TVS MOTOR COMPANY LIMITED Board of Directors Bankers VENU SRINIVASAN STATE BANK OF INDIA Chairman & Managing Director Corporate Accounts Group Branch, Greams Road, GOPAL SRINIVASAN Chennai 600 006. T. K. BALAJI STATE BANK OF MYSORE Industrial Finance Branch, H. LAKSHMANAN Midford Garden Road, Bangalore 560 001. T. KANNAN STATE BANK OF PATIALA N. GANGA RAM Whites Road, Chennai 600 014. C. R. DUA STATE BANK OF BIKANER & JAIPUR K. S. BAJPAI Gandhinagar, Bangalore 560 009. C. V. R. PANIKAR INDIAN OVERSEAS BANK C & I Credit Branch, Audit Committee Dr. Radhakrishnan Salai, Chennai 600 004. N. GANGA RAM Chairman Registered office Jayalakshmi Estates, T. K. BALAJI 24, Haddows Road, Chennai 600 006. T. KANNAN Factories 1) Post Box No. 4, Investors’ Grievance Committee Harita, Hosur 635 109. N. GANGA RAM Chairman 2) Post Box No. 1, Byathahalli village, VENU SRINIVASAN Kadakola post, Mysore 571 311. T. KANNAN Subsidiary President Sundaram Auto Components Limited Chennai. C. P. RAMAN Vice President - Finance S.G. MURALI Contents Page no. Financial Highlights 2 Notice to the Shareholders 3 Secretary Directors’ Report to the Shareholders 7 T. S. RAJAGOPALAN Management Discussion and Analysis Report 12 Report on Corporate Governance 16 Auditors Auditors’ Report to the Shareholders 22 SUNDARAM & SRINIVASAN Balance Sheet 24 Chartered Accountants, Profit and Loss Account 25 23, Sir C.P. Ramaswamy Road, Schedules 26 Alwarpet, Chennai 600 018. Notes on Accounts 30 Statement under section 212 42 Listing of shares with Cash Flow Statement 43 General Business Profile 44 Madras Stock Exchange Ltd., Chennai. Sundaram Auto Components Limited 45 The Stock Exchange, Mumbai. Consolidated Accounts 56 National Stock Exchange of India Ltd., Mumbai. 1 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 Notice to the Shareholders NOTICE is hereby given that the twelfth annual general meeting the company on such remuneration as may be fixed in this of the company will be held at ‘The Music Academy’, New No.168 behalf by the board of directors of the company. (Old No.306), TTK Road, Chennai 600 014 on Friday, the 10th SPECIAL BUSINESS September 2004, at 10.15 A.M to transact the following business: 7. To consider and if thought fit, to pass with or without ORDINARY BUSINESS modification, the following resolution as an ordinary 1. To consider and if thought fit, to pass with or without resolution: modification, the following resolution as an ordinary RESOLVED THAT in supersession of the ordinary resolution resolution: passed by the shareholders in the extraordinary general RESOLVED THAT the audited balance sheet as at 31st March meeting of the company held on 30th June 1999, the consent 2004 and the profit and loss account of the company for of the company be and is hereby accorded to the board the year ended on that date, together with the directors’ of directors under Section 293(1) (d) of the Companies Act, report and the auditors' report thereon as presented to the 1956 to borrow any sum or sums of moneys from time to meeting, be and the same are hereby, approved and time notwithstanding that the money or moneys to be adopted. borrowed, together with the moneys already borrowed by the company (apart from temporary loans obtained from 2. To consider and if thought fit, to pass with or without the company’s bankers in the ordinary course of business) modification, the following resolution as an ordinary may exceed the aggregate of the paid up capital and its resolution: free reserves, that is to say, reserves not set apart for any RESOLVED THAT the interim dividend of Rs.6/- per share specific purpose, provided however, the total amount so declared by the board of directors of the company on 17th borrowed and outstanding at any one time shall not exceed October 2003 on 2,31,00,070 equity shares of Rs.10/- each Rs. 750 crores (Rupees seven hundred and fifty crores only) fully paid, and the second interim dividend of Re.0.70 per or the aggregate of the paid-up capital and free reserves share declared on 21st April 2004 on 23,75,43,557 equity of the company, whichever is higher. shares of Re.1/- each fully paid, absorbing a total sum of RESOLVED FURTHER THAT the board of directors be and are Rs.30.49 crores in the aggregate and paid to the hereby authorised to do all such acts, deeds, matters and shareholders on 5th November 2003 and 7th May 2004, things and to execute all such documents or writings as they respectively, be and are hereby approved as final dividend may consider necessary, usual, requisite or proper for the for the year ended 31st March 2004. purpose of giving effect to this resolution. 3. To consider and if thought fit, to pass with or without 8. To consider and if thought fit, to pass with or without modification, the following resolution as an ordinary modification, the following resolution as a special resolution: resolution: RESOLVED THAT approval be and is hereby accorded to the RESOLVED THAT Mr. N. Ganga Ram, director who retires by board of directors in terms of Section 163 and other rotation and being eligible for re-appointment be and is applicable provisions of the Companies Act, 1956 (the Act) hereby re-appointed as a director of the company. to keep the register of members, the index of members and 4. To consider and if thought fit, to pass with or without register and index of debentureholders, if any, and copies modification, the following resolution as an ordinary of all annual returns prepared under Section 159 of the Act resolution: together with the certificates and documents required to RESOLVED THAT Mr. C. R. Dua, director who retires by rotation be annexed thereto under Sections 159 and 161 of the Act and being eligible for re-appointment be and is hereby at the office of Sundaram-Clayton Limited (SCL), Share re-appointed as a director of the company. Transfer Agents of the company at No.31, Railway Colony, III Street, Mehta Nagar, Chennai 600 029, or such other place 5. To consider and if thought fit, to pass with or without within the city limits of Chennai where SCL decides to carry modification, the following resolution as an ordinary on the share registry work instead of keeping at the registered resolution: office of the company from such date as may be decided RESOLVED THAT Mr. T. Kannan, director who retires by rotation by the board of directors or a committee of the directors by and being eligible for re-appointment be and is hereby giving not less than 30 days notice to the shareholders / re-appointed as a director of the company. debentureholders. 6. To consider and if thought fit, to pass with or without By order of the board modification, the following resolution as an ordinary Chennai T. S. RAJAGOPALAN resolution: June 28, 2004 Secretary RESOLVED THAT the retiring auditors Messrs. Sundaram & Srinivasan, Chartered Accountants, Chennai be and are Registered Office: hereby re-appointed as auditors of the company to hold “Jayalakshmi Estates”, office from the conclusion of this annual general meeting 24 (Old No.8), Haddows Road, till the conclusion of the next annual general meeting of Chennai 600 006. 3 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 director in September 1992. He was the power of attorney or other authority, if any, under which co-opted as a director of the company on 28th March 2001. it is signed or a notarially certified copy of that power or Mr. Ganga Ram has done overseas consultancy assignments authority shall be deposited at the registered office of the for the World Bank, Washington and the Asian Development company not later than 48 hours before the time fixed for Bank, Manila. He has wide experience in appraisal and holding the meeting. post-sanction supervision of industrial projects. He has served 2.